Professor Jenny Darroch, Spring 2008, Claremont Graduate University, CA Brand Report Card
May 5, 2008
Copyright 2008. Jose H. Montero. All rights reserved.
Brand Report Card: Home Depot vs. Lowe’s
The Brand Report Card, devise d by Kevin L. Keller, is a tool for assessing a brand’s performance by rating brands along ten key traits that Keller believes are shared by the world’s strongest brands. Strong brands possess very high brand equity and the Brand Report Card is one tool to help identify things the brand is doing well and areas for improvement. When done on competitive brands, the Brand Report Card can tell us how our brand measures up to the competition. In this paper I apply the Brand Report Card to The Home Depot and its largest rival Lowe’s, after first describing myself as a shopper.
I enjoy making time for fixing things around the house and home improvement projects. I guess I have been a handyman and tinkerer of sorts most of my life. As a child one my most memorable past times was taking things apart in an attempt to repair or discover how things work, while helping dad with house projects was usually fun and educational. As a homeowner and dad, doing home projects and repairs with the guidance and supplies from my favorite home improvement center is one of my favorite past times.
Once a shopper of local hardware stores and places like Sears, in the last thirteen years I have become a fairly avid and loyal customer of The Home Depot. While I had heard through my prior job about Lowe’s operations in Canada and the Midwest, it was not until the past few years that I witnessed the establishment of Lowe’s stores in locations not too far from my favorite Home Depot stores. As I watched Lowe’s stores under construction, I viewed these invaders with mild resentment, intrigue and distrust. How could Lowe’s come into Home Depot’s turf, our turf, and set up shop as if they were the only game in town? As the Lowe’s stores opened I observed the vibrant colors and presentation of the store building, well lighted parking lot, and of course steady flow of customers. Somehow, little by little I began to admire Lowe’s with both curiosity and a sense that I was perhaps missing out on something. Founded in 1978 Home Depot, a member of Dow Jones Industrials and the S&P 100 and with over $77 Billion in annual revenues, has grown to become North America’s largest chain of Home Improvement stores. Home Depot operates 1950 The Home Depot stores and 34 Expo Design Centers in the United States, and 244 stores spread among Canada, Mexico and China (finance.yahoo.com). Despite this success, the “You can do it, we can help” home improvement company has recently decided to close 15 under performing stores and cancel plans to open 50 new stores in 2008 (SeekingAlpa.com). While The Home Depot is pulling in the reins on growth, its closest rival Lowe’s is poised for continued expansion.
Hot on Home Depot’s heels Lowe’s is the number two retailer in the home improvement industry. Lowe’s, founded in 1952, operates about 1500 stores throughout the U.S. and Canada. Lowe’s had $48 Billion in sales the last four quarters (finance.yahoo.com) and is continuing to open 140 new stores in 2008, along with future plans for an additional 900 locations, 400 of which are already approved (www.fool.com).
Presently I shop at both Lowe’s and The Home Depot with a preference for The Home Depot. While my first visit to Lowe’s came about simply because the Lowe’s store was a little closer, I severed my complete loyalty to The Home Depot after many favorable experiences with the Lowe’s brand. While I still feel an obligation to shop at The Home Depot to support and protect the big box home improvement center that was there for me long before Lowe’s showed up, my bond toward the Home Depot brand has weakened considerably; especially after often...