Dollar General Corporation - Internal Environment Analysis

...

- Respecting Diversity :

Diversity at all levels in the organization is respected and cherished. There is a focus to not let any sort of biases and discrimination hamper employee related decisions in the organization.

MANAGEMENT STRUCTURE

[pic 4]

STRENGTHS

SMALL BOX OPERATOR

Dollar General’s core strength lies in operating in the deep discount segment of the retail industry typically known as the small box segment. The company has gained a substantial market share while competing along with big retailers such as Walmart by offering merchandise at low prices. There model has been fueled by the weak economic conditions in small US towns wherein price has become the consumer's prime concern. In addition to the branded products that DG stocks, private label products are provided to consumers at significant discounts.

ECONOMICAL

The typical size of a Dollar General Store, its design and location are designed in a manner to keep the initial capital investment to a minimum level. Also the expenses on maintenance are heavily reduced leading to huge savings in cost overall for the company. They promote self-service model further reducing the manpower requirement and subsequent associated costs.

PRODUCT MIX

Dollar General has managed to perfect the product mix available in their stores in different localities based on the local demands. Their stores located closer together in nearby locations also help Dollar General to refurbish much more effectively than their competitors.

WEAKNESS

Dollar General has to depend on a variety of different suppliers for sourcing their products both domestic and international. This creates a dependence on vendors which can be detrimental for DG in terms of lost sales and even long term loss of business in case of repeated such occurrences. There is also the risk associated with the international exchange rate fluctuations for the products that Dollar General sources from International markets. This is typically crucial with regards to the very low margins on which it operates.

BRAND IMAGE

[pic 5]

Image Source: www.dollargeneral.com

Dollar General Corporation has always tried to portray an image of a company which cares for the customer. They emphasize heavily on “Serving others” which includes the community in general. Over the years DG has recalled several products which posed threats to the consumers. Noticeable among these was the recall of its toy gun sets, Special Forces and SWAT as they posed a serious choking hazard to children. In 2011, Dollar General recalled its heater fans of the True Living and the Quartz brand as they posed potential fire hazards.

Dollar General has also funded literacy programs for children of employees and society in general. The Dollar General Literacy Foundation has served this purpose for more than 20 years. The foundation has awarded more than $110 million to schools and non-profit organizations to help ensure the education of millions of individuals.

The company has been very active on social media and is part of discussions on various forums. It had launched its iPhone and Android apps in 2012 to provide the customers access to its store locations, product descriptions, coupons etc.

FINANCIAL PERFORMANCE

Dollar General has recorded a steady increase in its market valuation and stock price as is reflected in the image below.

[pic 6]

Image Source: Google Finance

KEY FIGURES IN FY2015

Revenues: $18,909.6 million Increase of 8% over the previous year Operating Profit: $1,769.1 million Increase of 1.9% over the previous year Net Profit: $1,065.3 million Increase of 3.9% over the previous year.

Its failed bid to take over North-Carolina based family dollar in 2015 is a cause of concern for the corporation. It now has to compete with the joint might of Dollar Tree-Family Dollar along with having to fight stalwarts of the business like Walmart. DG plans to open hundreds of new stores to further intensify the battle among all Dollar stores. However it remains to be seen if Dollar General can sustain itself amid the increasing competition

REFERENCES

- http://consumerist.com/2015/03/12/dollar-general-plans-to-open-hundreds-of-stores-after-failed-bid-for-family-dollar/ “ Dollar General plans to open hundreds of stores after failed bid for family dollar” visited on 23rd Jan 2016.

- http://fortune.com/how-dollar-store-war-was-won/ “How dollar store war was won” visited on 23rd Jan 2016.

- http://www2.dollargeneral.com/dgliteracy/Pages/index.aspx Dollar General webpage visited on 23rd Jan 2016.