1) 99 Cents Only Stores is a family-owned chain of one-price stores founded in 1982 that has grown to over 220 stores across the US. 2) The company uses warehouse management and supply chain software to efficiently replenish inventory and avoid under/overstocking. 3) While not on the "bleeding edge", 99 Cents strategically implements proven IT solutions like voice picking to increase efficiency and maintain low prices over competitors like Walmart, Kroger, and Dollar Tree.

1. IT Makes Cents
Prepared & presented by:
ANKUR JAIN (PGDM 12127)
DHRUBAJYOTI SAHU (PGDM 12136)
RHEETAM MITRA (PGDM 12156)
ROHIN GEORGE THOMAS (PGDM 12157)
SHIRON PONNAPPA (PGDM 12167)
VINAY A. HAMASAGAR (PGDM 12177)

2. Case facts
• 99 Cents Only Stores” is America’s
oldest chain of one-price stores
• It has 220 stores across America
• 99 Cents Only Stores, founded
by David Gold, is family owned
• Competitors – Wal-mart, Kroger
• Targets high income people
• Spending on IT/IS relatively small
• The company uses high jump software,
design system for its warehouse and
supply chain management

3. Case facts (contd.)
 One peculiar characteristic of
99 Cents Only stores is that it
is able to replenish 60 percent
of its inventory
 IS has helped company to keep
an eye on its stocks – it is able
to avoid under and over stock
 The company avoids
implementing cutting edge
technologies

4. Background of the company
• The first 99 Cents Only Store opened in 1982 and as of September
3o, 2012 the company operates 302 retail stores including 221 in
California, 37 in Texas, 29 in Arizona and 19 in Nevada
• The company also operates ”Bargain Wholesale” which sells
wholesale to retailers across the United States and exports to over
15 countries
• The stores carry mostly branded general
merchandise, including food and beverages,
health and beauty aids, cleaning supplies,
house wares, hardware, stationery etc.

5. Dollar Store Industry
• Also called variety store or price-point retailer
• It is a retail store that sells inexpensive items, often with a single
price for all items in the store
• Typical merchandise includes
cleaning supplies, toys,
household goods and
gardening equipment
• The $52 billion dollar-store
industry has been rapidly
expanding majorly because
of the increased spending
by the middle class

6. Dollar Store Industry (contd.)
• The industry is concentrated, as these three companies account for
nearly 60 per cent of the retail establishments
• The profitability of companies depends on their ability to effectively
locate stores, to maintain value in the eyes of the consumer
• Barriers to entry are low
• Start up costs are estimated to be about $230,000 per retail outlet*
• Average annual revenue per worker is slightly less than $150,000^
• The industry is highly competitive, as companies must compete
within the industry
• Small companies can compete effectively by filling a niche market or
locating in a previously untapped market
*^http://www.firstresearch.com/Industry-Research/

7. Key facts
• 99 Cents Only Stores raised its top price for the first time in 26 years
to 99.99 cents due to "dramatically rising costs and inflation"
• Dollar Tree, Deal$, Fred's, Dollar General, Family Dollar, Five
Below, Galloway Dollar, Real Deals, and Honks are the competitors of
99 Cents Only Store
• Revenue - $1.30 billion (‘09)
Operating Income - $12.91 million (‘09)
Net income - $8.48 million (‘09)
Employees - 11,500 (‘09)

8. IT/IS-Concept and Strategy
• Selected Warehouse Advantage from HighJump Software
• Customized its functionality for warehouse, yard and event
management, as well as supply chain visibility
• Utilizes the High Jump Warehouse Advantage(WMS) for complete
control of activities occurring from the time products enter the
warehouse until the minute they leave
• For both inbound and outbound operations -The High Jump Yard
Advantage yard management
solution to keep track of trucks
and the inventory they contain

9. IT/IS-Concept and Strategy
• WMS is tightly integrated with a Voxware voice picking system(on
the server) to deliver directed, optimized work instructions to
material handlers
• Uses the HighJump application which streamlines activity flow on
the warehouse floor and results in more efficient truck loading
• The company’s retail locations utilizes
Web-based system to access information
about the status of incoming shipments
visibility tool that gives a high-level
view of facility and workers’ performance

10. IT/IS-Concept and Strategy
• Leverage event management functionality receives notifications of
exceptions/aberrations occurring throughout the supply chain
• Proactively resolve issues such as late shipments that can impact
retail stores adversely
• Computer systems at the
distribution centres and
point of sale register
movements and purchases
at every store

11. Questions
Q1. Is 99 Cents Only on the leading edge of IT? Is it on the bleeding
edge?
• It is still on the leading edge of IT. The company is too small and
traditional to sustain "bleeding edge IT"
• Company integrates proven technologies into it operations. They
prioritize IT projects by ROI gain
• Implements only if it is efficient

12. Questions (contd.)
Q2. What characteristics of the dollar store industry make it so
important to increase efficiency?
• They sell limited inventory on fixed price for one time buy -out.
• IT as a strategic tool to increase efficiency. Warehouse Management
software(WMS) in all distribution centres.
• Maintenance of real time inventory levels and order volumes of
various products.
• Picking and shipping of items right first time(Logistics).
• Merchandise distribution system between warehouse centres and
stores.
• Avoiding overstocks or under stocks.

13. Questions (contd.)
Q3. The company has performed better than its competitors. In terms
of the eight initiatives discussed in this chapter, which initiative or
initiatives has gained it the competitive advantage?
• Reduce costs
• Differentiate and enhance products or services
• Different target neighborhoods

14. Questions (contd.)
Q4. 99 cents must modify its information systems frequently. Why?
• 99 Cents Only does better than its competitors in every measure
important in the retail industry
• IT is an ever changing field as new technologies occupy market every
other day. This usually leads to cost-effectiveness and increased
efficiency for any competitor who opts for the latest IS available in
the market
• Therefore, to retain its loyal customers and to keep being better
than its competitors, 99 cents Only should modify IS frequently

15. Questions (contd.)
Q5. Often, CIOs are frustrated with the time it takes senior
management to support their strategic initiatives and with the
difficulty of earmarking funds of such initiatives. How is 99 Cents Only
different in this respect?
• The Gold family owns about 35% of the company
• David Gold is the Chairman of the Board and his two sons and son-
in-law run the company
• Company is family-run and therefore decisions are made quickly
• Formal meetings are least required. Therefore, the time between
requests and implementations is very short

16. References
• http://www.99only.com/
• http://en.wikipedia.org/wiki/99_Cents_Only_Stores
• http://www.utsandiego.com/news/2012/feb/27/dollar-stores-making-sense/
• http://www.forexpros.com/analysis/thriving-dollar-store-industry-points-to-an-altogether-
different-economic-reality-119001
• http://www.ibisworld.com/industry/default.aspx?indid=1093
• http://www.getyourguide.com/
• http://www.cpaglobal.com/newlegalreview/5252/us_ip_the_fivetrillion_dollar
• http://articles.latimes.com/2011/oct/12/business/la-fi-99-cents-only-stores-buyout-offer-
20111012
• http://www.foodprocessing.com/articles/2004/138.html
• http://www.fdreports.com/
• http://articles.marketwatch.com/2011-01-05/industries/30781468_1_consumable-merchandise-
higher-sales-industry
• http://www.studymode.com/essays/99-Cent-Store-Case-Study-61360.html
• http://www.mightystudents.com/essay/Managament.Information.Systems.94908
• http://www.writework.com/essay/99-cent-only-business-strategy-v-competition