IT’s About Business
2.4 Is Dollar General Really Thriving with Minimal IT?
1. Can Dollar General survive with minimal IT? Support your answer?
Yes Dollar General can survive with Minimal IT. Wal-Mart had revenues of $191 billion. Wal-Mart's 2002 sales topped $218 billion, with sales growth at 13.8 %.
To begin with mentioning a brief summary regarding the Wal-mart store and their corporate strategy.
Wal-Mart has four parts to their corporate strategy.
2.4 Is Dollar General Really Thriving with Minimal IT?
1. Can Dollar General survive with minimal IT? Support your answer?
Yes Dollar General can survive with Minimal IT. Wal-Mart had revenues of $191 billion. Wal-Mart's 2002 sales topped $218 billion, with sales growth at 13.8 %.
To begin with mentioning a brief summary regarding the Wal-mart store and their corporate strategy.
Wal-Mart has four parts to their corporate strategy.
- Dominance in the Retail Market
- Expansion in the U.S. and International Markets
- Creation of Positive Brand and Company Recognition
- Branch Out into New Sectors of Retail
The Dollar General stores profit rates are very high per store compared to the shrink rate i.e. (3%) of the sales . many of the Dollar General stores were situated in the rural areas in the south and Midwest, here power cuts were frequent. The wide penetration of IT in such a situation would require time, training of the staff involved and an overall environmental change, which requires huge investment.
The Dollar General can survive on basic sales tracking as they have a good warehouse management and logistics software which requires limited IT interference.
During distribution there is a small loss (3%), but that 3% is for 7000 stores is a minimal shrink loss.
The core competency of Dollar General Stores is Cost leadership; they provide customers high quality and brand name products at the lowest price, by eliminating the middleman. If IT infrastructure creeps into their business their core strategy of cost leadership may get ruined and thus the business may incur loss.
With minimal IT the Dollar General is doing good profit with minimal shrinkage rate and thus it can retain the same.
2. You are the CIO of Dollar General. Should you expand IT functions at your stores? Which one should you add, if any?
Being the CIO, I would like add employee verification and stricter rules for recruitment of an employee. If this does not solve the issue of shrinkage due to theft then more stringent rules should be imposed such as making the inventory control manager responsible for the loss, this would create a more regulatory system.
Creating a hierarchy within each store where the responsibilities of each employee is clearly defined can solve many problems.
By-
Raksha.Jagadeesh
1MS07IS078
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