Lowes Companies, Inc. Case Study

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Home Renovation Retail Industry – Risks And Opportunities
The situation for home improvement retailers is hopeful. Globally, the home improvement retail market is currently around $500 billion and is anticipated to arrive at an estimated $1,959 billion by 2017. (1) Due to the resources necessary to penetrate the industry, there is a low likelihood that a large competitor would enter the market. In addition, the overall industry has been relatively flat since the economic slump. Currently, the three key home improvement retailers comprise of Home Depot, Lowe’s and Menard’s. The large retail chains account for the majority of sales within the industry. (2) Home Depot is the largest company with Lowe’s coming in second. Customers include professional contractors and general retail purchasers. Because contactors buy on a consistent basis and in bulk, they are the main source of revenue for these chains. Companies like Home Depot and Lowe’s tend to incentivize contractors to stay loyal by giving them special bulk pricing. On the other hand, retail customers are less frequent, yet necessary. Retail customers will be drawn to the best overall experience, so the pressure remains high for these companies to offer low prices while providing exceptional service. Brand loyalty can be found in this industry, but customers are mainly driven by competitive pricing and superior customer service. (2) There are numerous opportunities within the home improvement retail industry. Most countries have not been deeply penetrated, and because of this, the global market has enormous promise. Lowe’s has fallen behind Home Depot in the international market, specifically in Mexico and Australia. (2) In addition to growth in global markets, numerous other factor seem to have the potential to create expansion. Some positive factors include but are not limited to the increase in overall population, urbanization, the growing middle-class, and the swell in households with dual...
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