1. What is your assessment of the relative performance of the Dollar companies? What facts, ratios or metrics support your assessment? Following the 2008 recession, dollar store companies saw a rise in store earnings, while Walmart and Target experienced a decline. The dollars stores also increased in store count, increasing from 16,753 in 2005 to 25,340. Finally, given the sluggish wage and employment growth, 93% of consumers planned to maintain a cautious spending habit, according to a study conducted by Deloitte. These three facts show a positive outlook for the dollar store companies. On a per unit basis, Dollar companies also tend to be more expensive than larger retailers such as Walmart and Costco but their target market prefers to …show more content…
With the idea of convenience-based retailer in mind, by adding more store locations Dollar General will be able to capture more customers through the “fill-in-trips” they are taking for need-based purchasing. By having more locations, customers are less likely to drive extensive lengths to reach mass merchandisers and will purchase what they need at conveniently located stores like Dollar General for similar products at low prices. The acquisition is also strategic in terms of competition. By acquiring a competitor they can also acquire those customers and reduce the competition in the market. The overall increase in size through the acquisition will also allow Dollar General to take advantage of economies of scale and other cost savings methods. Family Dollar and Dollar General followed the same basic low-cost strategy in the market. The obvious synergies and compatibility of their similar strategic goals lead to stronger evidence for how value will be created through the acquisition instead of diminished. By merging Family Dollar into Dollar General, Dollar General projected synergies of $550 million to $600 million in savings. Twenty percent of this is derived from improved category management, forty percent from gross margin expansion, and another forty percent from reduction in SG&A. By combining, this would create a dominant convenience-based retailer in the U.S. and reduce competition for new dollar store locations. It would also create a more rational competitive environment while unlocking significant cost and revenue
Dollar Tree’s acquisition of the Family Dollar stores will better equip them to compete with the leaders in the market such as Wal-Mart, Target, and Dollar General. The acquisition of Family Dollar establishes a new giant of the dollar-discount industry; Dollar Tree will expand significantly to 13,000 stores throughout the United States and Canada (DollarTree.com, 2015). This acquisition also increases Dollar Trees’ access to markets with lower incomes, increases their buying power and their ability to negotiate greater discounts from suppliers while still discovering ways to reduce
They will continue to add more stores and expect to open its 3,000th store during the first half of 2005. Their ability to generate significant net operating cash enables them to continue to invest in product innovation, new technology, and the ability to strengthen its leadership in the industry.
The idea that department stores might be losing out to retailers like Amazon is not a new one. However, the extent to which one affects the other is not entirely clear. More specialized, non-department stores may also play a role in pulling department store sales downward. Clothing store sales, for example, grew slightly, by 1.2 percent, from January 2013 to January 2014 while department store sales declined. (Census Bureau, 2014)
Historically, Dollar General operated in a highly price sensitive market segment, with 55% of its consumer base earning an average annual gross income of less than $40,000.[2] To attract these customers, Dollar General employed an Everyday Low Price strategy similar to Wal-Mart’s. Thus, keeping costs low and driving high traffic volumes were critical to the company’s financial success. Dollar General achieved this strategy in several ways, including keeping rents and labor costs low, locating in low-income, high traffic areas that offered consumers few substitutes, and offering a wide variety of popular CPG and white label goods.
We can see that Target is successful due to its good brand strategy and thus in order to keep up the success the company must change their strategies and branding so that they can match the needs and the wants of the customers. Even when the companies have a lot of similarities still the differences are greater. Kmart took decisions at a late point and still struggling to capitalize on the opportunities and Target has been active always to capture opportunities and overcome its weaknesses.
The company had to be the second largest retailer shop in the US; it has many advantages that come along. The customers well acknowledge the company and its brand have been well established.
In general merchandise retailing, Wal-Mart’s primary competitors are Target and Kmart. Retail superstores such as Circuit City and Bed, Bath, and Beyond, also provide retail competition. A survey found that the majority of respondents favored Wal-Mart over stores like Target and Kmart. Respondents claimed Wal-Mart offered lower prices, better variety and selection, and good quality. The needs of consumers is an important economic feature in all competitive environments. What attributes (price, variety, quality, etc.) prompt buyers to choose one retailer over another is very important in the competitive landscape.
The top two reasons for such success in ranking first in retail store market, is because Wal-Mart is convenient globally and so are there prices in the competitive market . Wal-Mart has three segments which are superstores, discount stores, and Sam's Club stores, all of these are scattered in the United States, Canada, Mexico, Europe, Brazil, and Asia. One downfall was from Sam's club because too many were opening all over internationally it decreased the number of customers per location. Overall despite the company's decline on Sam's club sales, the Corporations did well over all with the figures brought in and conditions.
Walmart exclusively? It is a product of the times we live in and neither helps nor hinders. It's merely a part of a system of retail service that does exist and would exist with or without Walmart. The strange focus on places like Walmart but not Target or Home Depot or JCPenny or Kohl's always flabbergasts me. Like, because Walmart is the biggest, it's the guiltiest or something. Which is dumb. Nobody fucks workers like "softlines" retail. Walmart doesn't even come close.
Wal -Marts' major competitors are the Kroger co. #2 in annual sales, Albertsons' Inc. #3, Safeway,Inc. #4, and Costco Wholesale Group #5. Now even though Wal- Mart is leading the way in total sales the #2 and #3 businesses lead in way with total # of stores. The Kroger Co. has 3,302 with Albertsons at 2,476 stores nationwide. Wal-Marts total sales for that year alone was beating its 2nd place competition alone by more than 80 billion dolla...
Another thing to consider is a statement made on CNNmoney.com in regards to Dollar Generals consistent store growth that they are only "cannibalizing sales at their other stores and eroding their profits"
On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection becoming the largest retailer ever to do so in U.S. history. Most industry analysts attributed the immediate cause of the company's bankruptcy filing to a dull holiday season and stiff competition from WalMart and Target as the chain's more fundamental problem. But competition wasn't the root cause of Kmart's consistently poor performance. The real reason for Kmart's poor performance is that Kmart never had a marketing strategy. Kmart completely misunderstood its market and was positioning itself in the wrong direction. Also, on the strategic side, there are issues of where stores were located. On the whole, Kmart stores did not seem to be sited as well as the stores of the competition. Then there was the issue of technology. While Wal-Mart was becoming the relentless efficiency engine that we know today by investing in technology and streamlining the supply chain, Kmart held back. As Wal-Mart developed an infrastructure that enabled it to lower prices, Kmart slipped into a price disadvantage. This paper discusses these strategic problems that led to Kmart's poor performance.
Some complimented Kmart’s acquisition of Sears. Those most positive look to opportunities to cut unnecessary administrative expenses, increase buying power and cross-sell well known merchandise between Kmart and Sears. There are those who are very concerned about the acquisition. They are afraid that Wal-Mart, being their biggest competitor, will still be so much bigger than the combined Kmart and Sears. The name of the merged company will be changed it won’t be called sears. The acquisition of Sears cost to Kmart organiza...
It makes the nations more productive because of additional rivalry in the business and besides the stream of outlining likewise happens.
Department stores do not manufacture products nor create their own brands of merchandise, their products are not differentiated. As a result, consumers have low switching costs, customer loyalty is low, as they can easily purchase similar products elsewhere. These lower the barriers to entry, allowing new entrants a chance to gain customers.