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Save Time, Save Money, Everyday!

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by

Sarah Corum

on 3 December 2013

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Transcript of Save Time, Save Money, Everyday!

Save Time, Save Money, Everyday!
Dollar General de Mexico

Agenda
Focus on a strategy for Dollar General to enter the Mexico market.
What They Stand For
Company Analysis
SWOT
A summary of Dollar General's company, its customers and competition as well as the current Mexican market
A list of alternative strategies while also listing the primary strategy for Dollar Generals entrance
Our strategy will include the introduction of the Dollar General brand into the Mexican market
This will include price leadership and value perception, offering high quality well known brands, placing stores in accessible highly populated locations
Save Time, Save Money, Every Day!

This slogan represents what Dollar General wants its customers to understand about their model
They don't carry every brand and size, just the most popular ones
Each Dollar General carries about 10,000 to 12,000 different SKU’s
Dollar General was able to accomplish sales of over 14.8 billion in 2012
Dollar General is a company that embraces substance and simplicity.
Dollar General builds and runs convenient sized stores. They have successfully done this for many years.
Dollar General in Mexico will provide an ideal foundation of basic work skills along with competitive wages and benefits
A hallmark of Dollar General’s culture is celebrating excellence whether you work in a store, distribution center, or at the store support center
The price and convenience of Dollar General make it more attractive to consumers.
Dollar General has both strengths
and weaknesses.
Dollar General has a very large product mix.
Dollar General also has an advantage when the economy worsens
Weakness
Strengths
The operating cost structure of Dollar General is increasing and in-store execution is very inconsistent.
Since the prices are so low on products, the quality is not as good as it would be at a more expensive store.
Finally, Dollar General entered the online channel later than most retailers so they are behind
Mexico's Economy
Mexico’s population is about 115.6 Million
Of the 115.6 million citizens of Mexico; 50.7 million of those people are actively engaged in the economy.
Mexico is considered to have a very young population as well
78% of the Mexican population lives in urban areas, which could suit Dollar General well
The country of Mexico is in the high income stage of market development as its Gross national income is over $11,456 at $15,100
Competitor Analysis
Wal-Mart stores are growing in Mexico and one of Dollar General’s biggest competitors in the Mexican market
Dollar Generals advantage is their square footage compared to that of a Wal-Mart Superstore.
Another big competitor of Dollar General is Waldos’ dolar mart de Mexico
Wal-Mart’s disadvantage in Mexico is that they have such large stores and prices points are higher
Which gives us Waldos main advantage, their items are all priced to target the lower classes of Mexico
Alternatives
Whether or not an entrance in the global marketplace should first be entered from an online perspective
Would Dollar General be best served providing an on line experience prior to entering the brick and mortar environment of the country of Mexico.
Our Decision
We felt with this information that the best alternative for Dollar General would be to enter the market as a brick and mortar location to start
Dollar General has been mostly successful due to its ability to place a location virtually anywhere;
Our Reasoning
Our thought was that it could be possible to rent out space within mall’s or strip malls
We decided against this alternative as it is not what Dollar General is known for and it would undermine the culture and identity of the brand
Dollar General’s test should include a tourist location as well as a more traditional Mexican city
Our Strategy
"Rich people love low prices, poor people need low prices."
This seems to be the best pricing strategy for Dollar General to enter Mexico
It fits really well with the current culture and identity of Dollar General in the United States and it is something they already do really well
Dollar Generals strategy should be to mimic the success of the American dollar store by placing locations near where people already are
In Conclusion
Getting customers to our new Dollar General store in Mexico will require promotion and advertising.
Promotional programs such as buy one, get one free or half off
Dollar General should be able to grow and replicate the success that it has had in the United States
A replication of the US model will allow Dollar General to build a core of stores within Mexico city to start and eventually build a large group of stores within Mexico.
Full transcript