Dollar General Industry and Competitive Analysis

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Dollar General Industry And Competitive Analysis
Dollar General Industry and Competitive Analysis


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
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