Dollar Tree Case Analysis

When examining competitive advantage, it is also important to consider the market and take into account the existing competition against larger firms.

Dollar Tree is now the largest U.S. Discount chain, due to its recent acquisition of its rival, Family Dollar in 2015 (Much, 2016). To maintain its position and remain successful, Dollar Tree “needs to get a better performance from its Family Dollar Store outlets, which were struggling prior to the merger" (Much, 2016, para. 2). Merging with Family Dollar now enhances Dollar Tree’s range of customers, new markets, market shares, financial performance, and improve growth prospects (Much, 2016). Additionally, this acquisition anticipates generating significant synergy opportunities and free cash flow to pay off debts (Guiler, 2015, para. 13 & 14).

Dollar General and Family Dollar are not what they claim to be in the view of their customers. As for some items in Dollar General and Family Dollar are seen to be marked up more compared to the same item of better quality at a Walmart Store. If the items bought at a “dollar” store are a dollar there is more likely of a chance that the item will be of low value in the first place, but not all the time. In the true dollar stores like Dollar Tree, there are a lot of “here and there” items that are very well worth a dollar to many people, others not so good of a deal. The same “here and there” items at a Family Dollar or Dollar General are usually known to not be a dollar, but the items are still sold to customers that

This report is written in order to perform financial analysis on Whole Foods Market Inc and its competitor Safeway Inc. This in depth report is both to determine which company is doing financially better and how also how they are doing comparing them to their whole industry.

The dollar store industry caters to low-, middle-, and fixed-income buyers who are price sensitive. Regarding consumables, buyers are looking for the best bargain for an item that they will need to purchase again in the near future. The high threat of customer buying power drives profitability down. In contrast to buyer power, supplier power is low. This is due to the large number of suppliers that offer price-competitive, undifferentiated products. Suppliers must rely on the retail industry to sell their product, so forward integration is unlikely. The low threat of supplier power increases profitability. The threat of substitutes is medium. Since extreme-value retailers offer a focused assortment of goods in a small-box format, mass retailers such as Wal-Mart and Target are substitutes rather than competitors. On one hand, mass retailers have a larger assortment of branded goods, economies of scale, and are highly price competitive with extreme-value retailers. On the other hand, extreme-value retailers are more convenient due to the small-box format, allowing a customer to get in and out quickly. The products being sold are undifferentiated so price-performance tradeoff is low. The threat of new entrants into the industry is medium. There are areas of the U.S. with no extreme-retail presence, making it easier for a new entrant to open and capture market share. On the demand side,

The Dollar Tree embraced a new tactic and decide to implement their own private brand label into their stores. These stores are now the fastest growing type of retail store in the country, which is why I chose to write about this store. I had no idea that these stores were the fastest growing, which is what intrigued me when I read it online. Most customers like to be able to go to one store and find all of the products they need in one location, The Dollar Stores are making this easier on consumers.

Dollar Tree, Inc. is the world’s leading operator of the One Dollar variety stores. “The Company also offers value merchandise at prices above $1 at its 219 Deals stores and at prices of $1.25 CAD at its 210 stores in Canada. Overall, Dollar Tree operates more than 5,300 stores across the 48 contiguous United States and five Canadian Provinces, supported by a coast-to-coast logistics network and more than 90,000 associates. A Fortune 500 Company, Dollar Tree has served North America for more than twenty-eight years” (Annual Report Com, 2015). Dollar Tree’s Net sales for the second quarter of 2015 was $3.01 which is an increase from $2.03 billion in the year 2014 second quarter. Dollars Trees total liabilities and

What is Dollarama’s largest current asset? Elaborate on what this has to do with their operations.

JC Penney’s market share is currently at an all-time low. On December 8 of 2016, the company’s share’s market value was $10.56 and currently, the share’s market value is $2.66.

Dollar Tree is an American chain of discounted items in many varieties that sells for$1 or less. They are the largest single priced retailer. Dollar Tree carries items that are used as consumable, variety categories and seasonal. You can shop at any Dollar Tree and find items such as health and beauty care, household consumables, home decor, office and school supplies, party supplies, toys, floral supplies, kitchenware and cutlery, and seasonal merchandise, paper products and chemicals products, candy, food and frozen and refrigerated foods, and soft lines. Dollar Tree has everything you need for every day, every holiday, and every occasion. Dollar Tree is so large that they have a total of 4,992 stores in the 48 States and has 10 distribution centers across the US. There is probably a Dollar Tree right down the road from where you stay. Dollar Tree is very considerate of their customers. They want to make sure that when the customers come into the store to shop that they are having fun while doing so. They understand about placing their customers’ and shareholders needs and want first to better position themselves in the future and to keep ahead of their competitors. Dollar Tree has a strong market position because it is the largest single priced retailer that makes as strong as they are, and with the integration of the Family Dollars stores, Dollar Tree future is looking mighty bright. Dollar Tree wants to continue to improve in their sales year after year. After the

availability of substitutes 1, and the threat of retaliation from incumbents (by lowering price, for

A new venture takes creativity, motivation, spirt, and capital. The beginning of any venture begins with analyzing ones financial markets and how best to place the vested capital to continuously have the company grow. In many aspects one may purchase an already established business, in this case the understanding of how the loan process works is imperative. One may purchase a building and start a business from the ground up, in this case one will also need to have a great understanding of how mortgages and lending works as well. Many lenders will look into the financial market of the business before considering a loan of any type. In this case good solid numbers and record keeping is important. Understanding that a financial market is based on traders who buy and sell stocks, bonds, derivatives, foreign exchange and commodities (Amadeo, 2015). Successfully analyzing and investigating all financial resources is crucial.

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).

Dollar  Tree  Logis-cs  and   Distribu-on  Center  Decision   Dollar   Tree   •  Main  merchandises:   –  $1     –  Consumable  merchandise:  candy,  food,  health  and   beauty  care,  house  wares  (paper,  plas-cs,  chemicals)   –  Variety  merchandise:  toys,  durable  house  wares,   giCs,  party  goods,  gree-ng  cards   –  Seasonal  goods:  Easter  baskets,  summer  toys,  lawn   and  garden  equipments,  Halloween  and  Christmas   goods   40%  imports,  7%  closeout  items,  rest  domes-c  vendors   Dollar  Tree—Opera-ons  Competency   •  What  are  the  opera-onal  priori-es?   • 

“Our formula is simple: we’re a growth company focused on better solving the unmet needs of our customers—and we rely on our employees to solve those puzzles. Thanks for stopping."