Dollar general

Topics: Variety store, Dollar General, Dollar Tree Pages: 7 (1212 words) Published: October 18, 2014
UNIVERSITY OF SOUTH FLORIDA

Case Study 1

EIN 6183 Engineering Management Policy & Strategy

10/11/2014

Abstract
Dollar General Corporation is United States largest small-box discount retailer headquartered in Goodlettsville, Tennessee [1]. Dollar General offers both name brand products and generic merchandise [2]. Its competitors include Family Dollar, Dollar Tree which also operate in deep discount segment of US retailing. The following case study discusses about the various political, economic, social and technological forces that Dollar General have faced and their impact on the company. The report also talks about the critical success factors of Dollar General. The report is concluded by summary of key learning’s from the case study. PEST Analysis for Dollar General

Political: In the year of 2006, Janet Calvert, a former store manager, filed a complaint that she was paid less than the male storage managers because of her gender, in violation of the Equal Pay Act and title VII of Civil Rights act of 1964. There were other plaintiffs which were added to this case. This case resulted in Dollar General reaching a settlement in principle, by which it would pay $15.5 million to the plaintiffs and their legal charges costing around $3.25 million. The company was expected to receive reimbursement of $15.9 million from its Employment Practices Liability Insurance if these payments were approved by the court. This case did impact Dollar General Approach towards pay setting policies and procedures for new store managers [3]. Economic: During the recession period from 2007-2009, the customers of Dollar stores suffered from unemployment and lower purchasing power. And even the people from higher income brackets started purchasing the dollar store products for seeking larger bargains. This led to the increase in the customer traffic and larger sales for Dollar stores. Dollar general captivated upon this scenario and continually reviewed its merchandise mix, and adjusted it accordingly. It expanded its offerings of consumable goods to serve customers’ needs and increased its sales [3]. Dollar General captured trade-down shoppers who came from middle and higher level of incomes (who generally had not shopped at dollar stores for all these years, but came during the recession to find bargains). Over the time the company adjusted its pricing strategy for items by pricing it from $1 to no more than $10. And managers of this company also believed that the company’s ability to attract customers of varying economic status depends on offering both national and store brands [3]. This way Dollar General was able to satisfy the customers of varying economic status, which resulted in more sales and profit for the company. Social: Consumer psychology during the recession period was to get the products at a lower price and the store to be available at a convenient distance (not too far). During this time Dollar General varied its price from $1 to no more than $10 and offered consumable goods at a very reasonable price. And it has also opened new stores within the reach of 3 to 5 miles, so that every customer is able to get easy access to their neighbourhood store [3]. This resulted in satisfying customer’s need as well as increasing company’s sales. Technology: During the year 2008 when the cost of the fuel increased, the Dollar General’s distribution costs went up and the company’s gross profit was affected. In order to mitigate this problem, the company completed the installation of a voice pick system by the year 2010 in all the distribution centres, so that the employees in the distribution centres can communicate with warehouse software systems by speech recognition [3]. This was a good strategic move by the company as its use is expected to increase rapidly over the next few years with evolving technological advancements. The company also installed new analytical and monitoring tools to...


References: [1] Dollar General, Retrieved October 11 2014, http://www2.dollargeneral.com/About-Us/pages/Index.aspx
[2] Dollar General, Retrieved October 11 2014, http://en.wikipedia.org/wiki/Dollar_General
[3] Parnell, John A. (2014). Strategic Management: Theory and Practice. 4th edition. SAGE Publications.
[4] Dollar General Case Memo Marketing Essay, Retrieved October 11 2014, http://www.ukessays.com/essays/marketing/dollar-general-case-memo-marketing-essay.php
[5] Amway, GM, and Dollar General among corporations making ‘Good’ A Goal, Retrieved October 10 2014, http://www.forbes.com/sites/devinthorpe/2013/08/29/amway-gm-and-dollar-general-among-corporations-making-good-a-goal/2/
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