Dollar Tree SWOT and PESTLE Analysis

Strength

1. Leading operator of discount variety stores in the United States: Dollar Tree is one of the leading operators of discount variety stores. Its stores operate under the names of Dollar Tree, Family Dollar and Dollar Tree Canada. The Dollar Tree and Family Dollar have complementary business models. Dollar Tree stores provide everything at $1.00. According to it, convenience and value offered to customers are the key factors which has helped the store grow and retain loyalty. The Dollar tree segment includes 7,505 stores and around 13 distribution centers in the US and 2 in Canada. Dollar tree stores carry on average, over 7,700 items giving the customers a huge variety to choose from.

2. Established position as a low-cost operator: Dollar tree provides all its offerings to the customers at $1.00 and hence it is very important for the store to keep its costs as low as possible so as to maintain the $1 selling price and still remain profitable. So it gives a strong focus on cost control and has establishesd itslef as a low cost operator. Due to its successful purchasing strategy including targeted merchandise margin goals, it categorically enjoys the flexibility in making sourcing decisions. Also its ability to negotiate with vendor partners allows the stores to minimize margin impacts like tariffs. No vendor accounted for more than 10% of total merchanidse purchased in the last 5 years which gives Dollar Tree stores a high purchasing power.

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Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Sustainable and business friendly practices to reduce environmental impact: Dollar Tree is committed to reduce its environmental impact and believes that the most significant environmental impact is from energy use and has undertaken multiple initiatives to combat the same. It has started a multi-year project to convert existing stores from fluorescent to LED lighting which vastly minimises power consumption and heat load, thus reducing energy costs. All new stores which are opened are also equipped with energy-efficient LED lights. Several distribution centers are also being converted to LED lighting. The total power savings from all this conversion equates to almost 290,000 trees planted. Almost 11,800 metric tons of CO2 being saved and 2,270 cars removed from the road. Dollar tree has also been participating in the US Environmental Protection Agency (EPA) SmartWay Shipper Performance program since 2013. Through this it takes steps to advance supply chain sustainability by improving freight transportation efficiency. It also strives to reduce use of plastic bags and encourages customers to select reusable options. In 2019, stores sold more than 11 million ecofriendly bags. As of 2019, it also recycled approximately 545,000 tons of cardboard and plastic in less than 2 years which is equivalent to saving 3.2billion gallons of water, 5.5. million trees and 780 million KW of electricity.

2. Various energy efficient measures adopted in store support center: Saving energy is one of the easiest ways to reduce costs in the highly competitive retail business environment. Dollar tree’s store support center comprises of a 320,000 square foot tower which was completed in 2018. It also consists of 189,000 square foot fully-renovated Legacy building which got completed in 2019. Various energy efficient measures were taken into consideration in this. Here each floor has a self-contained variable air volume handling unit. It uses a direct outdoor air system which reduces the mechanical system operating cost by up to 50% when compared to conventional systems. Much of the energy savings here come from energy recovery process which reduces the total amount of energy needed to fully condition hot air in heating season and cool air in cooling season. The glass windows are coated with low-emissivity coating and argon gas- based cavity which gives high energy performance. It also implements daylight harvesting system in the building with a series of sensors detecting the quantity of natural daylight receiving and then adjusting the amount of artificial lighting needed. LED lighting is installed throughout the facility providing lower energy consumption and less maintenance costs.

The remaining section of “Environmental” is available only in the 'Complete Report' on purchase.