| Our firm - Chiu & Weisserman LLP has been appointed as the new auditor of the public company Dollarama Inc. for the current fiscal year-end as at January 29, 2012. Please find in the following pages a report on the audit plan that was used to conduct our audit for the year ended January 29, 2012. Even though the audit of 2012 was performed by PWC, the assumption used for this project was that our firm was the new auditor for 2012.
Please do not hesitate to contact us if you have any questions.
June 12th, 2012 …show more content…
Buyers are powerful when they purchase a large portion of industry’s total output, product sales accounts for significant seller annual revenue, low switching cost to other industry product, and when industry products are undifferentiated. The bargaining power of buyers is low in this industry, as customers are attracted by the low prices. As long as Dollarama is able to maintain its merchandise at a low price it will keep its loyal clientele. If Dollarama increases its prices compared to its competitors, it will then certainly see a decrease in sales, as its customers will leave for its competitors, such as Dollar tree. With the recent recession, Dollarama was able to expand its customer base, as more people were decreasing their purchase of higher margin products for lower margin products, in order to save money.
5. Bargaining power of suppliers
Bargaining power of supplier can also affect an industry just as the buyers can. Suppliers are powerful when there are few large companies and more concentrated than the industry to which they sell. When there are no substitutes, supplier’s goods are critical to buyer’s success. High switching costs due to effectiveness of supplier’s products,and threat of forward integration are factors to consider. At this time it is difficult to assess the bargaining power of the suppliers as all products that arrive from China, and the lack of information for the agreement that Dollarama has with its supplier(s). For