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1、FamilyDollarStores,Inc.-2009CaseNotesPreparedby:Dr.MernoushBantonCaseAuthor:JosephW.1.eonardA. CaSeAbStraCtFamilyDollarStores,Inc.()isacomprehensivebusinesspolicyandstrategicmanagementcasethatincludesthempany,sFiscalyearendAugust2008financialstatements,mpetitorinformationandmore.Thecasetimesettingis
2、theyear2009.Sufficientinternalandexternaldataareprovidedtoenablestudentstoevaluatecurrentstrategiesandrecommendathree-yearstrategicplanforthecompany.HeadquarteredinTennessee,FamilyDollarStores,Inc.istradedontheNewYorkStockExchangeundertickersymbolFDO.B. ViSiOnStatement2rwosed)FamilyDollarStores,lc.b
3、ringsvaluedmerchandisetoitsloyalcustomers.C. MiSSiOnStatement(actual)FamilyDollarsmissionstatesthethreemostimportantrelationshipscriticaltomakingourbusinesssuccessful;ourcustomers,ourassociates,andourinvestors.Forourcustomers,weofferacompellingplacetoshopbyprovidingconvenienceandlowprices;Forourasso
4、ciates,Weofferampellingplacetoworkbyprovidingexceptionalopportunitiesandrewardsforachievement;Forourinvestors,weofferampellingplacetoinvestbyprovidingoutstandingreturns.MiSSiOnStatement(Proposed)AtFamilyDollar,westrivetobringthebesttoourcustomers,offeringeverydayitemsateverydaylowprices(1).Weseektom
5、eetourcustomer-sbasicneeds,providingthemwithcommonhouseholdproducts(2)atattordablepriceswhilemaintainingourgrowthandprofitabilitytoourloyalstockholders(5)utilizingthelatesttechnologyandthroughdedicatedemployees(4,9).Ourpurposehasbeentoopenstoreswherewestronglybelievewecanbecompetitivewhilemeetingthe
6、demandsofourcustomers(3).Wecontinuetoberesponsiblebycontributingbacktocommunities,societyandcharitableevents(6,7,8).1. Customer2. Productsorservices3. Markets4. Technology5. Concernforsurvival,profitability,growth6. Philosophy7. Self-concept8. Concernforpublicimage9. ConcernforemployeesD. EXternalAU
7、ditOpportunities1. Theincomeforthemiddleclassisdiminishing,causingthemtobemorecautiouswiththeirexpenditures2. Theaveragehouseholdinmeisdroppingduetoweakeconomy3. Thedemandforlow-priceditemsisgrowing4. Theunemploymentrateisincreasing5. Smallerretailersareclosingtheirstoresandsomehavefiledforbankruptc
8、yThreats1. Highcompetitionamonglargediscountretailers2. DollarGeneralhashighermarketsharecomparetoFamilyDollar3. Persquarefoot,DollarGeneraliscreatingmoresales4. Theindustryissensitivetoenomicconditions5. Changeindemographicsduetopurchasinghabits6. Increaseintariffsandtradebarriers7. 1.ackofqualityc
9、ontrolinproductsduetobeingimportedfromChinaandothercountriesCPM-CompetitiveProfileMatrixFamilyDollarDollarGeneralDollarTreeCriticalSuccessFactorsWeightRatingV/elghtedScoreRatingWeightedScoreRatingWeightedScoreStore1.ocations0.0830.2420.1640.32MerchandiseVariety0.1220.2410.1230.36Advertising0.0420.08
10、10.0430.12Customer1.oyalty0.0520.1010.0530.15MarketShare0.0720.1410.0730.28CustomerService0.0520.1030.1510.05ProductQuality0.1520.3010.1530.45PriceCompetitiveness0.1520.3010.1530.45Tecrx)!ogy0.0510.0520.1030.15Total1.001.550.992.33ExternalFactorEvaluation(EFE)MatrixKeyExternalFactorsWeightRatingWeig
11、htedSrOpportunities1.Theincomeforthemiddleclassisdiminishing,causingthemtobemorecautiouswiththeirexpenditures0.140.42.Theaveragehouseholdincomeisdroppingduetoweakeconomy0.130.33.Thedemandforlow-priceditemsisgrowing0.0730.214Theunemploymentrateisincreasing0.0940.365.Smallerretailersareclosingtheirsto
12、resandsomehavefiledforbankruptcy0.0830.24Throats1.Highcompetitionamonglargediscountretailers0.130.32.DollarGeneralhashighermarketsharecomparetoFamilyDollar0.0920.183.Persquarefoot,DollarGeneraliscreatingmoresales0.0720.144.Theindustryissensitivetoeconomicconditions0.0830.245.Changeindemographicsduet
13、opurchasinghabits0.0530.156.Increaseintariffsandtradebarriers0.0710.077.1.ackofqualitycontrolinproductsduetobeingimportedfromChinaandotheruntris0.110.1TOTA1.1.002.69POSitiOninaMaPSjrngOnInRShopping(eCommerce)Wal-MartDollarTreeVdePriceCompetitiveNarrowPreCompE.IntenIalAUditStrengths1. Sellsessentiali
14、temswithrelativelyinelasticdemand2. Healthygrossprofitmargin3. Acceptsfoodstamps4. 1.owerthanindustryaverageleverageratio5. Beingabletoraiseitsdividends6. Betterthanindustryaveragetotalassetturnover7. Itsreturnonassetsof1.84%ishigherthantheindustryaverage8. Itsreturnonequityis4%,higherthantheindustryaverage9. Approximately90%ofthempanysproductsarepricedbelow$1010. Inthepastyear,thempany,sstockhasoutperformedtheaverageretailindustryWeaknesses1. Doesnotdomuchadvertising2. 1.imitedmarket,solelyintheU.S.only3. Intheyear2008,thecompanysmarke