Dollar General Case Essay

DG has a current competitive advantage within its industry that is maintains through a unique cost-efficient approach. This low-cost structure is apparent through low inventories, low advertising costs, and location of stores in rural areas. Though profitable in the short-run, DG's current advantage is not

1) Should Wal-Mart be expected to protect small businesses in the communities within which it operates?

2. For each of the following scenarios, on the basis of the specific facts and circumstances,

to see where the company is now with the use of a brief Swot analysis.

Based upon the recent acquisition, I would categorize Dollar Tree as an analyzer in Miles’ Snow’s strategy typology. Parnell describes the characteristic of an analyzer as having tight control but the willingness to demonstration loose control over new undertakings” (Parnell, 2014, p.196). In many respects, Dollar Tree has often taken a wait and see approach to understanding the dynamics of Dollar General first mover approach. Well known for new store openings, “730 new store openings was the plan for Dollar General, and they opened 700 in 2014” (Bose & Ramakrishnan, 2015, para.4).

Divestitures of corporate asset have a variety of forms, including sell-offs, leveraged buyouts, and spin-offs. A spin-off is a pro-rata distribution of the shares of a firm’s the newly formed subsidiary to the shareholders of the original company (parent company). Unlike other types of divestitures, a spin-off doesn’t involve exchange of cash. In other words, there is no cash transaction taking place in spin off. Therefore, a spin-off is not generated by the company 's motivation of generating cash flow benefits. Nevertheless, spin-off is not a costless transaction. Since a spin-off is associated with the cost of registration, new share distribution and dividend payment. Both the parent company and spun off company traded separately as the consequence of spin-off. Also, the subsidiary operates independently from the parent company. After the spin-off, the shareholders of the parent company hold shares in both the parent company and the subsidiary. Therefore, the performance of parent company and spun off company can be analysing as separate entities.

There's one problem, however: Going private may not be all that easy -- or help out the company in the end.

‘The theories of why firms go public provide insight into why firms go private because they examine many of the costs and benefits of being a public firm’ (Bharath; p6, 2009).

Stocks and bonds qualify as the two major classes of assets that are used by investors in planning their portfolios for investment. Stocks offer the investors an opportunity to have a stake in the company, whereas the bonds are affiliated to the loans that are made to a company. Generally stocks are considered to be very volatile and much risky to invest in as compared to the investment in bond (Alexieff, 2014). However there exist different stock and bond types that have with them varying volatility levels and the risks also vary.

Considerable evidence has emerged which shows that only strategic divestitures are valued positively by the stock market (Montgomery, Thomas and Kamath, 1979). Announcement of such divestments that allow the firm to redirect its strategic mission create large positive abnormal returns to divesting parents. Bad divestitures are classified into 3 groups (Markides & Berg, 1992):

The prospectus shows the business plan for the company and relevant information about its growth. For instance, if the company grew 20 percent each quarter for six consecutive quarters, the prospectus should list this fact. Any information that demonstrates the sustainability of the company is included in its investment prospectus.

Divestitures of corporate asset have a variety of forms, including sell-offs, leveraged buyouts, and spin-offs. A spin-off is a pro-rata distribution of the shares of a firm’s the newly formed subsidiary to the shareholders of the original company (parent company). Unlike other types of divestitures, a spin off doesn’t involve exchange of cash. In other words, there is no cash transaction taking place in spin off. Therefore, a spin-off is not generated by the company 's motivation of generating cash flow benefits. Nevertheless, spin-off is not a costless transaction. Since a spin-off is associated with the cost of registration, new share distribution and dividend payment. Both the parent company and spun off company traded

"Wal-Mart, is an American retail corporation that runs chains of large discount department stores. The company is the world's second largest public corporation, according to the Fortune Global 500 list in 2013, the biggest private employer in the world with over two million employees, and the largest retailer in the world. The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, is also the largest grocery retailer in the United States" (Wikipedia, 08). A leader with a solid vision, Sam Walton started the company, and made it into the forerunner in discount retailing that it is

The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers, thus reducing the risks of investing. Stock prices change everyday by market forces. This implies that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.

The possibility to change a public company to a private is in regards to these features: