Question

2) “Your client Family Dollar Stores Inc. is a chain of dollar stores across the United...

2) “Your client Family Dollar Stores Inc. is a chain of dollar stores across the United States. A dollar store, also known as variety store, is a retail store that sells a wide range of inexpensive household goods including food and drink, personal hygiene products, small home and garden tools, office supplies, decorations, electronics, garden plants, toys, pet supplies, remaindered books, recorded media, and motor and bike consumables. Although the overall dollar store business has boomed as a result of the recent economic recession in the United States, as customers have shifted away from big box retailers to cheaper alternatives, the client Family Dollar Stores has found that profit growth has not done as well as revenue growth. Since revenue growth has started to slow, improving profitability has become a key priority for the client and they have hired our consulting firm to investigate the issue. How would you go about helping the client to improve their profitability?”

3) “Your client Walmart (NYSE: WMT) is the nation’s largest, global retailer. Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962. As of January, 2017, Walmart has more than 11,000 stores in 28 countries. The company operates under the name Walmart in the United States and Canada. It operates as Walmart de México y Centroamérica in Mexico and Central America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Chile, Brazil, and Canada. It also owns and operates the Sam’s Club retail warehouses. The client Walmart is implementing a new supplier management system in order to increase the transparency into the purchasing decisions and ultimately decrease costs. This new system will replace thousands of homegrown systems currently used within the company. Currently, orders placed from suppliers are manually keyed into Walmart’s ERP system at local offices by employees. With the new system, the goal is to have a centralized platform where Walmart employees can input new supplier information and place orders. Additionally, the new system will allow suppliers to log into the system to update information like address and billing changes, something Walmart employees had to do in the past. Because of the size and international scope of Walmart, the implementation of the new supplier management system will be rolled out in phases. The leadership at Walmart is worried at how this change will affect its employees and productivity. They have hired you to advise the company through this change. How would you assist the client as it does through this large scale change?”

4) “Our client New Balance Athletic Shoe Inc., best known as simply New Balance, is an American footwear manufacturer based in the Brighton neighborhood of Boston, Massachusetts. The company was founded in 1906 as the “New Balance Arch Support Company” and currently is one of the world’s major sports footwear manufacturers. The client New Balance runs a national chain of shopping mall-based retail stores that specialize in athletic shoes (sneakers, cleats, etc.) and also carries sporting apparel (hats, t-shirts, sweatshirts, pants, shorts, etc.). There are two other mall-based athletic shoe retailers who are very similar to your client in terms of size, product mix and strategy: Puma and Adidas. Your client New Balance informs you that their profits are declining and wants you to determine why and recommend a strategy to deal with it. What would you recommend?”

5) “Carrefour S.A. (Euronext: CA) is a French multinational retailer headquartered in Boulogne Billancourt, France, in the Hauts-de-Seine Department near Paris. Carrefour is one of the largest hypermarket chains in the world (with close to 1,600 hypermarkets at the end of 2015), the fourth largest retail group in the world in terms of revenue (after Wal-Mart, Tesco and Costco), and the second in profit (after Wal-Mart). Carrefour operates in more than 30 countries, in Europe, the Americas, Asia and Africa. Recently, the management of Carrefour reviewed its situation under conditions of stagnant growth and increasing competition from international rivals like Wal-Mart, Tesco, etc. A team of consultants has been hired to evaluate the retail giant’s performance. As one of case team members, what metrics would you use to evaluate Carrefour’s performance?”

6) “Your client Circuit City Stores, Inc. is an American consumer electronics retailer headquartered in Richmond, Virginia. It sells all kinds of consumer electronics, personal computers, entertainment software, and large home appliances. The company opened its first store in the 1970s, pioneering circuit city storesthe electronics superstore format in the 1990s. Currently there are more than 300 Circuit City Superstores nationwide located in all major cities across the US.The client Circuit City is considering the introduction of private label brands into their superstores. Private label brands are unbranded products made by an OEM (original equipment manufacturer). Is there any value in this product line? If yes, what are the sources of value of this program? What are the potential downside risks associated with introducing private label products?”

Homework Answers

Answer #1

2)

Firm can increase its profitability by increasing sales and reducing cost of production. Following suggestions can come handy in increasing profitability of Family Dollar Store:

  • Increasing prices: due to recession, people have moved to low quality products. Thus, demand for these alternates has moved up. According to elasticity of demand, family dollar must increase prices where demand is inelastic. But rise in price level should not be substantial ones matching high quality goods.
  • Reducing the cost of production: resources at the disposal of firm should be optimally used to get maximum.
  • Introducing new products: there must be right and informed interactions with customers to develop new products.
  • Firm must resort to advertisements to increase awareness of its products.
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