Dollar General Stores: mission, stakeholders, and competitive analysis

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).

Strategies to Maximize Competitiveness and Profitability

Dollar General Stores is a large scale retailer in the U.S. market. The biggest benefit which can be realized from its scale of operations is capturing the greatest market share from the industry. To achieve competitiveness and make higher sales revenues, Dollar General Stores will have to keep its prices at the minimum possible level. As a convenient shopping point, a Dollar General Store should sell and promote every kind of products which customers need in their daily life. It can add more brands to its current product offerings and create inspiring motivational campaigns to attract customers towards these new brands at its stores. Moreover, it should conduct customer survey in order to get their feedback on the quality of products and customer services. It will also help in improving the brand image which is essential to achieve sustainability, competitiveness, and improved financial performance (Kotler, 2008).

Corporate Governance Issues

Dollar General Stores has been facing certain corporate governance issues for the last few years. The most important among them was its hostile takeover by the Buck Holdings. At present, the Board of Directors at Dollar General Stores constitutes members from three different organizations. The Board believes that the company has been operating with its full strengths and competencies. However, it aims to improve the Financial Strength (MRQ) of the company by improving its debt-to-equity and profit margin ratios. To achieve this aim, the company will have to decrease its dependence on leveraged money. Secondly, the Board has decided to set the prices of all branded products comparatively lower than its competitors. It will make the customers buy these products from Dollar General even if its store is located in a farther location. To increase the profit margins, the company will need to improve its operational efficiency, cut down extra marketing expenses, and make an efficient use of the resources Dollar (General, 2012). Another corporate governance issue is the growth strategies in the short run. Based on the environmental analysis, it can be recommended that the Board should also focus on opening Dollar General Stores in the most populated areas of the country in addition to choosing small cities and towns. It will give a higher Return on Investment (ROI) to the company (Jenny & Scammon, 2010).