1. Family Dollar Laura Rogers Finance Spenser Hooks Marketing Devin Fedorchuk General Business

2. Outline Mission/Vision Internal Assessment External Assessment Strategy Formulation Strategy Implementation Conclusion

3. Current Mission For Our Customers: A compelling place to shop. . . by providing convenience and low prices For Our Associates: A compelling place to work. . . by providing career opportunities and rewards for achievement For Our Investors: A compelling place to invest. . . by providing strong financial returns

4. Improved Mission Components Customers Products or services Philosophy Concern for survival, growth, profitability Markets Technology Self-concept Concern for employees Concern for public image

5. Improved Mission At Family Dollar, we strive to bring the best to our customers, offering them everyday items at everyday low prices (1). We seek to meet our customers’ basic needs, providing them with common household products, including but not limited to basic food items, household supplies, health and beauty products, and basic clothing items (2). At Family Dollar, we are not just about profit; we are about providing affordable basic consumer goods to families of all income levels (3). Family Dollar continues to pursue steady continued growth to meet the needs of our customers and to maximize the returns to our investors (4). We currently operate 6,600 stores in 44 states in the U.S. We are seeking to expand our services beyond the country’s borders into other parts of North America and eventually open stores on other continents as well (5). At Family Dollar, we strive to continually implement new and improved technology to our stores to better satisfy and meet the needs of our customers in this ever-changing world (6). Family Dollar will continue to use competitive technology and efficiency to maintain and expand a competitive position among discount stores (7). Family Dollar seeks to serve our community by providing our employees with job security, competitive compensation, an attractive benefits package, strong leadership, and opportunities for growth, rewarding those with a high standard of excellence with good incentives for strong performance (8). As a company, we also seek to better the lives of families with low income not only by providing them with affordable products but also through contributions to non-profit organizations that meet their needs through free giving (9).

6. Vision Current Vision Statement To be the best small-format convenience and value retailer serving the needs of families in our neighborhoods. Proposed Vision Statement To provide a wide array of items to our customers, giving them the best value at competitive prices.

7. Internal Assessment

8. Current Financial Ratios

9. Current Financial Ratios (cont.)

10. Current Organizational Chart

11. Improved Organizational Chart

12. Positioning Map

13. Web Site Comparison

14. Value of the Firm Stockholders Equity $1,254,083,000 Net Income x 5 $1,165,365,000 (Share Price/EPS) x Net Income $4,435,162,378 Number of Shares Outstanding x Stock Price $ 4,717,374,900 Method Average $2,892,996,319.50

15. Strengths Family Dollar sells essential items with relatively inelastic demand. Family Dollar’s gross profit margin is 2.8% higher than the industry average. Family Dollar accepts Food Stamps, making it more convenient for lower class customers. Family Dollar's leverage ratios average 32% less than the industry average. Family Dollar raised its dividend for the thirty-third year in a row, from 8.7% to 12.5% last year. Family Dollar’s total assets turnover is 24.8% greater than the industry average. Family Dollar’s return on assets is 1.84% higher than the industry average. Family Dollar’s return on equity is 4% higher than the industry average. Approximately 90% of Family Dollar's products are priced at $10 or less. Family Dollar's stock has outperformed the Retail industry for the past year.

16. Weaknesses Family Dollar does not do much advertising. Family Dollar is currently restricting its market by not having any stores outside of the U.S. Family Dollar’s market share fell from 1.85% to 1.75% in 2008. Family Dollar does not have stores in every state. Family Dollar’s earnings per share is only 72% of the industry average and is not growing as quickly as the industry average. Selection and variety of products offered is relatively low. Family Dollar’s sales have only increased by 2.18% over the past year compared to the industry’s average 5.31% sales growth. Family Dollar is behind the times in technology. Family Dollar’s quick ratio is significantly higher than the industry average. This could indicate a lack of long-term investments. Family Dollar’s long-term debt/equity ratio is only 31.4% of the industry average.

17. IFE Matrix

18. IFE Matrix (cont.)

19. External Assessment

20. Major Competitors Wal-Mart Dollar General Dollar Tree

21. Market Share

22. Market Share Excluding Wal-Mart

23. Competitive Profile Matrix (CPM)

24. Opportunities Middle-class people are more carefully budgeting their income. The average household income in the U.S. decreased nearly 10% in the last two years. Demand for low-priced items is growing. The value of the dollar is falling. The unemployment rate is 8.5% and growing in the U.S. Fourteen million U.S. households use Food Stamps. The Federal Discount Rate has fallen to 0.5%. Real estate prices are expected to fall 15 to 20% below their peak in mid-2007. Diesel prices are expected to fall in 2009 and 2010. Consumer frugality is expected to outlast the recession, with spending growing at an inflation-adjusted rate of only 2%-2.5%.

25. Threats Online shopping is becoming more popular. Rising fuel costs may increase the cost of Family Dollar’s business. The economy may improve. Inflation may force prices to be raised. Stigma of “Low quality, low price.” Wal-Mart has a 94.81% market share among discount retailers. Wal-Mart already has 318 stores in Canada and 1,203 in Mexico. Customer perception that Family Dollar is for low-class people. Increasing consumer expectations may make it harder for Family Dollar to satisfy customers. Turmoil in the stock market may cause Family Dollar’s stock price to fall.

26. EFE Matrix

27. EFE Matrix (cont.)

28. Strategy Formulation

29. SWOT Matrix

30. SWOT Matrix (cont.)

31. SPACE Matrix

32. SPACE Matrix (cont.)

33. SPACE Matrix (cont.)

34. BCG Matrix

36. IE Matrix

37. IE Matrix (cont.)

38. Grand Strategy Matrix

39. QSPM

40. QSPM (cont.)

41. QSPM (cont.)

42. QSPM (cont.)

43. Recommendations

44. Strategy Implementation

45. EPS/EBIT Analysis

46. Income Statement

47. Balance Sheet

48. Balance Sheet (cont.)

49. Projected Financial Ratios

50. Thank You for Your Time