Question

Using Dollar Tree as a business answer following questions:

-Is the future promising or questionable for the company? According to their sales?

-What does it need to do in the future to provide strong financial returns? Why?

Make recommendations based on your own critical assessment about what the company should consider doing differently based on your analysis so far and your application of specific marketing principles.

Answer 1

As a business owner the future looks questionable for the company.As per the sales figures provided by the management last fiscal year,Dollar Tree have generated a revenue of $5.8 billion with a growth rate of approx 4% with their recent changes however they are sitting on very less cash and the changes needs to be effective in the coming two quarters for them to still function in the market.

Their primary competitor (indirect) is Amazon who is taking away the charm of $1.00 dollar items.Traditionally Dollar Tree is your neighborhood shop wherein you can pick up something your forgot.With Amazon entrying in their market and seeling items which are similar and offering them time and convenience through their Prime channel ,the Dollar Tree needs to do some disruptive thinking instead of the recent Family Dollar stores being converted into Dollar tree locations and some Family Dollar stores which frankly looks a desperate attempt with huge burden on their business model.The primary thing which they can pick up is entering into the market where Amazon cant enter(Alcohol,Tobacco,Vaping Items) and generate enough footfall to create a positive cash flow.Secondly teaming with fellow retailers will also give them an edge over Amazon.With a collaboration wherein a local/foreign player is lookig to enter their market they have an edge over Amazon in competing with them since regular profits and not long term user growth is their priority unlike Amazon.With newer markets opening they can still rule the brick and mortar space.Recent trends show that the market would never be completely depending on ecommerce amidst the challenges of a global pandemic fast approaching.The market stays.The low price best quality need would be there for decades and Dollar Tree can capitalize on them.

Finallywe can discuss how steps discussed above fits the bill perfectly in terms of Marketing Principles(Product,Price,Place and Promotion).a)Product:Partnering with a fellow retailer and entering into newer markets will increase their product line which would bring increase footflow and revenues. B)Price:One of the primary reasons it has kept growing is their focus on regular profits since it doesnt pay any dividends.I personally feel that they should change the price point and have a separate divison wherein they can sell higher priced goods which will be beneficial for the long term future of the company.c)Place:The company must plan to expand their presence instead of consolidating their positions by closing locations.d) Promotion:Current operating costs and marketing expenditures need to be revamped and with uture cash flows expected to increase Dollar Tree must use their family style shopping a feel good factor for the customer to come to them instead of Amazon Go stores nearby.