Family Dollar Case Study

Topics: Variety store, Wal-Mart, Marketing Pages: 7 (2450 words) Published: September 3, 2013
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Contents

Executive Summary2
History3
Marketing Strategy3
Family Dollar Growing4
Battle of Walmart and Family Dollar5
Re-engineering6
Inventory Control6
Strategy Evaluation7
Family Dollar’s Code of Conduct8
SWOT Analysis9
Family Dollar SWOT Matrix14
Works Cited15

Executive Summary

Family Dollar Stores, Inc. operates a chain of self-service retail discount stores primarily for low- and middle-income consumers in the United States. Its merchandise assortment includes consumables, such as household chemicals, paper products, food products, health and beauty aids, hardware and automotive supplies, pet food and supplies, and tobacco; and home products comprising blankets, sheets, towels, housewares, giftware, and home décor products. The company also provides apparel and accessories consisting of men’s and women’s clothing products, boys’ and girls’ clothing products, infants’ clothing products, shoes, and fashion accessories; and seasonal and electronic products, such as toys, stationery and school supplies, and seasonal goods, as well as personal electronics, including pre-paid cellular phones and services. As of April 10, 2013, it operated approximately 7,600 stores in 45 states. The company was founded in 1959 and is based in Matthews, North Carolina.

History

Family Dollar Stores, Inc., hereinafter referred to as Family Dollar, is a discount store in 43 states, mostly based in the northeastern, southeastern, southwestern and northwestern areas of the United States. The founder, Leon Levine, opened his first store in Charlotte, North Carolina in 1959. Family Dollar had fantastic growth with record sales in the early 1970’s. But by the mid-1970’s, there were some challenges in the textiles, tobacco, and furniture industries which were hit hard with financial devistation However, by the end of the 1970’s, they were still able to acquire 40 additional stores from a company called Sav-A-Stop. These additional 40 stores were added to the 400 they already had in the southern states. By the 1980’s, they were slowly improving the company by adjusting some of their weaknesses. In addition, they were also able to open an additional 36 stores ahead of their original plan. Marketing Strategy

Leon Levine’s marketing strategy was to sub-divide the market into distinct subsets, also known as market segmentation (Chapter 8. Market Segmentation). His market segment was to offer products to lower middle income families that needed quality clothing and shoes. Family Dollar offers a variety of products that are mostly under $10 and range from food products to housewares to linens to apparel. They are able to offer these products at such a low price because they purchase from companies who have over stocked inventories. Another way they were able to offer these products at a significantly reduced price was from buying over-run quantities from manufacturers. One major reason for their low prices is their distribution center which was large enough to handle getting larger quantities at discounted rates. Additionally, they were able to make bulk deliveries to their stores in a timely manner.

Family Dollar Growing
When Family Dollar decided to expand geographically, they were financially able to do so due to the fact that the company had no long term debt. This allowed them to expand without negatively affecting their long-term debt too much. They were able to expand into Alabama, Tennessee, Florida, Kentucky, Mississippi, Michigan, Texas, Virginia and West Virginia. By the mid-1980’s, there was a total of 1,107 stores in 23 different states or nearly half of the United States.

Battle of Walmart and Family Dollar
At the same time Family Dollar was expanding, so was Wal-Mart. Wal-Mart had moved into Family Dollar’s market segment in the south offering products at a low price. This caused some issues for Family Dollar as...

Cited: Family Dollar Corporate. (2008, May 28). Retrieved from Business Partner Code of Conduct: http://corporate.familydollar.com/Docume...duct%2520Certificate.pdf
Family Dollar Stores, Inc.-Company Profile, Information, Business Description, History, Background Information on Family Dollar Sotres, Inc. (n.d.). Retrieved from Reference for Business: http://www.referenceforbusiness.com/history2/66/Family-Dollar-Stores-Inc.html
Family Dollar SWOT Analysis. (2013). Family Dollar Stores, Inc. SWOT Analysis, 4-8.
Global Sourcing an Extension of Merchandising Team. (2012). MMR, 20.
Reasons Why Dollar Stores are Worth a Second Look. (2012). Money Advisor, 13.
Wilson, M. (2008). Everday Savings. Chain Storage Age, 96.
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