99 Cents only Stores

Leading retailersFirst opened in 1982 and has nearly 300

retail locationsCarry general merchandise including food

and beverages, health and beauty aids, cleaning supplies, etc…

INTRODUCTION…

Covers an area of over 22,000 square feet.4.3 million dollars of net sale per storePresently, the total sales are much over $1

billion

FINANCIAL ASPECTS

Targets 25% growth every year.Texas has the largest number of stores

launched in 2004.The stores are serviced by a strong

backbone of a 741,000 sqft distribution center worth $23 million.

MORE DETAILS

Despite opening 38 new stores in 2003, the IT budget didn’t surpass $5 million because the company’s founder and chairman resists computer technology…

CHALLENGES

Adams evaluates actual cost versus business value to the company of every initiative, whether it involves technology, real estate, or the melding of the two. Because Adams has a programming background, when it comes time for the company to deploy a new system, he can effectively weigh the cost of purchasing software off the shelf against the cost of writing the software code himself or with his IT team

KEY IDEAS

Greatest challenge: Launching a new distribution center

Time constraints were strict Final conclusion: Find a warehouse

management system that was totally customizable

Towards Transformation

A system that would lock out such shipments because of inflexible rules would be a hindrance to the business.

Adams found the flexibility he needed in HighJump Software's Supply Chain Advantage software.

HINDRANCES

The Supply Chain Advantage system is designed in such a way that users can make changes themselves instead of relying on IT specialists, the vendor, or outside sources to upgrade and manage the system. This is especially important to Adams, who likes to avoid recurring costs that can drain a company's budget.

ADVANTAGES of Supply Chain

The Supply Chain Advantage package includes a warehouse management system, Warehouse Advantage, that tracks the status of every product during its time in the warehouse…

Warehouse Advantage…

The Supply Chain Advantage software module called Yard Advantage manages the company's delivery trucks, directing them to the proper locations for loading or unloading and monitoring the inventory that each truck is carrying. Customer Service Advantage creates a portal that employees at 99 Cents Only Stores retail locations can use to check on scheduled shipments

Future aspects…

Question : 1

Analyze 99 Cents Only Stores using the value chain and competitive forces models.

99 store use value stores and its major competitors are Big Lots, Inc., Wal-Mart Stores Inc., Dollar Tree Inc. the value chain store for 99 store is very good. The company decision in purchasing high jump supply chain advantage for its advantage for its new distribution center will help them to solve the issue they have with new issue .

Competition99 Cents Only vs. Comparable Dollar Stores

99 Cents Only is a discount retailer that competes with other stores that have similar business models. Thus, the company faces direct competition from dollar-store chains, such as Family Dollar Stores (FDO) and Dollar Tree Stores (DLTR) , that sell many of their products at or around $1.

99 Cents Only vs. Big-Box Sellers

As a discount retailer, 99 Cents Only faces significant competition from big-box sellers like Wal-Mart Stores (WMT) and Target (TGT), whose enormous scale allows them to extract value in their inventory purchases and pass these savings on to consumers.

Question 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’ business strategy is to extend their business as much as possible. They are targeting higher income group also because every person wants to save his money. And higher income group people will buy in bulk so the profit margin will be better in that case. 99 cents only has a potential to support more than 400 stores so they can open new stores across USA. In 2004 half of their stores were opened in Texas only.

Broad selection of available goods Food & Grocery 55% Household and housewares 14% Health and beauty care 10% Hardware 3% Stationery and party 5% Seasonal 4% Others 9%

Src: securities and exchange commission, USA

Strong Long-Term Supplier Relationships Store Location and Size

Key traffic areas Uniform format

Advertisement $5.5 million 0.4% 2011 $4.1 million 0.3% 2010 $4.4 million 0.4% 2009 Print Media

Src: securities and exchange commission, USA

Marketing Strategy

Role of information technology Significant investments in a variety of

infrastructure, data management, and process improvement projects

High speed wireless data backup lines Financial, accounting, human resources, and

payroll data processing using Lawson Software HighJump Software for Supply Chain Management Online shopping site.

Question 3

How effective is 99 Cents Only Stores' strategy for IT infrastructure investments? Explain your answer.

Using information technology(IT), but on a budget. despite opening 38 new stores and beginning operations in the new distribution center the company's IT budget did not surpass $5 million.

He self resists computer technology in his own office. He uses Radio Shack TRS-80 personal computers to

the business in the 1980s Adams has a programming background, self write

code for his software which reduces the cost of software.

High Jump :The High Jump package addressed related to the operation of the new distribution center: quick implementation, high functionality ,adaptability, and interoperability with the advanced automation technology of the new distribution center

Yard Advantage: It manages the company's delivery trucks, directing them to the proper locations for loading or unloading and monitoring the inventory that each truck is carrying.

Question 4:How successful have 99 Cents Only Stores' strategy and use of information systems been in addressing the company's problems? What kind of problems can they solve? What are some of the problems that they cannot address?

With the new software company will be able to meet its requirements of RFID and voice based inventory system which will enable them to work more efficiently and reduce the time lag in displaying products in the stores.

Some of the issues which are difficult to handle are the implementation of new software successfully and training of employees because distribution center is working in 3 shifts and its difficult to give training to them separately.

Thank You!