Dollar Tree Case Analysis

Dollar Tree is a single price variety store that now operates more than 14,000 stores across 48 states and five Canadian provinces (Thomas, 2015). Most all of the products offered by Dollar Tree are priced at $1.00 or less and the company offers products that meet a wide variety of consumers every day needs. According to Parnell (2014), Dollar Tree customers are typically price-conscious consumers who are looking to get the best price available and feel that prices at other chain stores are excessive compared to those of Dollar Tree. Dollar Tree is able to offer its products below chains such as Wal-Mart, Target and others with economies of scale much larger because they sell products that are not commercialized. The products that are offered in stores such as Dollar Tree are able to be sold for a dollar because …show more content…
To distinguish itself in the industry, Dollar Tree will need to continue its quest to offer low priced products that meet the everyday need of thrifty consumers. Food items have been a good seller for the company because they offer food items, some of them name brand, in smaller quantities for a dollar. This is a draw for the consumer who doesn’t need, want or can’t afford the larger quantity or price point. The fact that the company now accepts manufacturer coupons will also serve as a draw to the consumer who is looking for products at the best available price. The fact that Dollar Tree has acquired Family Dollar chain of stores will give the company greater economies of scale. They will be able to capitalize on savings because of their ability to combine sourcing and procurement activities, reduce corporate overhead, and optimize product distribution and its logistics networks. They will be able to continue offering a quality product for a single price point and will have a greater profit margin because they will be able to obtain their products cheaper and be able to deliver more