Strategic Management Project

1. Strategic Management MBA Final Project Dec. 2021
Section 2 – Room 1
Insights overview for 2011
expansion plans
Supervised by
Dr. Tamer Karam

2. Content
Dollar General expansion plans in 2011
By: Mr. Saber Samir Elsayed Stud #: 22211035317
Market and Industry situation in 2011
By: Ms. Eman Mosaad Abdelkader Stud #: 22211039008
Internal analysis and company overview
By: Mr. Ramy Mohamed Abdelhamid Stud #: 22211039011
SWOT analysis for their current situation
By: Mr. Ahmed Adel Kassem Stud #: 22211037055
What kind of strategy to apply?!
By Dr. Heba Fawzy Moawad Stud #: 22211035351
Suggested strategies in moving forward
By Dr. Wael Ahmed Marwan Stud #: 22211038086

3. INTRODUCTION
• Dollar General Corp. (DG) is a is
a discount retailer of U.S. chain of variety
stores headquartered in Goodlettsville,
Tennessee
• Corporate Ownership
• DG locations policy

4. Why DG need expansion plan?
They hoped by implementation of that plan they can:-
• Increasing their market share.
• Advantage when economy improves.
• Only 41% of the population in their trade area,
Remaining 59% represents opportunity to grow
customer base.
• Overcome their dilemma.
On Jan 6, 2011 - they attended to make
Expansion plan as following:-
• Open 625 stores
• Add 6000 employees
• Open additional stores in states (Connecticut,
Nevada, New Hampshire and Colorado)
• Relocate and remodel 550 of its 9200 stores in
35 states
With knowing that
From 2009 through 2011, the company will have
created more than 15,000 new jobs.
The company has 79800 employees, store average
6 to 10 employee

5. The Dilemma
• Management recognize that the company need to grow
farther through implementing expansion plan in order
to increase the profit.
• This debt could have important negative consequences to
the business
Management position on the impact of debt on the
company was stated as below:
• Ability to make payments on our outstanding debt.
• Vulnerability to general economic and industry conditions
• Additional financing.
• Competitors who are less highly leveraged.

6. General environmental analysis
ECONOMIC
• Inflation rate
• Interest rates
• Unemployment rates
• Growth rates
• Taxes rates
LEGAL • Market wages rates
SOCIAL • Store accessibility
PESTEL analysis 5 Porters’ analysis

7. Industry analysis
Dollar discount stores usually focus on 4
merchandise categories.
Above figure shows the revenue shares for 3 major
companies in the industry showing that Dollar
General is the largest company.
15%
22%
35%
28%
DOLLAR DISCOUNT STORE
INDUSTRIES TOTAL REVENUES
Dollar Tree
Family Dollar
Stores
Dollar General
Other discount
stores
Discount variety stores market focus on wider variety of products,
major prime player is Wal-Mart then comes Target.
In order to measure the size of Dollar general in market, we need to
compare the profit margin of each company.
despite the huge gap in profit, Dollar general is achieving higher profit
margin than Wal-Mart.
3.90%
4.50%
6.50%
3.60%
4.20%
0.00% 2.00% 4.00% 6.00% 8.00%
DOLLAR GENERAL
FAMILY DOLLAR STORES
DOLLAR TREE
WAL-MART
TARGET
PROFIT MARGIN COMPARISON PROFIT MARGIN
Profit margin shows company’s ability to achieve
profit and ability to control its costs.

8. Dollar
General
Family Dollar
Stores
Dollar Tree
# of Stores 9273 6852 4009
# of Employees 79800 50000 54480
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
3 Major players in the Dollar discount
stores industry
Wal-Mart Target
# of Stores 8416 1746
# of Employees
(1000)s
2100 351
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2 Main players in the Discount variety
stores industry
Number of branches, Dollar general was dominant with 9273 stores while Wal-Mart had 8416 stores.
Wal-Mart has the largest workforce with 2,100,000 employee “approximately 26 times more
employees than Dollar General”, this is because Wal-Mart have much bigger stores which needs
much more employees to run this branches.

9. Consumer preferences
Dollar market share has increased from 1.5% to 1.8%

10.  Total sales increased 13.6% over 2010. Sales in same-stores increased 6.0% following a 4.9% increase in 2010.
 Operating profit increased 17.0% to $1.49 billion, or 10.1% of sales, compared to $1.27 billion, or 9.8% of sales, in 2010.
 We reported net income of $767 million, or $2.22 per diluted share, compared to net income of $628 million, or $1.82 per diluted
share, in 2010
 We generated approximately $1.05 billion of cash flows from operating activities, an increase of over 27% compared to 2010.

11. Internal analysis
Corporate Social Responsibility
(CSR)- In 2009, Dollar General
and the Dollar General
Literacy Foundation donated
more than $29 million through
grant programs and
fundraising initiatives to more
than 1,900 charitable
organizations.
Marketing
Dollar General Market stores are a
fresh way to save everyday! We
took our Dollar General stores and
expanded their selection, their
goal is a simple one: we carry
items you need at prices you'll
appreciate, without sacrificing
freshness or quality.
Strategic Issues
Main strategic issue is How to
develop teams deliver
sustainable competitive
advantages for clients, through
long-term vision and immediate
actionable tactics.
Finance
Dollar General aims to lure a
new kind of customer— those
with higher incomes. While
those on fixed-incomes are still
its core customers,

12. Dollar stores improved their customer
experience
2005 2012
• Narrow, cluttered, and difficult to-navigate aisles • Wide, less cluttered, and cleaner aisles
• Limited lighting inside stores
• Small in-store signage for product categories
• Bright and vibrant lighting inside stores
• Large and clear in-store signage for product categories
• Cluttered check out
• Limited personal attention to customers
• Wide and convenient check out
• More personal attention to customers
• Limited assortment of SKUs including secondary
brands and lower-quality store brands
• Wider assortment of SKUs including national brands and
improved store brands
• More product categories, including refrigerated/frozen

13. CPM Analysis
Dollar General Family dollar general Dollar Tree
Critical Success Factor Weight Rating Score Rating Score Rating Score
Brand reputation 0.11 3 0.33 2 0.22 3 0.33
Range of products 0.18 4 0.72 3 0.54 3 0.54
Sales per employee 0.04 2 0.08 3 0.12 4 0.16
Low-cost structure 0.09 4 0.36 3 0.27 2 0.18
Advertising 0.01 1 0.01 1 0.01 1 0.01
Market penetration 0.1 4 0.4 3 0.3 2 0.2
Store locations 0.13 3 0.39 2 0.26 1 0.13
Product &service
quality
0.09 2 0.18 2 0.18 2 0.18
Market share 0.17 4 0.68 3 0.51 1 0.17
Price competitive 0.08 4 0.32 2 0.16 2 0.16
Total 1 3.47 2.57 2.06

14. EFE Analysis
Critical success factor Weight Rating Score
Opportunities  New Trade agreement (New market)
 New Supplier
 Increased demand for products
 Decreased tax rate
0.09
0.25
0.08
0.1
2
3
3
4
0.18
0.75
0.24
0.4
1.57
Threats
 Customer Behavior (online shopping)
 Natural disaster (Covid 19)
 New law / regulation
 New competitors
0.19
0.17
0.07
0.05
4
3
2
3
0.76
0.51
0.14
0.15
1.56
Total 1

15. weakness
Rely on frozen
foods
Global
penetration
Dollar General is not very
good at demand forecasting.
Strengths
Reliable suppliers
Diversity of places
and number of
branches.
Market
share
Diversified product
Portfolio
Strong Distribution
Network.
Cost Control

16. Threats
Effect of covid-
19.
Lack of Long Term
Contracts With
Suppliers.
•High competition in the
American market.
Changing consumer buying
behavior from online
channel.
Opportunities
Encouraging countries
to invest.
Online Retail
Market in US (DG GO)
•Recession in most
•countries of the world.
Economic growth in
America is expected to
accelerate this year by
5.6%.

17. Alternative strategy for dollar general
Deep market penetration
(intensive growth strategy)
• Retail renaissance
• Convenient locations (To
attract more and more
customers).
• Mobile apps and faster
checkout.
(Competitive strategy)
• Cheaper goods+ competitive prices
• Keeps operating cost low (low wages
,rent stores)
• Simple selling strategy (Every single
item in every store cost 1 dollar)
• Owning the fleet ( to immunize it-
self against third party costs and
greater control on supply chains).
• Getting in on the private label game.
• Horizontal integration
increase points of sale
(Increase market share ,more
market controlling).
• Market development
Introduce exist products to
customers in new geographic
areas.
Cost leadership strategy Growth strategy

18. Way forward strategies
1st strategy: Expansion throw opening new branch in stats not have
any store like stores?
These States and Territories do not have any Dollar General locations -
Hawaii, Alaska, District of Columbia, American Samoa, Guam, Montana,
U.S. Virgin Islands, Northern Mariana Islands, Idaho and Puerto
Objective KPI Action Responsibility Due date Progress
Open 1000 branch
in 1o newly stats
during first 6month
in 2022
Number of
store open
monthly from
1000
Finance availability Financial manger 2/2022 /100 %
Store location Growth and real stats
department
2022 /100 %
Employee HR. 6/22 /100 %
Training employee Marketing department 7/22 /100 %
Preparation store Project manger 4/22 /100 %
Product availability Purchasing manger 5/22 /100 %
Products delivery Operation manger 5/22 /100 %

19. Way forward strategies
2nd strategy: Open 10 branch in Mexico throw 2022
Objective KPI Action Responsibility Due date Progress
Open 10 branch
in mexico stats
during first
6month in 2022
Number of
store open
monthly from
1000
Finance availability Financial manger 2/2022 /100 %
Store location Growth and real stats
department
2022 /100 %
Employee Hr. 6/22 /100 %
Training employee Marketing department 7/22 /100 %
Preparation store Project manger 4/22 /100 %
Product availability Purchasing manger 5/22 /100 %
Products delivery Operation manger 5/22 /100 %

20. Way forward strategies
3rd strategy: Market development and joint venture by expansion
and invest in healthy and drug products like cough and cold,
dental nutritional medical health ids. feminine hygiene products.
4th strategy: Cost leadership strategy
Cost leadership
strategy
Increase profit margin
Increase sales
cash flow
1 Rent store private label product more store
2 Small size store
increase national
famous products
easy shopping journey
10 min
3 Decrease labor
purchasing power
10000 products
cost effectiveness vs
competitors
4
Cuts cost supply
chain
more offers and sales
5 Ruler area store
invest in new items
drugs ,cosmetics
6 Decrease wastes

21. Conclusions
 Our Decision
• Due to their Current Financial Condition , future expectations
(6.8%) and Recent proposed Developments strategies :-
 Continue their Growth strategy by Horizontal integration
 International expansion
 Market Development.
 Joint venture to make expansion into Health care with Walgreens
 Expansion on their Digital Growth (DG GO!) Scan and-go
 Covid-19 Impact
 In short term
 Assets 6.18 B Lib. 5.74B
 In long Term
 Assets 19.74 B Lib.14 B