Assignment 6.2

SWOT or Porter's Five Forces Model Five Below is a leading high-growth value retailer offering trend-right, high-quality products loved by tweens, teens, and beyond. Founded in 2002, the company has over 1200 stores in forty states with its headquarters in Philadelphia, Pennsylvania. After twenty years of being in business, Five Below has been able to stay true to its purpose of creating an amazing experience where customers can Let Go & Have Fun with prices so low, they can always say Yes! to the newest, coolest stuff (Annual reports & proxy statements 2021). Top brands that you can find when visiting any of these stores include Disney, Nickelodeon, Marvel, Hershey's, and many more. An important benefit of the company's unique selling proposition is its rapid growth. Thanks to its robust business strategies, Five Below seems well poised for growth. Keeping their focus on providing trend-right products, improving supply-chain operations, strengthening digital capabilities, and remodeling stores will continue to yield solid results for the firm. For the current fiscal year, sales presently stand at $2.98 billion, indicating an increase of 4.7% from the prior year. According to Zach's Consensus Estimate, Five Below's sales and earnings per share (EPS) are currently pegged at $3.56 billion and $5.58 each for the fiscal year 2023. Five Below can continue to grow these revenues through the utilization of multiple marketing channels. Through print ads, TV ads, and social media, Five Below can reach its target audience in other areas. Most of the firm's new customers come in to shop by word of mouth or from visiting a store in a different location. Mastering the art of sourcing merchandise cheaply and selling it cheaply will also continue to benefit this company. Being able to consistently sell merchandise for $5 or less is not easy for a lot of retailers to do. However, Five Below has been able to effortlessly do this by cutting all the costs out of the supply chain to sell the product as close to the source price as possible. For example, if the company wants to sell basketballs, they may go as far as deflating them so that there is less weight and packaging during
shipment. Eventually, this allows Five Below to sell not only fancy gadgets at cheap prices, but also expand their product line. By reinforcing its digital capabilities, the company can make shopping more convenient for its customers. Adding assisted checkout capabilities and partnering with delivery platforms like Instacart helps create an easier shopping experience and gets the customer their products faster. Earlier this year the company announced that it will offer the option to buy online and pick up items on the same day in-store. As the festive season approaches, this will be an effective strategy by Five Below to boost sales and profitability. Five Below remains committed to expanding its store base as well as enhancing the in-store experience to draw traffic and win more customers. One of the company's expansion strategies involves opening a distribution center in a new region. Once that is done stores are then opened close to the distribution center which helps cut back on shipping costs. Recently they have produced a Triple-Double strategy to triple the number of stores by 2030. Last year 171 stores were opened and forty of the current locations were remodeled. This strategy will help double the sales and earnings per share by 2025. Five Below's winning strategy and disciplined growth are the results of their unwavering focus on product, experience, and supply chain. References:
Helpful Harmful Internal STRENGTHS 1. Reputed brands with over one thousand stores are present in thirty-nine states. 2. Diverse product mix and differentiated shopping WEAKNESSES 1. Has had to raise prices in the last year which could lead to a reduction in sales 2. Online orders may be discouraged by fixed and high shipping rates External OPPORTUNITIES 1. Expand to other states and add stores in large cities in the US. 2. Enhance and optimize operating costs Focuses on creating a "wow" customer experience THREATS 1. High competition in the discount retail industry in the US. 2. COVID-19 shutdown forced the company to shut down most of its stores.
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