The discount store targets middle-class customers by selling affordable items at one dollar. The company deals with a variety of products including food, medicine, toys, candy, and electronics. Dollar tree operates in the retail industry where the level of competition is very high due to the many firms that operate within the industry (Richardson 10). The regulatory issues especially in the foreign countries, such as Canada pose a challenge to the discount store as it has to comply with all the rules including taxation. The other external threats to the success of the company include the fluctuation of the value of the dollar that lowers its profitability. The other factor is the lack of global presence. Despite its success in the American market, it is not able to penetrate the global market unlike the competing firms. The business entity strategy that the company has used is market concentration because it has many branches within the retail industry in the same country.
The company’s pricing strategy is a way of reducing the risk of losing the market share to the competitors. Among the competing firms includes Walmart and E-mart that are well established but the marketing strategies has won the loyalty of many customers. The company is also tapping into the international market to expand its market share and profitability. The financial performance of the company in the 2015 second quarter is sound as the sales increased by 2.7%, an indication that the company is performing well financially (Yahoo Finance).The company has a strong internal control enhanced by the company’s culture and the low employee turnover. The diversification of products is also another way that the company enhances good internal control.
Works Cited
Finance, Yahoo. “Dollar Tree, Inc. Reports Results for the Second Quarter Fiscal 2015.” Yahoo Finance. n.p., 1 Sept. 2015. Web. 28 Oct. 2015.
Richardson, Woodrow D. “Dollar Tree Stores, Inc.(A): The CalPERS Focus List.” Business Case Journal 16.1 (2009).