Swot Analysis

Topics: Lowe's, Home improvement, Home repair Pages: 5 (1568 words) Published: June 9, 2012

The store we all know of today as Lowe’s Home Improvement started out as a single small hardware store located in North Wilkesboro, North Carolina back in 1921. Lucius S. Lowe died in 1940 and left his business to his daughter Ruth Lowe. She eventually sold the company to her brother Jim Lowe. Jim Lowe took on his sister’s husband Carl Buchan as a partner in 1943. In 1952, Jim and Carl had different ideas on company expansion, so they split into 2 companies and Carl Buchan took control of the hardware business. This was the start of the Lowe’s we know of today. The company overview today is demonstrated best from their website, “Lowe's has been helping our customers improve the places they call home for more than 60 years. Founded in 1946, Lowe’s has grown from a small hardware store to the second-largest home improvement retailer worldwide. Lowe’s stores stock 40,000 products in 16 product categories ranging from appliances to tools, to paint, lumber and nursery products. Lowe’s has hundreds of thousands of products available by Special Order – offering everything customers need to build, maintain, beautify and enjoy their homes. Lowe's operates more than 1,745 stores in the United States, Canada and Mexico.”

The first organization strength is “Established presence and efficient merchandising” This is strength because Lowe’s has been in business for 66 years and is the second largest home-improvement company in the world. Every store location efficiently targets the needs of the customers in that specific area of the country. “Lowe’s stores aim at providing ideas to the customers and point of view merchandising displays in the stores which aims at increasing the customer traffic.” This is a strength because Lowe’s is able to build a store specific to the community it resides in. If the need of the community is lumber, the store will have a large lumber yard to support the business in that area. The second organizational strength come from a personal interview I conducted with the store manager, Bob James, at my local store in Manahawkin, NJ. I asked him what an organizational strength of Lowe’s is. His reply was “Lowe’s owns and operates many of name brands that you see offered in the store. Kobalt tools for example are owned by Lowe’s and only offer at Lowe’s. Kobalt tools are an industry leader and a major competitor in the tool market. By owning our own tool manufacturer, it enables Lowe’s to keep prices competitive and offer a quality product for less.” This is strength because there are many tool manufacturers all over the world. In a typical situation, a tool supplier will mark up the cost to generate revenue. In the case of Kobalt, since they own the company, the mark up is much less. The first organizational weakness is “Reliance on third party manufacturers could undermine Lowe’s reputation” “Lowe’s procures its merchandise from approximately 7.000 domestic and foreign suppliers. Since the company procures it merchandise from a number of vendors, it has little control over the product quality.” Lowe’s can minimize this weakness by conducting product testing before introducing the products to the shelves. The second organizational weakness is the vulnerability of financial loss due to fines and penalties for violating state and federal law. “The company has also incurred penalties in connection with the sale of paints and varnishes with high-volatile organic compound (VOC) content. In October 2010, Lowe’s has agreed to pay $2.75 million to settle a case with The South Coast Air Quality Management District (AQMD), the air pollution control agency for Orange County and major portions of Los Angeles, San Bernardino and Riverside Counties.” Lowe’s can minimize this weakness by installing a stronger Compliance Department in their corporate structure. These types of violations should be detected before the products are introduced.

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