Dollar General - Todays Neighborhood Store - Case Study Example

Case study: Dollar General Dollar General operates in a dynamic political, legal, social, economic, and technological environment. In this respect, the retail chain faces many and different forces in the business setting. Political or legal forces constitute a critical factor in the success of any given business enterprise. In its operations, Dollar General adheres to government rules, regulation, and terms of conducting business. These political or legal requirements seek to promote consumer welfare as the enterprise conducts its operations. Applicable government policies require the retail chain to acquire relevant licenses of operation and execute its business subject to the laws of competition. Competition in the retail industry denotes compliance with antitrust laws. The Dollar General case notes the presence of other players such as Family Dollar and Dollar Tree in the market. Relevant legal provisions promote fairness in business, an aspect that would control Dollar General from becoming a monopoly in the United States amid its growth and expansion from time to time. Another important political or legal force is corporate social responsibility. Over and above providing discounted products to the retail market, Dollar General is not immune to corporate social responsibility practices. In essence, the discount retailer operates on the notion of improving people’s quality of life, especially the middle and lower income individuals. In addition, this company has a responsibility towards its workforce. This is evident through the fact that it has had several lawsuits to deal with in regards to employment disputes. Such lawsuits show that the company has a legal responsibility to employees, customers, or the society in general. Away from the political or legal factors, social forces are also influential as far as Dollar General is concerned. This discount retailer operates in an environment where social stratification is evident. Different people have different purchasing powers. On the same note, income levels vary from one individual to another. These factors are critical to account for as far as Dollar General’s business is concerned. The idea is that different consumer segments need differentiated modes of approach. The social force dictates that Dollar General has to stock what consumers either want or need. This is because consumer tastes, preferences, and interests vary from one person to another. In light of this observation, Dollar General offers different categories of products, among them: consumables, apparel, seasonal products, and home products (Hitt, Duane, and Robert 192). The social divide across these products force Dollar General to target dynamic consumer segments within and across available markets. In addition, the business model adopted by Dollar General cannot be exploitative to either workers or customers. Dollar General markets its business on the principle of discount. For this reason, Dollar General cannot afford to charge prices that are seemingly higher than competitor retailers’ prices. On the same, there is a social need to promote the general welfare of the society based on the platform Dollar General bases its retail business. Presence of Family Dollar and Dollar Tree in the market supports this notion. The major economic force Dollar General faces is competition. Entry of new players such as Family Dollar and Dollar Tree means that competition must intensify. On the same note, price setting becomes critical to consider. With numerous players and the need to compete on price basis, the economic factor becomes stiff for the company. Developments in revenue, sales, profits, and number of stores opened show that economic conditions are increasingly becoming critical to the future of the firm. Closure of some stores between 2007 and 2009 and subsequent opening of others show that the performance of the American economy is influential to Dollar General’s business. In particular, recession, inflation, price levels, income, interest rates, and share value are directly linked to Dollar Stores’ economic progress (Mandel 144). Technologically, Dollar General faces a number of influential forces. To start with, the company faces the need to adopt new and improved technologies that aid in sales, marketing, advertising, hiring, product supply, distribution products, and collection of customer feedback. In essence, the company faces the technological force of revolutionizing its business operation practices. These technologies essentially enhance operational effectiveness and efficiency. In other words, there is industry-wide drive to install technologies that favor retail business. Most importantly, Dollar General is one of the many players in securities exchange in America. Even though it has been on and off the securities market, today’s technology is vital in the context of Dollar General’s business. The technological force is to only manage its business successfully, but also enhance how the business interacts, relates, and communicates with customers (Parnell 134). Operations and communications technologies, therefore, are a key factor in Dollar General’s long-term business. Critical success factors are vital in Dollar General’s discount retail business. As earlier mentioned, the industry Dollar General operates in is diverse and dynamic. For this reason, it is critical to capture customer loyalty. Customer loyalty ensures that customers will go back to Dollar General Stores as opposed to conveniently turning their attention to competitors. Secondly, Krafft and Murali (277) maintain that dollar stores have to understand consumer behavior in order to be successful. How and why customers choose one product over another is important to understand. The idea is to have the dollar store ready for changing consumer behaviors when it comes to buying. Additionally, success in the dollar store industry requires players to understand when to switch old and new products. As seen in the case, the outlined four categories of products encompassed seasonal products. It is important for the dollar store to know when to bring in new products to replace the old ones. Failure to do this could cripple the entire business in an environment where consumer needs, tastes, and preferences are dynamic. In the social responsibility context, brand management and business positioning are important practices (Parnell 260). To achieve this, the retailer undertakes progressive product development, streamlined distribution, and engagement in fair advertising, marketing, and competition. Most importantly, avoiding the occurrence of price wars between players in the industry promotes Dollar General’s social responsibility. In essence, Dollar General positions its business at the core of consumer interests and loyalty, thus fulfilling its social mandate. In conclusion, it is evident that Dollar General plays an important role in the lives of many Americans. Amid operational and economic huddles, Dollar General has successfully offered consumers discounted products. At a personal level, the scope of its operations was unimaginable. Most importantly, it was interesting to learn that Dollar General highly competes with Family Dollar and Dollar Tree. This case is informative and relevant to contemporary developments in the retail industry. Works Cited Hitt, Michael, Duane Ireland, and Robert Hoskisson. Strategic Management: Concepts and Cases. New York: Cengage Learning, 2006. Print. Krafft, Manfred, and Murali Mantrala. Retailing in the 21st Century: Current and Future Trends. New York: Springer Science & Business Media, 2009. Print. Mandel, Mark. Small Investor Playbook. Bloomington: Author House, 2013. Print. Parnell, John. Strategic Management Theory and Practice, 4th Edition. Thousand Oaks: SAGE Publications, Inc., 2014. Print. Read More