Page 1: Introduction
Growth is an important business aim. Growth enables a business to maintain a sharp competitive edge compared with rivals, and to benefit from other advantages such as lower costs and greater brand awareness among consumers.
This case study examines how the Dixons Group has maintained an ongoing growth strategy by piloting new store formats and entering new markets. It looks at the development of a new large retail outlet format (Dixons xL) in the UK, and at the launch of Electro World in Eastern Europe.
Dixons Group plc is Europe's leading specialist electrical retailer with 1440 stores in 12 European countries. The company employs 30,000 people, with a profit of £301 million from a turnover of almost £5.8 billion (year to 3/5/03).
A key part of Dixons' success is its emphasis on researching customer requirements, and meeting and exceeding customer expectations. This focus is illustrated by the Group's promise: 'We aim to provide unrivalled value to our customers by the range and quality of our products, our competitive prices and our high standards of service.'
The Group's objective is 'to create value for our shareholders, career opportunities for our employees and the best possible value and service for our customers.'
The Dixons Group is made up of a portfolio of leading UK and international brands designed to give customers the highest level of product specification, choice and customer service in the targeted market segment. In the UK, it has a number of main brands.
- Dixons: the home of new technology - a High Street retailer of consumer electronics, selling the largest range of products including TV and personal computers.
- Currys: the UK's largest electrical retailer. The product range includes fridges and other domestic appliances.
- PC World: Britain's largest specialist chain of computer superstores offering more than 5,000 product lines.
- PC World Business: a major player in the direct provision of IT products and services to the business user.
- The Link: the specialist mobile phone and communications retailer.
Additionally the Group owns important servicing companies that support its key retail businesses:
- Mastercare: provides state of the art delivery and after-sales service for customers of Dixons, Currys, PC World and the Link.
- PC ServiceCall: is one of the largest technical support businesses providing after sales service and telephone helpline support.
In addition, it has several international brands.
- PC City: a specialist PC retailer, based on the PC World model, with operations in Spain, France and Italy and now in Sweden.
- UniEuro: Italy's most profitable mixed electrical retailer.
- Elkjøp: The electrical retail market leader in Norway and the sole pan-Nordic player with 160 stores across Norway, Sweden, Denmark, Finland and Iceland.
Electro World: a new investment business operating in Hungary and the Czech Republic.
The Group also operates 14 stores in the Republic of Ireland, trading as Dixons, Currys and PC World. In 2002/03, the Irish businesses delivered sales of £61m.