The aim of this strategic profile paper is to analyze the current market position and strategy of Lowe’s, and the several internal and external factors that are affecting the company both positively and negatively. After the current situation is explained thoroughly, this paper will suggest and substantiate strategic alternatives that would positively impact Lowe’s and increase its strategic fit. This paper will answer the strategic question: Lowe’s is the second largest home improvement retailer and the eighth largest retailer in the United States evidenced by the past five years of Lowe’s Companies’ margin expanding, due to an 8.56% average growth in net income exceeding the average revenue growth of 5.15% . What strategy should LOWE’S implement …show more content…
Currently they operate in the United States, Canada and Mexico. According to their News Release, they operated 2,152 home improvement and hardware stores representing 214.9 million square feet of retail selling space overall as of February 2, 2018 . Lowe’s is the second largest hardware chain in the United States and is ranked number 50 on the Fortune 500 list . They sell a variety of home improvement products, tools and décor such as flooring, paint, wood, lighting, kitchen sinks, and much more. They have helpful staff members in their physical stores and from the online stores the customers are able to order certain products or have them delivered. On March 26, 2018 Lowe’s announced that Robert A. Niblock will retire from his position as chairman, president and CEO after 25 years of working with Lowe’s …show more content…
The key activities of Lowe’s such as their effective supply chain management, value added customer experience, selective HR management, seamless omni-channel approach, and sales and marketing all lead towards their current success. These activities allow Lowe’s to perform tailored activities differently from most retail home improvement stores.
Trade-offs different from rivals
Lowe’s deliberately chooses a different set of activities from rivals to create trade-offs that sustain their competitive advantage against other home improvement stores and straddlers . Instead of setting up their store as warehouse style, Lowe’s sets up their products displayed in the store for customers to see while walking through. They are giving up store space, to target and serve their DIY- retail customer segments better rather than the professional service customers . Lowe’s has made the trade-off to frequently restock their stores to serve this type of customer experience and product variety. It is a costly decision, but this creates a risk for straddlers when trying to threaten the competitive advantage of
In the early 2000’s Lowe’s was rapidly intensifying its presence nationwide. The company carried a varied assortment of home improvement products and catered to the needs of retail as well as commercial business customers. Lowe’s expanded their reach by acquiring a 41-store chain, Eagle Hardware and Garden, and engaging in a strategic alliance with HGTV to obtain a more profound existence in their market (Rouse, 2005). By 2004, Lowe’s operated almost 1,000 stores with plans to continue expansion across the nation (Rouse, 2005). The company has a core competency in helping customers meet their home improvement needs at a low price. In order to use this core competency to gain a competitive advantage, the company has focused on key functional strategies. To continue their success, Lowe’s must specifically focus on marketing, logistics, and human resource management strategies.
Lowe’s employs more than 260,000 people in more than 1830 stores; these employees are trained to provide exceptional customer service as well as receiving up-to-date product knowledge to assist customers with their improvement needs. In addition, Lowe’s has upgraded store information technology infrastructure to assist employees in accessing product data faster and easier. This is accomplished by providing the sales team with computers that have Internet access, and Ipad’s and Iphone’s loaded with specialized apps (Lowes, 2014).
Big Box Tool Kit. “Five Myths About Big-Box Retail.” Institute for Local Self Reliance. 2009.
Lowe’s Companies, Inc. is averaging the opening of about two stores per week. This is part of an unprecedented two billion dollar store expansion, which is the most aggressive expansion in the company’s fifty-five year history; thus, magnifying Lowe’s locality and customer convenience in the United Sates home improvement marketplace. Lowe’s new superstores are currently the largest in the home improvement marketplace, averaging a retail space of about 150,000 square feet. (http://www.lowes.com)
J.P. Leggett and C.B. Platt a local entrepreneur from Carthage Missouri started a business partnership in 1883. Leggett was an inventor and Platt was an expert on establishing a manufacturing setup and both patented in 1885 a spiral steel coal beds (Leggett & Platt®,2011). In 1942, Leggett & Platt opens a plant in Kentucky. Harry M. Cornell Jr. became President and started an expansion effort in 1960 and in 1970 Leggett & Platt partners with Armco Steel Corp to construct a wire mill in Carthage. In 1999, the company net earnings reached to 290.5 million by May 2002 Leggett & Platt had evolve from a small regional company into an international Fortune 500 company and establish a contract with Sears (Leggett & Platt®,2011). Roebuck and Co.
Home Depot is built on the principle of creating value for our stockholders while never forgetting our values. We seek to be profitable, responsible, and balance the needs of our communities. Throughout our company, our associates are challenged with finding ways in which we can provide the best products for our customers, provide the best possible work environment for our associates, have a positive impact on the communities in which we operate, and provide excellent returns for our stockholders. Working in a Store Support Center, rather than a corporate headquarters, their leadership team knows that the most important people in the fabric of the company are the store associates and store leadership teams. Frank Blake was appointed as the Chief Executive Officer of Home Depot in January 2007 (Sellers, P.).
It should capitalize on the cost-leadership strategy and improve its customer service to edge out Ace and steal a chunk of its market share. Lowe’s should also seek to negotiate for favorable contracts with the major Australian suppliers on a cost-advantage level and thus increase its bargaining power. Moreover, such a strategy would create an entry barrier for Australian start-up competitors who might seek to use their home advantage to outcompete
Opening its doors for the first time in 1946, Lowe’s is now the second largest home improvement chain in the world, operating over 1,800 stores in the United States, generating $56.2 billion in sales and $2.6 billion in net income for 2014 (Lowes Newsroom, 2015). Employing around 265,000 personal making them one of the top employers in the nation, there is no question that Lowe’s must be doing something right. According to Lowes Newsroom, “Lowe’s professional customers represent approximately 30 percent of total sales, approximately 16 million retail and professional customers are served each week. (2015, para 3) “Never Stop Improving”, is Lowe’s slogan; encouraging employees and customers to work together to maximize their in store
(Reingold, 2014) Nardelli had a hard edge and was driven by the numbers, whereas Blake preferred a management style of a service culture. He wanted engaged employees who excited customers with their knowledge of the latest tools and products available for purchase. He wanted to dominate the professional contracting business. He realized that employee morale is an important factor in the retail business. “He slowed store growth to focus on quality over quantity.”(Reingold, 2014) He spent money to train associates. He was determined to build a sense of pride among the associates. He felt that the training would provide for better customer service.5 Blake believed that customer service was the key to Home Depots ability to succeed. (Aluise,
The Lowe’s organization has long been successful in reaching its broad based customers through national television, radio announcements, newspapers, magazines, direct mail, emails, and the internet.The organization is seeking to gain more consumers through Multicultural marketing outlets to reach even more customers. Their ads are designed to promise a broad product selection and tout their pricing strategy. Lowe's tag line is "everyday low price (EDLP)" which is their pricing strategy that promises customers everyday low pricing without the need to wait for sale price events or comparison shopping. EDLP to a pricing strategy in which a retailer offers its customers consistently low prices on every product, without running sales or price promotions. The store sets prices fairly and then maintains them for a long time,
By being a customer oriented company Lowe’s uses the information that is given to them to help build upon their great reputation. To help show that Lowe’s is willing to help others they continue to help with disaster relief not only by donating money and supplies but also help rebuilding. Compared to its rivals I am certain that Lowe’s will be able to carry out its goals and missions. With having one of the best customer service programs in its market Lowe’s does its best to not only help its customers out as a whole but also on an individual level. Lowe’s will continue to grow across the nation to ensure to help you with your every home improvement need.
On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection becoming the largest retailer ever to do so in U.S. history. Most industry analysts attributed the immediate cause of the company's bankruptcy filing to a dull holiday season and stiff competition from WalMart and Target as the chain's more fundamental problem. But competition wasn't the root cause of Kmart's consistently poor performance. The real reason for Kmart's poor performance is that Kmart never had a marketing strategy. Kmart completely misunderstood its market and was positioning itself in the wrong direction. Also, on the strategic side, there are issues of where stores were located. On the whole, Kmart stores did not seem to be sited as well as the stores of the competition. Then there was the issue of technology. While Wal-Mart was becoming the relentless efficiency engine that we know today by investing in technology and streamlining the supply chain, Kmart held back. As Wal-Mart developed an infrastructure that enabled it to lower prices, Kmart slipped into a price disadvantage. This paper discusses these strategic problems that led to Kmart's poor performance.
CEOs Quinlan and Greenburg did more to try diversify the product line by purchasing other chains and introducing new items instead of placing the emphasis on making sure the fundamental elements of service, speed, and quality of its primary product line. Quinlan made matters worse by stopping the practice of inspecting the stores to ensure they met the required standards of speed, quality, and cleanl...
Sears has seen many different changes in business and has had to adjust to t...
When analyzing an organization’s target market, the first step is to understand the business and what they hope to achieve through their marketing strategies. Targeting and positioning strategies consist of analyzing and identifying segments within a given product-market, choosing which segment or segments to target, and developing and implementing a positioning strategy for each targeted segment (Cravens & Piercy, 2009). The company’s target market determines what customer group or groups the company wants to serve (Cravens & Piercy, 2009). Analyzing IKEA’s target market allows the company to determine if their marketing strategies have successfully targeted their intended customer group or groups. Discussing the company’s positioning strategy helps determine if the strategy is effective or if the company must make improvements strengthen their positioning strategy. The company must determine if their targeting and positioning strategies may be lacking. If the company’s targeting and positioning strategies are lacking, the company must determine what they must do to strengthen their targeting and positioning strategies.