Discount store; dollar general company

Dollar General is a discount variety store which sells its own products and other products of trusted manufacturers in the United States. The industry in which the Discount General operates is composed of both online and retail stores (Dollar General, n.d). Most companies in the industry have expanded their services globally. Dollar General, however, operates in the United States with over 14000 stores split into 44 different states by the start of the year 2017. According to the company’s website, Dollar General Corporation has delivered its services to citizens for over the last 78years. The company offers products commonly used which include foods, snacks, health aids, Beauty aids, supplies for cleaning, housewares and seasonal items (Dollar General, n.d). The prices are attractive since they are low and convenient to the customers as the stores are easily accessible in any neighborhood. Dollar General also sells other products from trusted manufacturers on top of its private brands. Some of the manufacturers which Dollar General operates with include Coca-Cola, Clorox, Energizer, Unilever, Pepsi, Hanes, Kimberly –Clark, General Mills, Procter & Gamble and Nestle. Looking into the SWOT analysis of Dollar General, the five forces of competition, the environment in which the company operates and the assessment of capabilities and competencies of the company will make it possible to predict the future of the variety store giant.

Choose the two (2) segments of the general environment that would rank highest in their influence on the corporation you chose. Assess how these segments affect the corporation you chose and the industry in which it operates.

The mission, Values and strategic actions of a company are greatly influenced by the general environment analysis, the environment of the industry of a particular company and the competitor analysis in the industry. The nature of the general environment in which a company operates affects every member of the industry in the same or similar fashions (Singer & Hu, 2017). The dimensions of general environment can be grouped into seven segments out of which two significantly affect the operation of Dollar General. The most influential segments on the profitability of Dollar General are the Technological and demographic segments. A general environment is based on trends and operates independently since companies in the industry cannot control it.

According to the demographic segment, the major issues which are considered include age, size, geographic and income distribution and ethnic mix. These are the major concerns which are considered by the Dollar General when determining the needs for one of their stores. It is because of this reason that Dollar General has become the leading store in small localities explores even where the big fishes don’t want to invest and have made the presence felt even in the rural areas in the United States of America (Singer & Hu, 2017). Some of the common similarities shared by most rural regions of America include size, geographic location, and income distribution. Dollar General exploits this fact by filling the niche through stocking their stores based on the needs of individuals in the area and developing different types of stores for different areas (Randazzo, 2014). Dollar General in their website note that, regardless of the services or goods offered in any store the needs of the customers must be met according to their preferences hence the company is able to thrive (Dollar General, n.d). The ethnic mix is also paramount since the company offers services to people of different ethnicities in The United States of America. It is because of this reason that the company ensures that the services offered to cater for different cultures within the store radius (Randazzo, 2014). Customer requests are also taken into considerations if some of the services needed are not offered. Most of the company stores are in areas with dense population hence there are normally 2-3 stores within 10 miles radius all offering products which cover the needs of the diverse cultures (Singer & Hu, 2017).

For the technological segment, Dollar General has tried its best to cope with its competitors in the segment. The company has texting service through which the customers can weekly discount coupons. The company also connects to its customers through social media sites such as Facebook, Twitter, and Pinterest. Dollar General through its website also notes that the company has had over hundred network providers who delivered network services (Dollar General, n.d). Due to the growth of Dollar General, a uniform network design was adopted to standardize in-store services. The Dollar General Company uses interface systems selected after extensive testing and ROI analysis. Through the application of communication suite technology, the company eliminates expenses of many phone lines. Both the communication suite and Interface System Services are based on Cisco G2Series 891 router (Business Wire, 2011). The retail store network for Dollar General uses Interface Managed Cloud Services. In the past over seventy-eight years, Dollar General has come a long way. The company has made tremendous efforts to meet the requirements of customers from different communities they serve with demographic and technological advancements in today’s dynamic general environment (Singer & Hu, 2017).

2. Considering the five (5) forces of competition, choose the two (2) that you estimate are the most significant for the corporation you chose. Evaluate how well the company has addressed these two (2) forces in the recent past.

The five forces of competition are necessary to the success of a corporation in the industry if well addressed. The five forces of competition include competitive rivalry, bargaining power of customers, bargaining power of suppliers, Both threats of new entrants and substitute products and services (Michaux et al. 2015). Dollar General closely monitors competitive rivalry and threat of substitute products in the industry and takes the threats seriously.

Dollar General has its manufacturing plants throughout the United States. It is because of this reason that the company maintains a supply of its products to its stores with DG label. The products stocked in most of the company’s stores are majorly the same. The stocked products are substantially determined by the company’s mission statement which is “Serving others” (Dollar General, n.d). The mission statement is focused on four types of people which Dollar General death with day in day out. The company defines the mission as for customer good price and quality, for employees respect and opportunity, for shareholders great returns and a better life for the community (Sanclemente-Téllez, 2017). The company has served the community through Dollar General Literacy Foundation awarding sponsorships to schools which have educated over 6 million people to improve literacy and basic skills in education (Sanclemente-Téllez, 2017). The company also eliminates the competition rivalry through locations their stores are set. Most of Dollar General Stores are located in the rural areas where bigger enterprises shy away from investing (Singer & Hu, 2017). Stores in the rural areas fill the need in a community they serve. The company addresses the threat of product substitution through manufacturing of own goods which can compete with products from other companies in the industry.

3. With the same two (2) forces in mind, predict what the company might do to improve its ability to address these forces in the near future.

Dollar General needs to keep tabs with competitive rivalry and substitute of products in order to remain competitive in future. Some of the steps which can be taken by the company are upgrading of the DG label to make sure that only original products by the company are available in the market. Opening new more stares where the giant companies have fear to explore will also help Dollar General address the force of competitive rivalry. While other companies in the same industry such as Wal-Mart and Target consider treading in these areas as a waste of time, Dollars General can continue capitalizing on this fact while ”serving others.” By Dollar General ensuring that it ventures in marginalized areas, it helps the community and also realizes the common goal of employees, shareholders, and customers.

4. Assess the external threats affecting this corporation and the opportunities available to the corporation. Give your opinions on how the corporation should deal with the most serious threat and the greatest opportunity. Justify your answer.

The operations of Dollar General are subject to the laws and regulations laid out by states in which it operates as well as the Federal laws by the United States government. It is because of this reason that Dollar General went through accounting fraud case in 2005 (U.S Securities and Exchange, 2005). Change of laws or introduction of laws touching products offered by Dollar General especially laws concerning the safety of products, healthcare reforms, and labor laws may lead to excess budget due to unplanned expenditure (Dollar General Corporation SWOT Analysis, 2017). In such an occurrence, Dollar General will be forced to channel more resources to comply with the new requirements. Another challenge is FDA monitory leading to consumer warnings due to some ingredients used in different products in company’s stores. Such factors may lead to losses as extra cost is incurred and revenues lost if a product is removed from the market. Since the regulations have become more complicated in the recent years Dollar general experiences increase compliance cost, hence it is one of the most challenging external threat. The company can deal with this through the treat through ensuring that budgeted costs for compliance laws are increased to avoid unplanned expenditure.

The most significant opportunity for the company is the existence of unexploited markets both in the United States and globally (Dollar General Corporation SWOT Analysis, 2017). The company has not covered all the states in the United States of America. Dollar General can open more stores in these states as well as opening branch all over Europe to match the records of other giants in the industry.

5. Give your opinion on the corporation’s greatest strengths and most significant weaknesses. Choose the strategy or tactic the corporation should select to take maximum advantage of its strengths, and the strategy or tactic the corporation should select to fix its most significant weakness. Justify your choices.

Like all other companies in any industry, Dollar General has strengths and weaknesses as well. The greatest strength enjoyed by the company is the fact that it operates in ”Small box discount segment in the industry” (Dollar General, n.d). In most of the company’s stores, the prices offered are discounted to fit the budgets of the frugal shopper while offering products of good quality (Dollar General Corporation SWOT Analysis, 2017). Due to this, the company has maintained its competitive edge. The company can utilize the strength through continuing to offer ”Small box design” as it maximizes profits.

The most prominent weakness of the company is the fact that it depends on third parties for supply of some products (Dollar General Corporation SWOT Analysis, 2017). Despite the company making products from own manufacturing plants it also depends on products from other suppliers. The company imports some merchandise from China hence changes in policies of countries such as China can significantly influence the company. The weakness can be addressed through hiring creative workers who can develop DG own merchandise instead of relying on imports.

6. Determine the company’s resources, capabilities, and core competencies.

Dollar General has financial resources which range from stores to manufacturing plants. Most of the stores are newly constructed and belong to the company. The company also has an able human resource which is vital to the success of company goals in any setting (Leonard, 2010). Areas, where employees are not able to deliver the company, can adopt outsourcing services to ensure that each department runs successfully. The company also possesses the capability of utilizing technology to the highest level. Due to the culture of the company of ”serving others” the company is competent in offering affordable and quality products.

7. Analyze the company’s value chain to determine where they can create value using the resources, capabilities, and core competencies discussed above

Dollar General operates in an online platform in its site Dollargeneral.com. Due to the rise of e-commerce many customers have turned to online shopping which could greatly benefit Dollar General (Leonard, 2010). To maximize this capability, Dollar General can ensure that they improve their online selling platform as well as the sales. It is because of this capability that Dollar General has witnessed a rise in profits compared to its competitors. For instance, during the 2014 financial year, the company recorded 9.3% increase in revenue over the preceding year (Dollar General, n.d). During the same period Wal-Mart one of Dollar General Competitors, had its revenues increased by only 1.6%. Therefore with the markets being shifted to e-commerce, Dollar General is in a pole position to utilize this platform which will increase its sales hence profits.

Conclusion

Dollar general has happily served its customers in the last 78 years of its operation. In the inception of the company by the Turner Brothers in Kentucky, no one could believe that the store had the potential to reach where it currently stands. Today it is one of the top 10 companies in the industry, and yet it is poised to achieve more greatness in the future. Dollar General is an excellent example of how a company should operate while dealing with the customers, the community, employees, and shareholders. Assessment of the external and internal environment of any business is vital to ensure its success. A closer examination of the SWOT analysis of Dollar general is critical since from the conclusions made it will be possible to propel the company to the top. The company should capitalize on its strengths and opportunities while developing long-lasting solutions to the weaknesses and threats. Dollar General has always been true to their mission, and this will see them continue to rise further even in the days to come.

References

Business Wire. (2011). Dollar General Corporation Adopts Interface Secure Managed Cloud Services. Referenced from http://www.businesswire.com/news/home/20110725006008/en/Dollar-General-Corporation-Adopts-Interface-Secure-Managed

Dollar General. About us. Retrieved from http://www2.dollargeneral.com/About-Us/pages/Index.aspx

Dollar General Corporation SWOT Analysis. (2017). Dollar General Corporation SWOT Analysis, 1-22.

Leonard, K. (2010). Dollar General Invests in the American Dream. American Libraries, (9), 11.

Michaux, S., Cadiat, A., & Probert, C. (2015). Porter’s Five Forces: Understand Competitive Forces and Stay Ahead of the Competition. [Place of publication not identified]: 50Minutes.com.

Randazzo, G. W. (2014). Developing Successful Marketing Strategies. New York, New York [222 East 46th Street, New York, NY 10017]: Business Expert Press.

Sanclemente-Téllez, J. (2017). Article: Marketing and Corporate Social Responsibility (CSR). Moving between broadening the concept of marketing and social factors as a marketing strategy. Spanish Journal Of Marketing - ESIC, 21(Supplement 1), 4-25. doi:10.1016/j.sjme.2017.05.001

Singer, J. & Hu, W. (2017). For These Immigrants, Dollar Stores Provide More Than Bargains. Referenced from https://www.nytimes.com/2017/09/13/nyregion/for-these-immigrants-dollar-stores-provide-more-than-bargains.html

U.S Securities and Exchange Commission. (2005). Sec sues dollar general corporation and five individuals for accounting fraud. Referenced from https://www.sec.gov/litigation/litreleases/lr19174.htm