How has Dollar built its cost advantage?
Dollar General operated discount stores that offered a focused variety of basic consumable merchandise. Dollar General emphasized prices around $10 or less, and approximately 30% of the products priced at $1. They targeted low-income, middle class and fixed income families. In addition, they choose the perfect locations to match their target audience. Their strategy mostly came from five and dime concept with the mission of keeping it family-oriented culture.
Should Dollar compete directly against Wal-Mart?
Dollar General should compete against Wal-Mart because of the fact that many people think that Wal-Mart is the only discount super-store out there. In one hand, Dollar General has sometime lower prices with brand names products; they focused on even-dollar prices and the fact that sometime customers at Dollar General Store pick up much stuff at a really cheap price. As we know customers spend longer time at Wal-Mart due to how big and crowded the place is. I believe they should compete in terms of basic consumables. In some areas, people do not want to drive 20 or more miles to go to Wal-Mart, and then spend 45 minutes to shop. The location of Dollar General is more convenient most of the time than Wal-Mart. Another point mentioned that Dollar general could open stores in small areas that are not suitable for Wal-Mart to enter. In conclusion regards this question, Wal-Mart competes in selection and price; however, Dollar General competes in price and convenience.
What recommendations would you provide to Dollar regarding its strategic alternatives?
- Dollar General should pay more attention to their existing store by doing some renovations, layout format is outdated.
- Dollar General could introduce loyalty-card to attract existing customers with some offers, promotion and points to earn.
- While economic downturn affecting the U.S., they should focus more on even-dollar prices and that’s why...