Dollar General Bids for Family Dollar SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Dollar General Bids for Family Dollar
In spring 2015, Dollar General's CEO Rick Dreiling was looking ahead to retiring at year's end but worried about ensuring continued growth for the company he had built since 2008 into a market leader in the U.S. discount retail world. Dollar General operated over 11,500 stores in 40 states at the start of 2015, but had recently been rebuffed in a tender offer for its leading rival, Family Dollar. Though Dollar General had held talks with Family Dollar as early as 2013, Family Dollar shareholders chose to ignore Dollar General's more lucrative tender offer and the urging of several activist investors and sold their firm to the smaller Dollar Tree chain. Dreiling could not help but revisit some of the key decisions he and the rest of the board had made in their pursuit of Family Dollar. From a governance perspective, he was confident that the Dollar General board had fulfilled its duty to shareholders during the bidding process despite Family Dollar's decision to sell to Dollar Tree. From a strategic perspective, he wondered whether Family Dollar had been the right competitor to buy.
Authors :: Jonas Heese, Paula A. Price, Suraj Srinivasan, David Lane
Swot Analysis of "Dollar General Bids for Family Dollar" written by Jonas Heese, Paula A. Price, Suraj Srinivasan, David Lane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dollar Family facing as an external strategic factors. Some of the topics covered in Dollar General Bids for Family Dollar case study are - Strategic Management Strategies, Boards, Financial analysis, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Dollar General Bids for Family Dollar casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, wage bills are increasing, challanges to central banks by blockchain based private currencies, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels,
increasing energy prices, technology disruption, etc
Introduction to SWOT Analysis of Dollar General Bids for Family Dollar
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dollar General Bids for Family Dollar case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dollar Family, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dollar Family operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Dollar General Bids for Family Dollar can be done for the following purposes –
1. Strategic planning using facts provided in Dollar General Bids for Family Dollar case study
2. Improving business portfolio management of Dollar Family
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dollar Family
Strengths Dollar General Bids for Family Dollar | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dollar Family in Dollar General Bids for Family Dollar Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Dollar Family are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Dollar Family is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jonas Heese, Paula A. Price, Suraj Srinivasan, David Lane can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Dollar Family is present in almost all the verticals within the industry. This has provided firm in Dollar General Bids for Family Dollar case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Dollar Family in the sector have low bargaining power. Dollar General Bids for Family Dollar has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dollar Family to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Dollar Family is one of the leading recruiters in the industry. Managers in the Dollar General Bids for Family Dollar are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Dollar Family digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dollar Family has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Dollar Family has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Dollar General Bids for Family Dollar HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Dollar Family has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dollar Family has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Dollar Family has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Dollar Family is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Dollar Family is one of the most innovative firm in sector. Manager in Dollar General Bids for Family Dollar Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Dollar Family has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Dollar General Bids for Family Dollar Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Dollar General Bids for Family Dollar | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dollar General Bids for Family Dollar are -
Products dominated business model
– Even though Dollar Family has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Dollar General Bids for Family Dollar should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Dollar Family has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dollar General Bids for Family Dollar, it seems that the employees of Dollar Family don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Dollar General Bids for Family Dollar HBR case study mentions - Dollar Family takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Dollar Family has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dollar Family is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Dollar General Bids for Family Dollar can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Dollar Family has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study Dollar General Bids for Family Dollar that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Dollar General Bids for Family Dollar can leverage the sales team experience to cultivate customer relationships as Dollar Family is planning to shift buying processes online.
Interest costs
– Compare to the competition, Dollar Family has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Dollar Family supply chain. Even after few cautionary changes mentioned in the HBR case study - Dollar General Bids for Family Dollar, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dollar Family vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Dollar Family needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Dollar General Bids for Family Dollar | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Dollar General Bids for Family Dollar are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dollar Family can use these opportunities to build new business models that can help the communities that Dollar Family operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Dollar Family can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dollar General Bids for Family Dollar suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Dollar Family can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Dollar Family in the consumer business. Now Dollar Family can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Dollar Family to increase its market reach. Dollar Family will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dollar Family in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Dollar Family has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Dollar General Bids for Family Dollar - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dollar Family to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Dollar Family can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Dollar Family has opened avenues for new revenue streams for the organization in the industry. This can help Dollar Family to build a more holistic ecosystem as suggested in the Dollar General Bids for Family Dollar case study. Dollar Family can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dollar Family can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Dollar Family can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Dollar Family can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dollar Family is facing challenges because of the dominance of functional experts in the organization. Dollar General Bids for Family Dollar case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Dollar General Bids for Family Dollar External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dollar General Bids for Family Dollar are -
Regulatory challenges
– Dollar Family needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Technology acceleration in Forth Industrial Revolution
– Dollar Family has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Dollar Family needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Dollar Family
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Dollar Family.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Dollar Family can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– Dollar Family high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dollar Family with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dollar Family in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dollar Family can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Dollar General Bids for Family Dollar .
Environmental challenges
– Dollar Family needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Dollar Family can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Dollar Family in the Finance & Accounting sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Dollar Family business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Dollar Family demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Dollar General Bids for Family Dollar Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Dollar General Bids for Family Dollar needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Dollar General Bids for Family Dollar is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Dollar General Bids for Family Dollar is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Dollar General Bids for Family Dollar is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Dollar Family needs to make to build a sustainable competitive advantage.
