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Product cover image for Dollar Tree: Should It Divest Family Dollar?

Dollar Tree: Should It Divest Family Dollar?

Saurabh Bhattacharya, Arpita Agnihotri

Product #:W40145
Supplier:Ivey
Discipline:Strategy
Setting:United States, 2024
Details:Case (PDF) • 7 pages • 2025-01-24

Subjects:

Leadership and managing peopleManagement

Industries:

Goods, trade, and consumer services

Geography:

United StatesNorth America
Your Price:$10.54

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By May 2024, Dollar Tree Inc. (Dollar Tree), led by Rick Dreiling, was receiving criticism from stakeholders for Dollar Tree’s failed integration with Family Dollar Stores Inc. (Family Dollar) owing to net operating losses. It had acquired Family Dollar in 2015 for US$8 billion. In early 2024, after strategic evaluation, Dreiling decided to close 1,000 Family Dollar stores. Analysts suggested that Dreiling would need to make a call on divestment steps for Family Dollar, referring to it as a “problem child” for Dollar Tree. While Family Dollar’s gross profit increased between 2022 and 2023, it reported net losses. Should Dreiling divest Family Dollar? If so, what strategic options does he have for divestiture? How can Dreiling ensure the growth of Dollar Tree?

Learning Objectives

The case is intended for undergraduate- and graduate-level courses on strategic management, business strategy, and corporate strategy. Acquisitions and divestments are the most common topics in strategic management and business strategy textbooks. An instructor can use this case study mid-course, after they discuss essential business or competitive strategy concepts. Corporate strategy textbooks usually cover such topics in the beginning, so if the instructor is teaching corporate strategy, they can discuss the case during the first three weeks of the course. After working through the case and assignment questions, students will be able to accomplish the following objectives:
  • Explore whether a firm should pursue divestment for a failed acquisition or try to make the acquisition work.
  • Examine strategies a firm may use for divestment of an acquired firm.
  • Explore possible growth strategies for a firm.
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Case Study: Dollar Tree: Should It Divest Family Dollar? (English version) | Ivey Publishing