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Running Head: DOLLAR GENERAL CORPORATION

Dollar General Corporation


Name
Institution

DOLLAR GENERAL CORPORATION

In order to enhance it business operations, Dollar General Corporation announced its


expansion plan in 2011. The plan involved the opening of about 625 stores, employ 6000
workers, and open stores in three extra countries. The plan will involve relocating 550 of it 9200
stores in approximately 35 countries. The expansion is intended to enhance the growth and
development of the business as well as to be competitive in the market. The primary competitors
of the company were Family dollar store with revenues of US$ 8.04 billion, and Dollar Tree with
revenues of US$ 5.71 Billion. Compared to the two organizations, Dollar General was in the first
place with US$ 12.73. The main competitor was Wal-Mart with revenue of US$ 419.24 billion.
This is because Wal-Mart operated approximately 3500 stores and supercenters compared to the
three industries.
The main success of Wal-Mart is that it had stores oversees in a number of states. This
included the largest no-U.S. markets consisting of approximately 371 stores in the United
Kingdom and other 297 stores in China. The plan intends to make Dollar General the best
organization with a target of higher revenues that Wal-Mart. In the year 2010, the KKR
(Koldberg Kravis Roberts & Co. L.P.) owned 79.17% shares of the organizations stock on
September 30th, 2010. KKR had previously acquired US$16.78 billion for a stock. When the
Dollar General store was established in Springfield in the 1995, the concept was very simple. No
single Item in the store would cost more than one dollar. This where the idea became a huge
success when they were converted by the year 1957. Through hard work and friendly customer
service, the company would become a leading discount retailer (Wheelen, & Hunger, 2010).
The discounter noticed it would have created approximately 15,000 new jobs from the
year 2009 through 2011. The company announced that it had plans to remodel or relocate 550
existing stores in the year 2011. It is clear that the new stores will bring the organizations total

DOLLAR GENERAL CORPORATION

locations from 9,000 to 9,825. This will be achieved through selling products like General Mills,
PepsiCo, and Gamble. Dollar General intends to lure a new type of client those with huge
incomes. However, those with fixed incomes will still be their main clients. In general, the firstdeveloping retailer is making a play for what is known as trade-down shoppers reports. Based on
investors.com, trade-down shoppers are the once who make a standard wage of $ 75,000
annually and head to Dollar for the Consumables. This is the fastest growing/developing
consumer group for the organization (Wheelen, & Hunger, 2010).
Based on research, it is clear that Dollar General had not encouraged difficulty finding
suitable store sites over the past years. Having the size of the community it was targeting, the
company believes that there was sufficient change for new store development in new and
existing markets. In addition, the rates sites where better than the previous years. The real estate
is another factor that was providing Dollar General in development of existing markets. The real
estate was providing the company with new chances to gain new quality sites at lower rates than
in the past. Dollar General knew that it had opportunities of relocation and remodel programs.
The remodeled stores required approximately US$65,000 for equipments and fixtures while the
cost of relocation amounted US$ 110,000 for only equipments, fixtures, and additional inventory
(Wheelen, & Hunger, 2010).
The figure below illustrates Dollar Generals four major groups of merchandise

Consumables
Seasonal
Home products
Apparel

2009
70.8%
14.5%
7.4%
7.3%

2008
69.2%
14.6%
8.2%
7.9%

2007
66.5%
15.9%
9.2%
8.4%

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES


Condensed Consolidated Balance Sheets
(In thousands)
DOLLAR GENERAL CORPORATION
(Unaudited)
October 29,
October 30,
2010
2009
ASSETS
Current assets:
Cash and cash equivalents
Merchandise inventories

Income taxes receivable


Prepaid expenses and other
current assets
Total current assets
Net property and equipment
Goodwill
Intangible assets, net
Other assets, net
Total assets
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term
obligations
Accounts payable
Accrued expenses and other
Income taxes payable
Deferred income taxes
Total current liabilities
Long-term obligations
Deferred income taxes
Other liabilities
Total liabilities

237,906
1,885,75
3
27,677
121,422
2,272,75
8
1,414,70
0
4,338,58
9
1,262,83
4
60,693
9,349,57
4

1,358

337,019
1,680,27
3
31,268
68,754
2,117,31
4
1,305,85
8
4,338,58
9
1,293,28
0
77,491
9,132,53
2

26,762

January 29,
2010
$

222,076
1,519,57
8
7,543
96,252
1,845,44
9
1,328,38
6
4,338,58
9
1,284,28
3
66,812
8,863,51
9

3,671

971,538
378,750
14,068
44,601
1,410,31
5
3,286,90
7
565,510
254,669
5,517,40
1

852,988
381,346
3,659
46,178
1,310,93
3
4,105,25
2
547,180
298,622
6,261,98
7

830,953
342,290
4,525
25,061
1,206,50
0
3,399,71
5
546,172
302,348
5,454,73
5

14,783

15,131

18,486

298,459
2,937,30
0

278,202
2,497,93
9

298,013
2,923,37
7

Commitments and
contingencies
Redeemable common stock
Shareholders' equity:
Preferred stock
Common stock
Additional paid-in capital

DOLLAR GENERAL CORPORATION

The figure above shows consolidated balance sheet and consolidated statements of
income for Dollar General in the year 2010. The management noticed that the company has
substantial debt.
As the fast-growing retailer, Dollar General commands a chain of 10,000 discount stores
in about 40 Countries, mainly in the southern and eastern America, the Midwest, and the
Southwest. In the year 2011, Dollar General entered three new states, its first since 2006 and
made considerable progress (Wheelen, & Hunger, 2010).
The company offered mostly basic family products, such as cleaning supplies and health
and magnificence aids, it also peddles regular items, attire, and food. The Company typically
targets low, middle, and fixed-income shoppers. The company's no-frills stores are situated in
small urban/cities that are off the radar of massive discounters such as Wal-Mart. Part of its plan
illustrates that some 25% of its products is priced at $1 or less in order to attract clients
(Wheelen, 2011).

DOLLAR GENERAL CORPORATION

6
References

Wheelen, E., K., (2011). Dollar General Corporation: 2011 Growth Expansion Plans. Print.
Retrieved from
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Wheelen, T. L., & Hunger, J. D. (2010). Strategic management and business policy: Achieving
sustainability. Upper Saddle River, N.J: Prentice Hall.