Dollar General Stores Inc Dg Is One Essay

Excerpt from Essay :

Dollar General Stores Inc. DG) is one of the largest retail chains in the United States. Established in 1939, DG has been serving more than 40 markets in the country with almost 10,000 stores. The Company is headquartered in Goodlettsville, Tennessee but has retail stores in all the major and small cities and towns of the country. In its full owned retail stores, DG sells an extremely wide variety of branded and non-branded products at the cheapest rates for the general consumers of the United States. Although the owners named the company as Dollar Inc., but most of its product offerings are costlier than one Dollar (General, 2012).

The Mission and Vision of Dollar General Stores:

The company's mission is to provide the customers all what they want in their daily life; from daily fresh food and grocery items to the top quality consumer and electronic products. The company not only aims to provide the most convenient shopping experience to its customers, but also wants to facilitate them with the cheapest rates among all its competitors. The vision of Dollar General Stores is to become the most competitive organization in the retail industry of the United States. Through its excellent customer services and a wide range of product offerings, the company wishes to expand its business network, make the largest market share, win the customers' loyalty, and become the largest organization of its type (General, 2012).

The Prime Stakeholders of Dollar General Stores:

The company's prime stakeholders include customers, employees, suppliers, distribution agencies, business development and marketing firms, and the governing authorities. At Dollar General Stores, customers are considered as the most important stakeholders for its business. It is because they are the sole reason for doing business. It is the customer who is ready to buy the products offered by Dollar General Stores at the specified price. The second most important stakeholder is the organization's employees who work in its offices and outdoor locations. They are responsible to achieve the organization's goals and make it a competitive brand in the retail industry of the country. The supply chain of the company is also considered a prime stakeholder. From suppliers to the final distributors, the supply chain of Dollar General Stores consists of reliable firms that ensure a continuous rendering of services and contribution to the promotion and development of its business. The regulatory authorities govern the way Dollar General Stores operates in the retail industry. Therefore, they are also considered as a key stakeholder for its business (General, 2012).

The Five Forces of Competition and their impacts on Dollar General Stores

Michael Porter presented a set of five forces that help an organization in analyzing the competitive environment in its industry. These forces are collectively called the Porter's Five Forces Model (Kotler, 2008). Dollar General Stores faces a strong competition from its well-established as well as new competitors in the United States industry. The intensity of this competition can be judged by using the Five Forces Model.

1. Competition among the Existing Rivals:

Dollar General Stores has been operating in the United States market for more than seven decades. During this long period of time, it has established its business in all the major and small markets of the country and made a large number of brand loyal customers from these markets. The biggest rival of Dollar General Stores is Wall Mart which is offering an immensely wide range of products in all the major markets of the country. In addition, there are various other strong competitors which are giving a stiff competition to Dollar General Stores. These top competitors use expensive marketing campaigns to promote their businesses and attract the potential customers towards their products. These competitors are a big threat for the company's sales and profitability (Hoffman, 2005).

2. Competition from the New Entrants:

In addition to the existing competitors, Dollar General Stores also faces a strong competition from new businesses which are trying to penetrate the U.S. retail industry and establishing their businesses in the potential markets. Although Dollar General Stores is an old retail chain in the country, the new competitors are still able to snatch its customers by offering excellent customer services and same quality brands. The only competitive advantage which Dollar General Stores can utilize to survive in this severe competition is the trust of its brand loyal customers and supply chain members (Kotler, 2008).

3. Threat of Substitute Products:

Dollar General Stores mainly deals in the sales and marketing of branded products in all its large and small scale retail stores. However, it also offers a huge variety of non-branded products which are manufactured by new local businesses of the United States. The branded products have large number of substitute products that are available at cheaper rates in small scale private stores. These substitutes are a threat for the sales of the branded products that are offered by Dollar General in its retail stores. When customers look for new substitute products, the sales of existing top quality products is negatively affected.

4. The Bargaining Power of Suppliers:

As there is a large number of competitors in the retail industry, the suppliers are on a stronger bargaining edge towards all the industry competitors. They can charge a good price for their products due to the low bargaining power of the retailer firms. Dollar General Stores purchases its products from the most reliable vendors from the industry. They do not charge a high commission for their services; however, they are also offering the same services to various other competitors of Dollar General Stores. It makes the competition more severe for all the industry competitors (Paley, 2006).

5. Bargaining Power of Buyers:

The United States market is full of retail chains and private stores. Therefore, the retail market customers have a large choice to choose the best retailer to make their purchases. Keeping in view the intensity of competition, every retailer is bound to charge a fair price for its products so that customers do not switch to other competitors by looking at the high prices of its products. Thus, buyers are at the stronger bargaining edge in the U.S. retail industry. Dollar General Stores intends to increase its sales and number of customers by keeping the prices of its products at the minimum possible level (Kurtz, MacKenzie, & Snow, 2010).

The SWOT Analysis of Dollar General Stores

SWOT Analysis of an organization consists of Internal Environmental Analysis (Strengths and Weaknesses) and External Environmental Analysis (Opportunities and Threats). It helps the organization in assessing its capabilities which can be used to avail the attractive opportunities, overcome deficiencies, and mitigate the risks and threats present in the business environment (Lancaster & Withey, 2007). The following section presents a complete SWOT Analysis for Dollar General Stores along with a set of recommendation on how it can overcome its weaknesses, mitigate the threats, and avail the potential opportunities by using its core strengths and competencies:

1. Strengths:

The biggest strength of Dollar General Stores is its brand image which has helped it to establish its business in the whole United States and get a high market share. The competitive advantage of Dollar General Stores is its presence in the small and under-developed towns of the country. It is present in almost 40 states of the United States. A large number of its retail store are in those areas where there is no other large competitor operating with its own retail store (General, 2012). Dollar General Stores sells its products at its fully owned stores as well as places them in the private retail stores in small town. The pricing strategies of the company are also a big strength over all its small and large scale competitors.

Dollar General Stores offers its products at very cheap rates which greatly helps it in attracting the potential customers towards its stores. It takes great advantage from its small town incarnations which costs it comparatively less than those in the large cities of the country. The costs saved from small town incarnations can be used by the company in opening new stores in the unreached potential markets of the country. Moreover, it can invite reputed vendors and suppliers from the market to make long-term business relationships. The company's brand image and track record can help it to avail the attractive opportunities present in the market (Paley, 2006).

2. Weaknesses:

The biggest weakness of Dollar General Stores is its lack of focus on marketing strategies. The top level competitors like Wall Mart are using expensive electronic and print media campaigns to create awareness of their new product offerings, discounts, and customer services to the potential customers. On the other hand, Dollar General Stores is just expanding its business network without making effective marketing for their success in the markets. Another weakness of Dollar General Stores is the fewer retail stores in the populated areas of the country where its top competitors have been operating successfully. It must realize that larger markets can bring…

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