Family Dollar - Business Report

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Company New Mission Statement:

Family Dollar mission states to bring the best to our customers, providing day-to-day items at everyday low and reasonable prices. We are providing affordable basic consumer items to families of all income levels.

We continue to lead a steady growth to meet the needs of our customers thus to maximize the profit to our investors. We operate 6,430 stores in 40 states in the United stated, we want to expand our services to cover the country and open stores in other countries. We will continue to use up-to-date technology to expand a solid position among discount stores.

We want to serve our employees by providing them job security, compensation, a unique benefit package, and opportunities for growth, rewarding them with high standards of excellence with good intention for strong performance. We want also to serve better the lives of families with low and limited income by providing them with affordable goods and with contributions to non-profit organizations by meeting their needs through free giving.

Company New Vision Statement:

To be number one as a discount store in the united stated and other continents as well.



  • Healthy Gross profit margin as reported by Clayton Browne (2009)
  • Leverage ratios average is less than the industry average as reported by Metz, Albert (2006).
  • Total assets turnover better than the industry average.
  • Approximately 85% of the company’s products are priced between 1$ and 10$ as sited at NASDAQ (2009).
  • Won a safety reward as stated in the study “Family Dollar Store”.
  • Accessible stores with parking lot which makes it easy for the consumers to shop in a faster and efficient way.


  • Not focusing much on advertisement.
  • Limited market in the United stated only.
  • In late 2007, market share dropped from 1.85% to 1.75% as stated in yahoo finance (2007-2008)
  • Limited variety of products offered.
  • In 2008 the company’s sales grew by 2.15%, which is lower than the industry average 5.3%.
  • Not generating enough sales from its website due to its technology’s capabilities.
  • Lack of long term investments due to its quick ratio which is slightly higher than the industry average as stated at
  • Bad management and low attention on employees (Human resources section)


  • Weak economy in the United States made the demand on the low priced product higher.
  • The average income is decreased due to the economy, what made consumers seeking low priced products.
  • Have a new market in the United States and grow even bigger.
  • Have a new market opportunity outside the United States.
  • Limping economy made the food stamps demand higher than usual as stated at (2008).
  • In December 2008 Real estate prices reported the largest drop price in its history (wikipedia, n.d.)
  • Lowering cost by using new electrical products to reduce energy consumption.


  • High competition for the availability of large discount retailers.
  • Comparing the Size of the store, Dollar general is making more sales.
  • The goods sold are sensitive to the economy conditions.
  • The idea of family Dollar store has a low reputation for the mid-class consumers.
  • Inflation in the United States in 2008 leading prices to be higher. (inflation, n.d.)
  • Lack of customer’s satisfaction programs, the loyalty of the customers may be lowered.
  • Walmart has 95% of the retailers. (google, n.d.)
  • Dollar General has 46% of Market share, and Family Dollar has 34% (Google, n.d.)

Year 1:

Use of Microsoft Dynamics and full POS (Point of Sale) integrated systems.

Automation has a full impact on our lives and especially on businesses.

Family Dollar will benefit from different aspects of the system and especially on the following points:

  • Expand revenue sources, better customer experience, enhance employee productivity and satisfaction: Customer service enhancement by adding a good range of payment methods (food stamps , Credit cards and PayPal for online payments).

Lane efficiency by removing older machines and optimizing the use of POS cash registers. Customers now can checkout in seconds.

Reduce the shrinkage were also measured to improved functionality within the POS system. Hardware Cost computers is reduced by eliminating the need of Back office computer equipment.

Employee satisfaction will increase, Managers retention makes it higher and gave them the time to manage people and stores as efficient as it should be the connected system between the shops and the head Offices made the employees more involved in the company activities and news.


Microsoft Dynamics offers inventory and pricing, store manager portal, corporate Learning Management system with we based training courses, employee hiring, paperless environment and applications, and detailed store reporting. The Manager section includes news about the company, valuable information yearly evaluations, to do lists, inventory, variance reporting, and finally truck delivery schedule.


The new POS system application is more expandable than the old systems to meet future application adds on.

One of the examples, the new system can communicate with the PDA (portable data collection) for product inventory, price checking, and other barcodes applications. The data will be automatically sent to the back Office application and will be analyzed automatically.

Easier Manageability

With a minimum required skills, Microsoft POS is able to run even though we have more than 11000 checkout counters.

All employees and by store will have a sufficient training to be able to run and execute the essential day to day activities, Reducing the resistance to change , within the company and have them eager to use the software for a shop performance and reward systems.

The Microsoft Systems Management is equipped to monitor critical applications, track assets, and record any suspicious activity from inside the system.

Finally, as an IT point of View having a one system to control all your products, staff recognition program, inventory control, KPIs, forecasting, inventory management will sure have a good and improving impact on the business especially when it comes to managing a huge number of stores and Staff located all over the United States not only on the cost level but on the commitments and trust level between all stakeholders.

Year 2 1-Close unwanted shops in actual areas we are already operational in. As shown in the study case Family dollar operates its best in the southern area of the United States even though the number of store per N number of population could be less and could be more. With this strategy we are about to reduce the cost of employees, maintenance and shipping, waste, cost of rent and increasing the sales of other branches. 2-Keep on using the energy saving light system to meet our mission statement reduce cost and reduce Taxes (tax reduction program in the United States. 3-Acquire more items to be sold in our shops and to have an excellent variety to meet our shoppers’ expectations. 4-More awareness that we accept Food Stamps and other payments methods as studies showed that food stamps utilization in the United States is growing and by providing that we will acquire new customers (nytimes, n.d.) 5-Targeting Middle Class shoppers by conduction a marketing plan to convert them to loyal customers. 6- Invest in Technology to reduce cost of business and bring better prices to the customer. 7-Open new Stores in the area we are already in where the number of population vs number of stores is lower. 8-Raise Debt or Issue equity to finance the building of more stores while interest rates are low.

Year 3

9-Open an online store and sell more Items to cover an even wider variety and attract those technology users to be potential customers, increase our presence in the retail industry, decreasing cost of sales and increasing gross profit margin.

10-Associate a Marketing budget to position Family Dollar as a brand into consumers and make us the first Retail Store to think about, but always reminding people that we are here.

11-Build additional Stores in the United States around 1500, currently as the study shows many stores are closing and the price or real estate has dropped, in some areas. Opening stores in lower priced areas or buying a terminated lease can save the company many startup fees.

12-Parenting with Toshiba and Microsoft by using the POS (Point of sale) has many benefits.

13-Implement price cuts if demand falls.

14-Open new shops in Alaska, California, Hawaii, Oregon and Washington.

15-Increase the number of distribution centers to reduce fuel cost and lower the sales cost.

16-Conduct a backward integration to keep the cost of goods low.

17-Build new distribution centers to service on the west and lower the transportation.

Expected Cost

Year 1

Year 2

Year 3

Build 1500 new store in the united states





New Online Store





New POS system





Investing in new additional Products










Opening new Distribution center in the west




Stores adaptation to new technology










EPS/EBIT Analysis $ STOCK FINANCING $ From Loans








































Profitability RatiosIndustry AvrgFamily Dollar

Gross Profit



Operating Profit



Net profit



Return on Assets



Growth Ratios (uoregon, n.d.) (moneycentral, n.d.)




Net Income




Healthy Gross profit margin [Online]: [Accessed: 22nd August 2014]

Leverage ratios average [Online]: [Accessed: 22nd August 2014]

Company’s products are priced [Online]: [Accessed: 22nd August 2014]

Market share dropped (2007-2008) [Online]: [Accessed: 22nd August 2014]

Lack of long term investment [Online]: [Accessed: 23rd August 2014]

Food Stamps higher demand 2008 [Online]: [Accessed: 23rd August 2014]

Strategic Management 2014-2015