Almost everyone has heard or read about the successful drug retailer dm-drogerie markt GmbH & Co. KG (dm-drogerie) that opens more and more stores in Germany and abroad and that operates in highly competitive markets. The aim of the following case study is to present this ambitious company and show how it is performing against its key competitors.
The case study starts with a short description of dm-drogerie's corporate history including general facts about its business development, its product and service range as well as the development of its revenues in recent years.
This is followed by a SWOT analysis trying to provide an overview of dm-drogerie's economical strengths, weaknesses, opportunities for the future and threats.
In the last part of this work, the results of the SWOT analysis will be summarized and interpreted.
2 Company Description
dm-drogerie was founded in 1973 by Götz W. Werner in Karlsruhe, Germany. The company is Germany's second largest drug retailer offering a wide range of products including cosmetics, perfumes, pharmaceutical products, hygiene articles, health foods, baby foods, detergents, bodycare and hair products, pet foods as well as a photo service in its stores and via internet. Since 2007, dm-drogerie provides a mailorder pharmacy service in co-operation with the Dutch mailorder pharmacy "Venlo Europa Apotheek". The service includes the dispatch of prescription and non-prescription drugs. Due to the use of this distribution channel, the company is able to grant its customers discounts up to 40 % on certain drugs.
dm-drogerie attaches particular importance to its private brands which contribute a lot to the company's success. These products are about 30 % cheaper than comparable branded articles and have an excellent price-performance ratio. Unlike its competitors, dm-drogerie does not offer special offers. Instead of that it sells its products at permanently low prices.
In 1976, dm-drogerie started its European expansion outside Germany. Today, the company operates in Austria, the Czech Republic, Hungary, Slovakia, Slovenia, Croatia, Serbia, Bosnia Herzegovina, Romania and Bulgaria. In the end of the 2009/2010 fiscal year, dm-drogerie was running 1,185 chain stores in Germany and 1,218 abroad employing more than 36,000 people of which nearly 23,000 work in German stores. During the year, the company generated a turnover of € 5.65 billion of which € 4.07 billion were generated in Germany and € 1.57 billion in the other European countries in which it operates.
dm-drogerie's main competitors are Schlecker, Rossmann, Müller, REWE Group, Aldi and Lidl. Currently, Schlecker is the market leader in Germany.
3 SWOT Analysis
Companies want to know as much as possible about their current situation. This is done by a situation analysis which is in fact a review of the company's present state and an evaluation of the internal and external factors. One part of this situation analysis is a SWOT analysis. A SWOT analysis is an assessment of the company's strengths and weaknesses as well as its opportunities and threats. Strenghts and weaknesses are features of the company itself, relative to existing and potential competitors and other external forces. Opportunities and threats are features of the external environment, mostly competitors and other external pressures (namely industry forces and political, economic, social and technological factors).
Advanced Logistics Management
dm-drogerie owns several modern distribution centers throughout Germany which boast advanced logistic solutions. The company's distribution centers are located in Waghausel and Weilerswist. Each of these is very large and sophisticated. More than 12,000 articles are distributed each day. The new distribution center in Weilerswist belongs to the most modern ones of its kind in Europe. About 2,000 pallets leave Weilerswist per day. dm-drogerie's warehouses are...