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  • February 2010 (Revised June 2022)
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Dollarama Inc.

By: Andre F. Perold
  • Format:Print
  • | Language:English
  • | Pages:13
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Abstract

Dollarama is the leading operator of dollar stores in Canada. The firm performed extraordinarily well after a leveraged buyout in 2004 and recently executed a highly successful IPO. The company sources its goods primarily from Asia. It has strong brand recognition and competitive advantages in operations, purchasing, and merchandising. In the face of margin pressures, Dollarama recently took the risky decision to move from the single one-dollar price point to multiple price points. The additional price points offer some flexibility, but customers' appetite for purchasing products priced above one dollar has yet to be fully determined. Dollarama is on a fast growth track but remains chiefly concerned about its vulnerability to supply disruptions and to increases in merchandise costs from higher input prices. The firm appears quite overvalued based on a multiples analysis but considerably undervalued based on a discounted cash flow analysis.

Keywords

Price; Growth and Development Strategy; Product Positioning; Supply Chain; Competitive Advantage; Valuation; Consumer Products Industry; Retail Industry; Canada

Citation

Perold, Andre F. "Dollarama Inc." Harvard Business School Case 210-041, February 2010. (Revised June 2022.)
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About The Author

Andre F. Perold

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Related Work

    • April 2022
    • Faculty Research

    Dollarama Inc.

    By: Andre F. Perold
    • February 2010 (Revised June 2022)
    • Faculty Research

    Dollarama Inc.

    By: Andre F. Perold
Related Work
  • Dollarama Inc. By: Andre F. Perold
  • Dollarama Inc. By: Andre F. Perold
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