Family Dollar

Family Dollar - Capabilities and Core Competencies When it...

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Capabilities and Core Competencies When it comes to the capabilities and core competencies of Family Dollar, three distinct advantages to observe are its in house trucking fleet, distribution centers, and store locations. “Capabilities are the firm’s capacity to deploy resources that have been purposely integrated to achieve a desired end state (Hitt, 2003, pg85).” “Core competencies are resources and capabilities that serve as a source of a firm’s competitive advantage over rivals (Hitt, 2003, pg86).” Family Dollar specializes in providing big brand at low prices. By owning their own trucking fleet and distribution centers, they can cut the costs associated with the transportation of products to their retail stores. With the success of operating stores in urban markets, about 35% are located in metropolitan areas. Family Dollar realizes that metropolitan areas is the source of two-thirds of all consumer spending in the U.S., while inner cities are the most underserved retail space in the U.S. By operating more in urban markets, this gives Family Dollar a competitive advantage when opening large number of stores in convenient neighborhood locations (Family Dollar Annual Report). Value Chain Analysis “A value chain analysis allows the firm to understand the parts of its operations that create value and those that do not (Hitt, 2003).” Two parts that divide the value chain are: primary and support activities. It is important for Family Dollar to understand all of these activities in order to focus their efforts to the areas that are advantageous for their business.
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Primary activities Primary activities are tasks, which are involved in the actual creation of the product, its sale, distribution, service after the sale, and all operations that pertain to theses activities. (Hitt, 2003 p.89) Family Dollar’s primary activities are no different than any other company’s activities. They include its marketing, sales to consumers, advanced distribution process, and the creation of customer satisfaction. In order to remain profitable, Family Dollar relies on customer satisfaction and brand loyalty. These primary activities work together to create over-all customer satisfaction, and this is what makes Family Dollar profitable. Marketing plays a major roll in Family Dollar’s primary activities, so it is important to understand what differentiates them from other competitors. “Family Dollar offers ‘Big Brands at Little Prices’ on a wide variety of merchandise for home and family ( .” Family Dollar cuts down most of their marketing expense by letting their prices do the talking for them. They rely heavily on word of mouth advertisement from their customers as opposed to
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Family Dollar - Capabilities and Core Competencies When it...

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