Swot_Analysis

One of the best ways to develop a picture of any company is with SWOT analysis- a look at a company’s strengths, weaknesses, opportunities, and threats. A SWOT analysis summarizes the key issues and the strategic capability of a business/organization that are most likely to impact on strategic development. It focuses on the internal and external environment of a business/organization, examining strengths and weaknesses in the internal environment and opportunities and threats in the external environment. A SWOT analysis also allows you to balance your strengths and weaknesses and keep knowledge of where the business is headed and their customers’ needs. Shopping has changed over the past decade. People are looking for consumer benefits or incentive programs that offer customer satisfaction, selection and guarantees. As a single mother in today’s market, financial budgeting is the utmost when shopping for my family. I am always looking for a bargain. Dollar Tree Inc. operates a variety discount that provides household items, toys, seasonal items for the holidays, food, health products, and beauty aids, and books. Dollar Tree Inc. is a discounted retail store that has promised customers to keep all of their products priced at $1. Although their products are sold at a dollar, they believe in still providing value to their customers. This business uses the SWOT analysis to determine what is best for the business to do in order to compete or survive amongst the competition of other businesses such as, Family Dollar, 99 Cent Only, Wal Mart, Dollar General, and Walgreens. The following is the SWOT analysis that I have come up with for Dollar Tree Inc.: * Strengths- Dollar Tree stays true to their image and actually prices all their goods at a dollar. All others competitors, even the “dollar stores”, have multiple levels of pricing, most of which are higher than $1. Customers know what to expect when they shop in Dollar Tree stores. They have promised their customers of selling goods at $1 and because they must maintain this price point, they run their company efficiently. Financials in general are very strong. They tend to be better than peers or comparable with the best of them. * Weaknesses- Their day’s sale in inventory is somewhat weak compared to their competition. However they are steadily improving their asset management. Over the past few years, debt to equity ratio has been increasing. * Opportunities- With current economic conditions, it is many consumers are “trading down and try to obtain necessities in the cheapest way possible. Dollar Tree’s corporate strategy to add more offerings in basic consumables put them in a perfect position to benefit from this trend. Dollar Tree recently acquired Deal$, which allows the company to market products at slightly higher prices without compromising brand image. Also offering great values to customer, Deal$ is more likely to stay relevant when the economy eventually recover. Deal$ has outperformed the original stores in every single sales metric. Dollar Tree is still strategizing on how to best utilize this acquisition, but when they expands this subsidiary, success is imminent. The company wants to continue to grow their refrigerated/freezer product line. This has potential of adding to profits as it provides more variety to customers. Dollar Tree has recently started accepting major credit cards, and its value proposition becomes accessible to more customers. * Threats- Dollar Tree Inc. imports 40% of its goods from overseas which exposes them to currency exchange risk. Sales and profits may be hurt as competitors aggressively cut prices, as retailers scramble to maintain market share. As U.S. consumers increasingly turn their attention to the dim economic prospects, they tighten wallet string, spend more time searching for deals, and look for ways cut “trim the fat” in their shopping budget. Dollar Tree Inc. has actually benefited from the economic downturn during recession. In part due to luck, in part due corporate strategy and SWOT analysis, management has brought Dollar Tree to the perfect position to benefit from the current market.