Sample Research paper on Dollar General

Dollar General

Introduction

Dollar General is a retail company that focuses on selling general merchandise at discounted prices. The company operates as a chain in more than 35 major states across the United States. Currently, it operates more than 10,000 stores that are spread throughout the country, but centrally managed (Bourgeois & Sharma, 2009). The headquarters are based in Goodlettsville in Tennessee, US. It was formed back in 1939. Since 2007, it has been involved in the acquisition of private investors as an expansion strategy. The company has an interesting mission statement consisting of only two words, “serving others”. The ‘others’ in the mission statement is used to refer to all types of people the company deals with on a daily basis, including customers, employees, shareholders, and the community. They are all served to the best of their interests.

SWOT Analysis

Strengths

Widespread Locations

            The locations of the company’s stores are widespread and largely attractive. This is probably an important strength that the company has. The company has over 10000 stores that are found in more than 35 of the major states in the US (Bourgeois & Sharma, 2009). It is the major positioning factor in the company, since it has more locations than any other company in the United States.

The major reason as to why strong geographical presence of the company is considered a stronghold is that it accounts for high volumes of sales every day. Having stores in several locations often functions to penetrate the wider market, and therefore a strong customer base is achieved. The overall result is increased popularity and publicity, hence achievement of a strong positioning in the society.

It is a distinctive competence since it gives the company the upper hand against competitors in technically all parts of the world. Strong geographical presence has enabled Dollar General to reach out to most of the population and present their products. It continues to maximize on the same to date.

High Number of Employees

Dollar General has more than 90000 employees operating in the different stores spread out across the country (Fulmer & Kennedy, 2010). Customer service is a very important aspect in marketing, and employees paly a very important role in this. Employees are well trained to handle different types of customers on a manner that will leave everyone a winner in the long run. The high number also ensures that operations are smoothly running and no bottlenecks are experienced.

The high numbers of customers who frequent Dollar General Stores expect to be served with speed and accuracy, and their concerns or inquiries addressed immediately. It often requires a matching number of employees in the stores to serve these customers. The probability that customers would come back to the same store is highly influenced by the experience they get at any one time.

Weaknesses

High Level of Labor Turnover

The fact that Dollar General has a high number of employees also resonates as a weakness. There are labor unions and related challenges that are faced in some periods of time, leading to staff turnover. This comes as a disadvantage to the company due to the high costs involved in hiring and training new members of the labor force. It also results in disruptions in the normal operations. The customer suffers in the end, and his loyalty is put into test.

Having experienced employees in the company is always an advantage, especially when it comes to measuring overall performance of different employees. High employee turnover leads to lack of such experience and a smooth flow of operations. Sometimes, it may keep customers at bay. Permanent employees tend to establish a close relationship with consumers. This is relevant to Dollar General since the company has localized stores, which target consumers in different locations in the country (Babcock, 2011).

High Levels of Inventory in Warehouses

Dollar General experiences frequent problems when it comes to handling its inventory levels. The situation is brought about by the fact that the company acquires high levels of inventory in anticipation of high sales volumes. Sometimes, there is absolutely no space for extra merchandise, which results in having to lease commercial warehouses. There are general extra costs involved in handling and storage of inventory that is not needed in the near future, which reduces profitability and efficiency.

The inventory problem can be fully dealt with by conducting thorough analysis to estimate demand, based on the prevailing market conditions. This would enable the company to predict the level of inventory that would be required for any given period of time, and prevent overstocking (Fulmer & Kennedy, 2010). Calculations should be made to determine the economic order quantities, and a clear outline of when to place orders for supplies laid down.

Opportunities

Tapping the International Markets

Dollar General has had a very strong footing in the United States since its formation. It has achieved great success nationally. The international markets, especially emerging economies like the Middle East, present a much wider forum on which to market products. The world population provides a very diverse market that absorbs technically all kinds of products. The success of Dollar General can be resonated internationally to expand the company even further (Fulmer & Kennedy, 2010).

Going international will widen the market for the company, as well as lead to increased internal operations. The internal structure may also change to accommodate increased operations. Initial expenditure on start-ups and advertising is always high.

Visibility through Advertising and Customer Orientation

Advertisements go a long way in introducing the company to new markets, as well as providing information on the products it offers, locations and the pricing models. Despite the publicity, Dollar General can maximize on adverts to ensure that every nook and cranny of the market is penetrated.

Customer oriented services always leads to high levels of utility and customer satisfaction. The result is increased customer loyalty and buying. Coupled with advertisements, the end result would be a widened market for the company’s products.

Threats

Competition

In any particular industry, competition is always a serious threat to the existence of a firm Dollar General operates in the retail industry where competition levels are always high and unpredictable. There are retail giants like Wal-Mart and Costo, as well as single stores, which offer stiff competition.

Competitors keep the company on its feet in the process of maintaining its market share through a comprehensive customer retention policy. This policy includes those factors that should be considered in enhancing consumer satisfaction.

Increasing Operating Costs

The cost of operating businesses is plummeting in all types of business organizations. The causes are many, including the rising cost of production factors such as fuel and land. Inflation is one of the causes.

The general effect on the company is that there would be reduced profits. The implication is that the company may have to downsize in a bid to ensuring survival, or ultimately increase the prices of goods, which would be against its policies on formation (Bourgeois & Sharma, 2009).

Summary

Dollar general is has an opportunity to use its widespread presence to make more sales. Through promotions and advertising, increased sales volumes can be realized. The e-commerce sector can also be maximized in fueling entry into the international markets, where opportunities lie.

A close relationship with the customers would effectively deal with competition. All activities should be oriented to the customer. Research should be carried out to determine the changing needs of the community, and actions taken to address them fully. Through proper management of operations, rising costs can be covered through efficiency and optimal use of resources in the company.

References

Bourgeois, L., & Sharma, A. (2009). Dollar General Corporation (B).

Dollar General Mission Statement – Vision, Headquarters and Founders Facts and Trivia About Dollar General Discount Stores Chain. (n.d.).

Dollar General SWOT Analysis | Free SWOT Analysis. (n.d.).

Fulmer, W., & Kennedy, J. (2010). Dollar General Corporation (A).

Babcock, J. (2011, January 13). Dollar general.