In a narrative format, discuss the company from a strategic perspective.

Information
concerning recent changes in the firm is readily available online and should be accessed.
Strategic issues should be discussed in "real time."
Dollar Tree was founded in 1982 by Douglas Perry, Macon Brock and Ray Compton as an offshoot retail chain K&K Toys. Dollar Tree is headquartered in Chesapeake, Virginia and operates
4,900 stores throughout the 48 contiguous U.S. states and Canada.
Dollar made following acquisitions to grow:
In 1993, Part equity interest was sold to SKM partners, a private equity firm. The name of the
company (Only $1.00) was changed to Dollar Tree Stores to address what could be a multi-pricepoint strategy in the future.
In 1995, Company acquired Chicago based firm Dollar Bills and went public on NASDAQ
exchange in March at $15 a share.
On December 10 1998, the Company acquired 98-Cent Clearance Centers located in California.
In 2000, Dollar Tree acquired Dollar Express, a Philadelphia-based company, and also opened a
new Distribution Center in Stockton, California.
In 2003, Dollar Tree acquired Greenbacks, Inc., in Salt Lake City, Utah, and opened a new
Distribution Center in Marietta, Oklahoma.
In 2011, Dollar Tree achieved sales of $6.63 billion, opening 278 new stores, and completing a
400,000 square-foot expansion of its Distribution Center in Savannah, Georgia.

Source: http://www.dollartree.com/custserv/custserv.jsp?
pageName=History&parentName=About
Strategic issues with Dollar Tree:
The margin is very low and turnover is also very low.
Dollar Tree competes in low-end retail markets with the national chains Family Dollar, Big Lots
and Dollar General.
Also, Dollar Tree competes with other local retail chains such as 99 Cents Only Stores, Fred's
and many independent dollar stores nationwide.
1. How would you categorize Dollar Tree along Miles' and Snow's strategy typology? Provide
extensive support for your answer.
I would categorize dollar Tree along Miles and Snows strategy as prospector as it is innovative
and growth oriented, searching for new markets and new growth opportunities, encouraged to
take risk.
Dollar Tree has been experiencing tough competition from major retailers like Walmart and
Kroger as they have opened smaller store formats that compete more directly with such
discounters.
Dollar Tree in order to fight such competition and to widespread their presence has acquired
Family Dollar for $8.5 billion deal. This will give Dollar Tree more than 13,000 stores in the
U.S. and Canada. Thus, current leading discounter, Dollar General Corp., has more than 11,300
stores in the U.S.

Here, the company has taken risk by buying out rival discounter Family Dollar, giving it a wider
reach in the intensifying fight for deal-seeking customers.
2. Assume that Dollar Tree competes in the discount retail industry. Identify the strategic
groups that exist and define each in detail
A strategic group is a group of firms that compete against each other using similar strategies to
attract the same group of customers. There will be different strategic groups following strategies
similar to Porter's generic strategies of low cost, differentiation, and focus/niche
The grocery stores in US can be split into following sectors:
Store Format Definitions
Traditional Supermarket These Stores offer a full line of groceries, meat, and produce with at
least $2 million in annual sales and up to 15% of their sales in GM/HBC. These stores typically
carry anywhere from 15,000 to 60,000 SKUs (depending on the size of the store), and may offer
a service deli, a service bakery, and/or a pharmacy.
Fresh Format -Different from traditional supermarkets and traditional natural food stores, fresh
stores emphasize perishables and offer center-store assortments that differ from those of
traditional retailersespecially in the areas of ethnic, natural, and organic, e.g., Whole Foods,
Publix Green Wise, The Fresh Market, and some independents.
Superstore - A supermarket with at least 30,000 sq. ft., generating $12 million or more annually
and offering an expanded selection of non-food items. Specialty departments and extensive
services are offered.

Warehouse Store - Grocery store with limited service that eliminates frills and concentrates on
price appeal; items may be displayed in their original shipping cartons rather than placed
individually on shelves. Stores may also sell bulk food and large size items.

Super Warehouse - A high-volume hybrid of a large Traditional Supermarket and a Warehouse

store. Super Warehouse stores typically offer a full range of service departments, quality
perishables, and reduced prices, e.g., Cub Foods, Food 4 Less,and Smart & Final.
Limited-Assortment Store - A low-priced grocery store that offers a limited assortment of
center-store and perishable items (fewer than 2,000), e.g., Aldi, Trader Joes, and Save-A-Lot.
Other - The small corner grocery store that carries a limited selection of staples and other
convenience goods. These stores generate approximately $1 million in business annually.
Non-Traditional Grocery

Wholesale Club A membership retail/wholesale hybrid with a varied selection and limited
variety of products presented in a warehouse-type environment. These stores are generally
120,000 Square feet, mostly dedicated to large sizes and bulk sales. Memberships include both
business accounts and consumer groups, e.g., Sams Club, Costco, and BJs.
Supercenters - A hybrid of a large Traditional Supermarket and a Mass Merchandiser.
Supercenters offer a wide variety of food, as well as non-food merchandise. These stores are
generally more than 170,000 square feet and typically devote as much as 40% of the space to
grocery items, e.g., Walmart Supercenters, Super Target, Meijer, and Fred Meyer.

Dollar Store - A small store format that traditionally sold staples and knickknacks, but now sales
of food and consumable items at aggressive price points account for at least 20%, and up to 66%,
of their volume, e.g., Dollar General, Dollar Tree, and Family Dollar.
Drug Store - A prescription-based drug store that generates 20% or more of its total sales from
consumables, general merchandise, and seasonal items. This channel includes major chain drug
stores such as Walgreens and CVS but does not include stores/chains, e.g., The Medicine
Shoppe, that sell prescriptions almost exclusively.
Mass Merchandiser - A large store selling primarily clothing, electronics, and sporting goods
but also carries grocery and non-edible grocery items. This channel includes traditional Walmart,
Kmart, and Target stores, etc.
Sources: Progressive Grocer's 2010 Marketing Guidebook and Willard Bishop, The Future of
Food Retailing, 2009
- See more at: http://www.fmi.org/research-resources/supermarket-facts#sthash.0EEndVr3.dpuf
Competition has intensified among discount retailers in recent years. How can Dollar Tree
continue to distinguish itself in this industry? What changes in the competitive strategy, if any,
would you recommend and why?
The competition has intensified in US market with players like Walmart coming up with smaller
stores to compete with Dollar store.
I would recommend that the company should markets in developing countries like India, South
Africa etc.

Indian retail industry has presently emerged as one of the most fast paced industries. It accounts
for over 10 per cent of the countrys gross domestic product (GDP) and around eight per cent of
the employment in India. The country is today the fifth largest global destination in the world for
retail.
In 2013, the Indian retail sector was estimated at US$ 520 billion. By 2018, the Indian retail
sector is likely to grow at a compound annual growth rate (CAGR) of 13 per cent to reach US$
950 billion. Food and grocery is the largest category within the retail sector with 60 per cent
share followed by the apparel and mobile segment
Source: http://www.ibef.org/industry/retail-india.aspx
Also, I would recommend the company to start online operations in majority of the countries of
the world. This will help the company to create a brand image. Also, this will help the company
to understand the market and enter once they have a good hold of it.

In a narrative format, discuss this firm from a strategic perspective. Information concerning
recent changes in the firms is readily available online and should be accessed. Strategic issues
should be discussed in "real time."
Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank. The company is
headquartered at Atlanta, Georgia, U.S.
Today, The Home Depot is the world's largest home improvement specialty retailer, with more
than 2,200 retail stores in the United States (including Puerto Rico and the U.S. Virgin Islands),
Canada, and Mexico.
Recent Changes at Home Depot:
In 1981, Home Depot went public on NASDAQ.
In 1984, the company moved to New York Stock Exchange.
In 1989, the company opened its 100th store.
In 1994, the company acquired Canada based firm Aikenheads home improvement centers
In 2001, the company acquired Total Home, to mark its presence in Mexico
In 2006, the company extended its reach to China by acquiring The home Way, a 12 store chain
The major competitor of Home Depot (HD) is Lowes, both the firm compete primarily on
customer service.
Strategic Issues associated with HD;

1. Economical: The recession during 2008 has impacted home improvement industry. The
economic downturn limited the people from making huge spending on these items.
2. Political: The decisions and policies of the government at state and federal level can have
a great impact on the profitability of the company. The company complies with all the
legal and other requirements necessary for making political contributions and interaction.
3. Technological: The Company has been spending quite a good amount in upgrading the
technological equipment to facilitate its employees and smooth operations throughout its
business units.
4. . Home Depot has more than 10 competitors including Sears, Ace Hardware, Franks
Nursery, and Lowe's. Home Depot faces cut throat competition with Lowes Companies.
These competitors are competing with each other in the prices wars in order to get a
chunk of its counterparts market share.
5. The customer needs and wants tend to change over time.
6. The company has been experiencing issues with low customer service issues.
Sources:
Harvard, 2011. Remodeling, a new decade of growth, retrieved on June 21, 2011 from
http://www.jchs.harvard.edu/publications/remodeling/remodeling2011/r1 11_5_a_new_decade_of_growth.pdf
Home Depot Code of Conduct, 2011. Compliance with Laws, Regulations, Corporate
Compliance Policies, and Standard Operating Procedures, Retrieved on June 21, 2011 from
http://ir.homedepot.com/phoenix.zhtml?c=63646&p=irol-govConduct
Home Depot, 2011. Environmental milestones, Retrieved on June 21, 2011 from
http://corporate.homedepot.com/wps/portal/Environmental_Milestones

Home Depot Foundation, 2011. Community Involvement, Retrieved on June 21, 2011 from
http://www.homedepotfoundation.org/
Home Depot, 2008. Political Activity and Government Relations Policy, Retrieved on June 21,
2011 from http://ir.homedepot.com/phoenix.zhtml?c=63646&p=irol-govpoliticalactivity
Home Depot, 2011. We Build Community, Retrieved on June 21, 2011 from
https://careers.homedepot.com/cg/content.do?p=community

1. Identify Home Depot's corporate- and business-level strategies. Support your assertions.
Corporate level Strategy: The Home Depot has primarily used a Growth / Concentration /
Horizontal strategy to achieve such unmatched growth. The firm focuses on expanding their
products into multiple geographic locations at the same point in their value chain, while
simultaneously increasing the range of products and services offered to current markets.
For example, the company has made multiple acquisitions since its inception:
In 1994, the company acquired Canada based firm Aikenheads home improvement centers
In 2001, the company acquired Total Home, to mark its presence in Mexico
In 2006, the company extended its reach to China by acquiring The home Way, a 12 store chain
Business Level Strategy: Integrated cost leadership/ Differentiation strategy- The Home Depot
adopted a cost leadership strategy. It has allowed it to lower its cost structure and improve
operating performance. This has enabled Home Depot to be more profitable than Lowes and
other competitors, such as Menards.

The Home Depot has established a three-legged strategy to boost business (Corral, 2010). It is
specifically concentrating on
1. supply-chain transformation
2. Merchandise transformation,
3. Customer service.
Source: Corral, Cecile B. (2010). Home Depot on Path to Recovery with Three-Pronged
Initiative. Home Textiles Today. Retrieved from Ebscohost on November 25, 2011
2. Describe and critique Home Depot's current marketing strategy. Does it "fit" with the
firm's strategies at the corporate and business levels? Explain.
The company has been focusing on Cost Leadership Strategy. In order to achieve the same, the
company often comes up with low price campaigns.
Product: The Company sells these products to do-it-yourself (DIY) customers, do-it-for-me
(DIFM) customers, and professional customers who include professional remodelers, general
contractors, repairmen, small business owners and tradesmen.
Price: Home Depot offers discounted price to its customers. The company also comes up with
special buy prices on electronic appliances.
Place: Home Depot has around 2,224 across the world. This makes the company to be widely
accessible.
Promotion: The company markets special offers via email newsletters, do it yourself workshops,
and garden clubs.
Source: https://corporate.homedepot.com/OurCompany/History/Pages/default.aspx
Compare and contrast Home Depot's functional strategies (e.g., marketing, human resources,
production, etc.) with those of Lowes. What should Home Depot's top management do at the
functional level to distinguish the firm from its closest rival?
Home Depot sells product to both males and females; but it is perceived as male environment.
They have wide range of products catering to wide range of ages.

Lowes offers products and services for both the genders; but it is perceived as more of female
environment.
Home Depot emphasis on DIY whereas Lowes emphasis on importance of improving the look
and feel of a home through products, such as bed sheets, kitchen tables and TV screens.
Home Depot stores are generally large up to 105,000 Square Feet of boxed spaces, along with
outside garden area. Lowes work on two model formula; one from metropolitan and other from
small to midsize markets.
The top management should intensify its international concentration to achieve greater
economies of scale.
The company should consider to create value to the customer of the other countries like China
and Canada. Therefore, The Home Depot, Inc. should expand its product lines with more
renewable energy products. Home Depot has always been a leader in the industry. In order to
maintain this status, it needs to broaden its market segment. One way to do this would be to
extend its marketing to female consumers.
Associates at the stores need to be extensively trained on information about all products and be
able to assist customers with information on do-it-yourself projects.