Dollar General Analysis
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Group B » Alfredo | Alejandra | Francisco | Gianpaolo | Henry | Johanna | Manuel
Dollar General
Agenda
I. DG’s value proposition & positioning
II. Strategy
III. Tactics
- Growth vectors: assessment- Where & how to grow- Marketing Mix: comparison- Feasibility analysis
- What about DGM’s target?- Specific actions for each component of the marketing mix: 4P’s
TacticsStrategyIntro
Value proposition & positioning
What does DG sell?
essential
“Basic everyday and household needs, supplemented with a variety of
general merchandise items, at every day low prices in conveniently
located, small-box stores“
TacticsStrategyIntro
Value proposition & positioning
To whom?
essential
Basic and proximity purchases (extreme-value retailer)
- Convenient locations
- Time-saving shopping experience
- Everyday low prices on quality merchandise.
- Served primarily low, middle, and fixed income families
- 86% of their customers are women
- U.S.: southern, southwestern, mid-western, and eastern states
How does DG accomplish its objective?
TacticsStrategyIntro
Growth vectors: assessment
Demography
Geography
Product
+
-
-
Fierce competition with
Wal-Mart or Target.
- Lack of relationship with local
suppliers (economies of scale);
- Customer’s purchasing behavior may
differ significantly from their existing
customer base.
- Increase the presence of the
brand in the market that has
shown loyalty to DG;
- Knowledge about your
customers in the area;
- Existing of strong distribution
corridors;
TacticsStrategyIntro
MARKET
OLD NEW
OLD Mkt. Penetration Market Development
NEW ProductDevelopment Diversification
PR
OD
UC
T
Where and how to grow?
Tool: Ansoff matrix
TacticsStrategyIntro
Market share
% of consumers in area of influence
% of expenditure within the category
Annual expenditure
when compared to total mkt. avg
Frequency
Avg. expenditure= x x x
Assortment Price
Convenience
Location
Dollar General Dollar General Market
Wal-Mart
Marketing Mix: comparison
Wal-Mart Neighborhood Market
Assortment Price
Convenience
Location
TacticsStrategyIntro
Feasibility analysis
Assumptions
Results & Analysis
- No DG Markets opened in 2006 (53 out of 8200 stores)
- Target growth potential through new store opening of 9,8% (2007)
- Same-store sales growth remains constant (2,2%)
- New stores to be opened in 2.007 was set in 4% (2006)
- Sales per year per DG Market growth linearly with the variation in surface
- Estimated opening stores to achieve sales target growth: 201 DG Market
- Expansion capability (maximum ever seen in 2005): 279 DG Market
- Estimated new SKUs 16,800
- Minimum required population 25,100 people
TacticsStrategyIntro
Strategy
How to achieve it: tactics
What about Dollar General Markets’ target?
TacticsIntro
Product
- Assortment:
a) Increase number of SKUs (approx. 16,800)
b) Strong focus on high-consumables or groceries
c) Increase in the percentage of private labels as part of their assortment
- Workforce:
a) Training (groceries & perishable products)
b) Additional 4 store clerks will be needed for the DG Markets
How to achieve it: tactics
Promotion
Strategy TacticsIntro
- Strong effort to communicate to their customer base that DG Market
stands for the same principles and values as DG stores.
Place
- Avoid cannibalization -> target slightly bigger communities (25,100)
- Areas where low-potential stores were closed -> new format, new opportunities
- Other factors (leasing, truck access, friendly parking lot)
Price
- Extend DG s policy of keeping “simple” their tag prices
- Maintain their offering of “everyday low-prices”
Alfredo | Alejandra | Francisco | Gianpaolo | Henry | Johanna | Manuel
Thank you for your time…
Group B did a masterpiece today… well done!
Roberto Manzano A.
валхи славян азбукин (алфавичĕн)
тепĕр тĕсĕ. Хальхи вырăс çырулăхăн
алфапвитне кириллица çине таянса
тунă. Вырăс алфавичĕнчи
саспаллисене чăваш çырулăхне кĕртнĕ.
Алфавит ятне славянсен IX ĕмĕрти
паллă просветителĕ Константин
(Кирилл) философ ячĕпе каланă.
Annex. Feasibility Analysis
0,00%
5,00%
10,00%
15,00%
Sales due to growth
Stores 8229.00
Stotal sales 9169822.00
Avg sales per store 1114.33
Openings
2003 6700
2004 7320
2005 7929
2006 8229
2007 (forecast) 8558
Surface Var. in surface Avg. Sales
DG surface 6900 1114.3
DG MARKET surface 17000 246% 2745.5
Actual expansion Annual increase
capacity (max) 41201000
2002 45354000 4153000
2003 50015000 4661000
2004 54753000 4738000
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