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DOLLAR GENERAL COMPANY REPORT

Table of Contents

EXECUTIVE SUMMARY3
INTRODUCTION5
ANALYZING THE INDUSTRY5
COMPETITORS5
CUSTOMERS5
MERCHANDISE6
LOCATION6
UNDERSTANDING DOLLAR GENERAL’S BUSINESS STRATEGY6
STORE GROWTH6
PRODUCT EXPANSION7
TECHNOLOGICAL ADVANCEMENTS7
EXPLORING COMPETITIVE ADVANTAGE7
LOW-COST STRUCTURE8
SUSTAINABILITY8
COMPARING SMALL AND LARGE FIRMS9
ADVANTAGES OF THE SMALL FIRM9
DISADVANTAGES OF THE SMALL FIRM9
LOOKING TO THE FUTURE10
REPOSITIONING10
INTERNATIONAL EXPANSION10
CUSTOMER SERVICE10
50TH ANNIVERSARY11
CONCLUSION11
WORKS CITED14
Appendices Table of Contents

APPENDIX A – PORTER’S FIVE FORCES………………………...………………..I APPENDIX B – PORTER’S GENERIC STRATEGIES….………………………….V APPENDIX C – STAKEHOLDER’S ANALYSIS…………………………….……VII APPENDIX D – INTERNATIONAL BUSINESS…………………………………….X APPENDIX E – SWOT ANALYSIS…………………………………………………XII APPENDIX F – MIS…………………………………………………………………..XV APPENDIX G – PRODUCT COMPARISON CHART…………………………...XIX APPENDIX H – INDUSTRY ANALYSIS CHART……………………………….XXI APPENDIX I – MISSION STATEMENTS………………………………………XXIV APPENDIX J – STORE LOCATION MAPS…………………………………….XXVI APPENDIX K – 2004 VALUE LINE REPORT………………………………….XXIX APPENDIX L – BUSINESS LAW CONSIDERATIONS……………………….XXXI

Executive Summary

The purpose of this report is to determine whether Dollar General (DG) has the right strategy to maintain a sustainable competitive advantage within its industry. Also, the report will discuss how small firms, such as DG, are able to compete with larger firms, such as Wal-Mart. In this report, recommendations are also given to guide DG in obtaining a sustainable competitive advantage in the discount retail industry.

Analyzing the Industry

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
customers
merchandise
location

The way that these four factors interrelate determine how well a business will do in the particular industry. Understanding Dollar General’s Business Strategy

Every business needs a strategy to direct it towards achieving a competitive advantage within its industry. DG’s current business strategy is growth. Some growth initiatives include:

store growth
product expansion
technological advancements

Clearly, by continuing to focus on these growth initiatives, DG can continue to further increase its profits and success in the industry. DG’s growth strategy gives it a competitive advantage over its rivals, who are not expanding at the same rate. Exploring Competitive Advantage

DG has a current competitive advantage within its industry. DG maintains this advantage through a unique cost-efficient approach. This low-cost structure is apparent through low inventories, low advertising costs, and location of stores in rural areas. Though profitable in the short-run, its current advantage is not sustainable. It is not sustainable due to:

rivals’ similar competitive strategies
low barriers of entry into the market
the absence of a differentiation strategy

When examining competitive advantage, it is also important to consider the market and take into account the existing competition against larger firms.

Comparing Small and Large Firms

Small firms often find it difficult to compete with larger firms. Though there are some disadvantages DG will never be able to overcome due to its size, small firms have advantages over their larger counterparts.

In order for a small firm, such as DG, to compete with larger firms, there are many options available.

Looking to the Future

There are several ways that DG can improve profitability and success. Several of which include:

repositioning itself in the market
expanding internationally
enhancing customer service
promoting its 50th Anniversary

By taking these recommendations into...
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