Dollar General Case Study

Q1: Describe Dollar General’s business strategy. What has the company been so successful?

A1: Dollar General’s main business strategy is to focus on being the leading distributors of consumable basics, with 30% of the merchandise at $1.00 or less. Dollar General believes in maintaining an assortment of consumable merchandise and making shopping for everyday items hassle free and simplistic.

Deriving most of their customer basis from Low, Middle and fixed income earners. With under-serviced rural and urban neighbourhoods being the bench mark of their locations.

The company’s success can only be derived from its current ability to keep costs to a low, employing minimum staff to operate each store as one point. Another would be stock in general; keeping it at a low price enables more of the item to be sold. Finally Dollar Generals policy’s on getting a store ready and opened in 8 days or less. This in term would also generate enough hype and attention to a new stores opening without the means of expensive advertisement.

Dollar General keep their stock range fairly basic, only having important consumables, clothing some food items and seasonal and promotional products, this enables them to keep prices of items low with the maximum price of an item found in a Dollar General store being $35.00

The only real Information systems used in each Dollar General store is their satellite link up (space net) and the POS (point of sale) software Triverstiy which enables headquarters with the day’s sales information.

Stock control is simply done by presuming certain amount of stock is being delivered which of course has a down side as well.

In summery Dollar Generals success rate can purely be based on its Target market, keeping products and pricing in check with this target market and also their store locations. Their policies on a fast turn around when opening a new store, and lastly its ability to keep overhead costs to a minimum.

Q2: Describe the role of management, organization, and technology in Dollar General’s business strategy.

A2: Managements role in Dollar General is to successfully maintain low costs and high profits and to enable consistent customer satisfaction.

Dollar general have a certain chain of management starting at the top in the headquarters department located in Goodlettsville Tennessee.

When a new store is about to be opened Management in headquarters appoints store merchandiser’s (setters) who’s key roles are to coordinate the store opening process by managing the staff, installing the IBM point of sale terminals, building shelves and stocking them with products. They are also there to test the software and link up connections with headquarters. They are also used to close or reorganize a store if need be.

Once this process is finished it is then up to the store manager to maintain general control. They must then oversee stock when it arrives, handle communications with headquarters and they must use a paper and clipboard system to track employee contact information, cash deposit logs and the arrival of goods.

Organization is a key role in Dollar Generals operations they have set guidelines on how stock must be placed on shelves and how set ups must be controlled. This way management is more easily able to keep an eye on stock and general running of the store with out the use of information systems.

However there are many areas where organization could do with being reviewed. Especially in the sense of incoming and outgoing stock!

Technology is very thin within the Dollar General corporation they use a very advanced system in Spacenet and Triversity allowing headquarters to receive daily sale information and payroll information. However they lack basic technology in many other areas such as their stock control. Currently Dollar General do not have a system in place for scanning items that arrive into stock, they also have no formal way of checking the items being delivered, are being delivered correctly. The other fundamentals Dollar General have chosen not to utilise is the use of email communications. Instead using phone, voice mail and fax for all communications. This seems like a slightly more expensive method as your paying for phone calls and faxes. Email would also allow a much faster response time and the ability for headquarters to know for sure that a message has been received (with email read receipts)

Q3: How well do information systems support Dollar General’s business strategy? Explain your answer

A3: The set up of information