99 Cents Only Store

Topics: Value chain, Strategic management, Supply chain Pages: 2 (441 words) Published: July 16, 2008
1.Using the value chain and competitive forces models analyze 99 Cents Only Stores.

The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter.

The value chain for 99 Cents Only Stores is good. The company’s decision in purchasing High Jump Supply Chain Advantage for its new distribution center will help them to solve the issues they have with new center.

Porter’s Competitive Forces Model
Threat of new entrants: 99 Cents Only Store are 5 times larger than others and their sales are 5 times more than competitors. Considering the investment required entering the market threat of new entrants is low. Industry Competitors: The competition is strong for 99 cents because some of the competitors have better purchasing power then them. Substitute: They are selling generic brands so the substituting products are easy. Suppliers: Suppliers are strong because they are needed to purchase items on lower prices. Buyers: Bargaining powers of buyers is high.

2.Evaluate the current business strategy of 99 Cents Only Stores in response to its competitive environment. What is the role of information technology infrastructure in that strategy?

99 Cents Only Stores intend to increase its presence by opening new stores and extending its reach to even high income areas. Information technology has played a crucial role in growth of the company and investment in purchasing new software to meet their changing needs also shows company’s recognition of its importance. 3.How effective is 99 Cents Only Stores’ strategy for IT infrastructure investments?

The company is very conscious when it comes to IT infrastructure investments and wants to make sure that they could save money if possible and keep budget as low as possible. This policy sometimes wastes time but they have chosen new software which will ease their procedures and they don’t have to change any of their...
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