Dollar General Industry and Competitive Analysis
Dollar General Industry and Competitive Analysis
INDUSTRY
The first step to understanding a company is to examine its industry. There are four main areas to consider when analyzing an industry. These include:
Competitors
There are several different types of stores within the discount retail industry, and for comparison's sake, the industry is further broken into many segments. DG is in the market segment known as the dollar store category. As a result, competitors such as Wal-Mart are in the same industry but not the same peer group. Comparisons will be made throughout this report to Wal-Mart and other big firms because they tend draw some of the same customers.
Customers
Retail merchandise stores attract many different types of people. For example, Wal-Mart targets all income level households, whereas dollar stores such as DG serve "need-to" shoppers. More specifically, the target customers of DG are normally in towns with less than 20,000 people and have the following characteristics:
most customers are in the low-, middle-, and fixed-income brackets
81 percent of customers are female
44 percent of customers are over the age of 55
48 percent of its customers earn less than $30,000 a year
26 percent of customers have incomes lower than $20,000
most customers live within five miles of the store
DG serves a narrow market range and offers low prices. It strives to meet the needs of lower and lower-middle income consumers. The company can be classified as having a focused cost leadership strategy according to Porter's Generic Strategies Model
Merchandise
Stores within the discount retail industry offer a wide variety of products at low prices. Discount stores offer brand names but place an emphasis on brands unique to their own stores for a lesser price. Trends toward perishable items are becoming more apparent in the market as well. In 2004 DG started added in refrigerated coolers to there many stores which are filled with
INDUSTRY
The first step to understanding a company is to examine its industry. There are four main areas to consider when analyzing an industry. These include:
Competitors
There are several different types of stores within the discount retail industry, and for comparison's sake, the industry is further broken into many segments. DG is in the market segment known as the dollar store category. As a result, competitors such as Wal-Mart are in the same industry but not the same peer group. Comparisons will be made throughout this report to Wal-Mart and other big firms because they tend draw some of the same customers.
Customers
Retail merchandise stores attract many different types of people. For example, Wal-Mart targets all income level households, whereas dollar stores such as DG serve "need-to" shoppers. More specifically, the target customers of DG are normally in towns with less than 20,000 people and have the following characteristics:
most customers are in the low-, middle-, and fixed-income brackets
81 percent of customers are female
44 percent of customers are over the age of 55
48 percent of its customers earn less than $30,000 a year
26 percent of customers have incomes lower than $20,000
most customers live within five miles of the store
DG serves a narrow market range and offers low prices. It strives to meet the needs of lower and lower-middle income consumers. The company can be classified as having a focused cost leadership strategy according to Porter's Generic Strategies Model
Merchandise
Stores within the discount retail industry offer a wide variety of products at low prices. Discount stores offer brand names but place an emphasis on brands unique to their own stores for a lesser price. Trends toward perishable items are becoming more apparent in the market as well. In 2004 DG started added in refrigerated coolers to there many stores which are filled with