Dollar Tree Case Study Essay
There are several initiatives Dollar Tree can continue to utilize as part of its strategy to distinguish itself in this discount retail industry. First, completely closing the current Family Dollar acquisition will set Dollar Tree out front as the leader in the industry, but several next steps will need to be taken in order for consumers and investors to view this as a successful venture. First, whether the organization intends to use the Family Dollar name or convert them to Dollar Tree stores will be a point of focus. Also, determining which of the over three hundred Dollar Tree stores the organization will need to close in order to meet United States regulatory approval of the acquisition will also be important. Assuring how both of these
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are handled while mitigating any negative backlash from consumers will be necessary for the organization to gain market share and not lose it through negative publicity and poor decision making. The organization must also look closer at ways to reinvent itself in the industry. One way is by offering more perishable grocery options, which gives the organization’s stores a convenience or grocery store appeal as well. This is important as Walmart continues to reinvent itself by moving into this market industry by way of its much smaller neighborhood market stores. Last, Dollar Tree should continue to leverage its buying power to keep costs down, offering products at low or even lower prices in order to continue to meet the value appeal that many consumers look to these stores for.
With regards to changes in Dollar Tree’s competitive strategy, there are two outward changes I would recommend.
First, because of its now increased bargaining power with the Family Dollar acquisition, a strong evaluation of branching off another business to focus on higher salary markets such as New York or San Francisco. According to one report there is not a single dollar type retail store in San Francisco (O'Connor, 2014). Utilizing the strategy in strategically placing the stores in shopping mall strips in high traffic areas while evolving the strategy to focus on these markets with newer name that recognizes value but one that includes more traditional higher end brand name products would be a way to capture new market share through a combined strategy. In addition, having sections of each market that focuses on healthy eating and green products would be a way that captures the eye of more neighborhood consumer who must travel by these stores to travel to a Whole Foods or a big box retailer in order to purchase even some of the more basic products in these areas such as organic milk and yogurt or dye-free cleaning products. While this particular area may be somewhat outside of their traditional focus, it would allow for attraction of this niche area of consumers, some of which may be upper or middle class with more disposable income, to be attracted to these close by stores and make additional purchases while shopping
there.
are handled while mitigating any negative backlash from consumers will be necessary for the organization to gain market share and not lose it through negative publicity and poor decision making. The organization must also look closer at ways to reinvent itself in the industry. One way is by offering more perishable grocery options, which gives the organization’s stores a convenience or grocery store appeal as well. This is important as Walmart continues to reinvent itself by moving into this market industry by way of its much smaller neighborhood market stores. Last, Dollar Tree should continue to leverage its buying power to keep costs down, offering products at low or even lower prices in order to continue to meet the value appeal that many consumers look to these stores for.
With regards to changes in Dollar Tree’s competitive strategy, there are two outward changes I would recommend.
First, because of its now increased bargaining power with the Family Dollar acquisition, a strong evaluation of branching off another business to focus on higher salary markets such as New York or San Francisco. According to one report there is not a single dollar type retail store in San Francisco (O'Connor, 2014). Utilizing the strategy in strategically placing the stores in shopping mall strips in high traffic areas while evolving the strategy to focus on these markets with newer name that recognizes value but one that includes more traditional higher end brand name products would be a way to capture new market share through a combined strategy. In addition, having sections of each market that focuses on healthy eating and green products would be a way that captures the eye of more neighborhood consumer who must travel by these stores to travel to a Whole Foods or a big box retailer in order to purchase even some of the more basic products in these areas such as organic milk and yogurt or dye-free cleaning products. While this particular area may be somewhat outside of their traditional focus, it would allow for attraction of this niche area of consumers, some of which may be upper or middle class with more disposable income, to be attracted to these close by stores and make additional purchases while shopping
there.