Dollar General Strategy

Date: 11/1/2010
To: David Perdue, Chairman and CEO
Re: Growth Opportunities in the West

Executive Summary
Dollar General is at an inflection point. We have learned a great deal of lessons from our past, but now we look to the future to see what it holds. This memo takes a closer look at our industry and our current operations to examine what we need to change, or keep the same, to expand our presence in the extreme-value retail sector. A SWOT and Porter’s Five Forces analyses aid in getting that closer look, and our growth options are examined for their viability.

Dollar General (DG), and the dollar store industry in general, has made significant progress in the United States over the last decade, and we now face the challenge of building on this success in order to stay relevant and profitable. By 2007, we had become the sixth-largest mass retailer in the U.S. with average annual revenue growth of 9% from 2002 to 2006. Our sales and profit growth made us one of only three companies to outperform Wal-Mart in these areas. This accelerated growth has also highlighted some aspects of our operations that need improvement in order for us to remain profitable and continue growing into the future.
“To Serve Others: provide customers a better life, shareholders a chance for superior return, and employees respect and opportunity.”
This mission is what DG’s strategy is built around, and it drives every facet of our operations. Our strategy of providing customers with “a focused assortment of fairly priced, consumable merchandise in a convenient, small-store format” is built around the mission of serving others, and this is what sets us apart from our competition. By taking a closer look at our industry, and ourselves, we can better see what opportunities we have for growth.
SWOT Analysis

I have performed a SWOT analysis to examine our Strengths, Weaknesses, Opportunities, and Threats at the current time. I have identified the internal and external...