Dollar General is...
Question 1: Describe Dollar General's business strategy. Why has the company been so successful?
Whilst Dollar General is unable to keep up with Wal-Mart in terms of total revenue, it makes its mark in earning a greater percentage of revenue on each dollar of sales. Dollar Generals revenue per dollar of sales for the last year was 4.3 cents, compared to 3.5 cents for Wal-Mart.
There are many strategies that been contributing factors in the success of Dollar General. These factors can be as simple as the specific placement of stores to the more complex running of stores; however all of these factors contribute to a business with widely renowned success. The strategies can be divided into three main areas; Stock and merchandise, placement of stores and running of stores.
The main mission for Dollar General is serving others. This is reflected through their everyday low prices. Due to the low prices, Dollar General's products are more readily available to customers from many different backgrounds. Competitors, including 99 cents only stores, gain the majority of their revenue through middle to high income earning customers. Dollar General, on the other hand, relies more heavily and caters their products for people with low to middle incomes. The maximum price for any product available at Dollar General is $35, with one third of the stock priced at $1 or lower.
Placement of stores:
The view of "Dollar General" (date) is that the placement of stores contributes highly to the stores success. Dollar General prefers to steer clear of the super centre store model used by leading competitors such as Wal-Mart, and rather/instead establish smaller stores within a community. The majority (56%) of Dollar General stores can be found in shopping centres. 41% of stores can be found in freestanding buildings leaving a mere 3% which are found in urban structures.
Running of... [continues]
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