Lowes Marketing Analysis Example

Question One:

Swot Analysis:

Strengths:

Strong distribution network, lowes has a network of 15 distribution centers that support its flatbed products. These types of products are lumber, plywood, boards.

Strong Brand, Lowes created a do it yourself brand that offers everything from renting tools, in store help on building projects to cheap or under market prices, to transporting goods right to your house. 

High level of customer satisfaction, Lowes is 830 ranks highest in customer satisfaction among appliance retailers. This high ranking is the  sixth time in the past seven past years.

S&P 500, Lowes ranks No. 2 in IBD's Retail/Wholesale-Buildings Products group, while growing 15.3 percent and competitors are only up 6 percent. 

Weakness:

Organization structure is only compatible with the present business model. Lowes isn't showing much or sharing about the future in 3-D printing, especially when 3-D printing is growing larger and larger every day in the construction industry.

Days inventory is high compared to the competitors, Lowes DSI is 93.75 over the past 10 year which is on the high side. This could be for many reasons like poor sales performance for the market. Or the purchase of too much inventory. Or even the market is doing badly where people don't have money for home improvement projects. 

Global limitations, Lowe's operates all over North America but hasn't expanded to anywhere else in the world. With also having issue shipping to other countries other than America, Mexico and Canada. 

High attrition rate among the workforce. Employees have come forward with the questions of the high turnover rate. Some issues are because  they employ thousands of seasonal workers for short periods of time.

Opportunities:

Online presents to gain new customers, Lowes offers online shopping with shipping and delivery. Lowes makes it very easy to order anything around North America and get it shipped to a store near you with a tracking number to make you know exactly when you are going to receive it. 

Decreasing the cost of transportation, Lowes has many distribution centers all around America to bring the cost of shipping and delivering to different parts of the country. With these savings are passed down saving to the employees and customers. 

stable cash flow, Lowes had 9,258,000 million cash flow on hand at the beginning of 2021. With this much money they can invest in making the jobs easier and better products. 

market development, WIth the age of the internet it is becoming easier and easier for people to do jobs by themselves. People can look anything up on the internet and figure out what they need and how to do it. Making their self home improvement model work in their favor. 

Threats:

Shortage of skilled labor workers. 89 percent of contractors have trouble finding skilled workers. Another factor in the current labor shortage is a growing demand by workers for better working conditions.

Competition, biggest competition for lowes is The Home Depot and menards because they sell just about the same items as Lowes. Some other competitors are Target, Costco and walmart.

Increase in the cost of raw materials. With the effects of covid-19 prices of everything have sky rocket. One thing that rose over 500% was the cost of wood and Lowes main items is wood. 

US Housing Market, In today time the housing market is falling and when that is mixed with the price of wood no one is making or selling houses. When this happens Lowes lose money because they are not selling home improvement items. 

Overall conclusion is that Lowes is one of the greatest companies in this field and has far more strength and opportunities and weaknesses and threats. If this company contitunes to go in the right direction this company could last for hundreds of years down the road. 

Goal one- invest into the development and understanding of 3-D printing and how you can bring it into your stores. 

Goal two- invest into training and finding skilled labor workers.

Goal three- invest into bring Lowes into other countries outside of north america.

Question Two:

Internal Factor Matrix and analysis for Lowe’s:

Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate a firm's internal environment and to reveal its strengths as well as weaknesses.

Strengths of Lowe's — Internal Strategic Factors:

Successful track record of developing new products, Lowes is alway creating new tools, appliances, building supplies, carpet, bathroom, lighting and more.

​​High level of customer satisfaction by offering surveys is a customer and guest satisfaction survey, they are able to track these percentages and numbers.

Strong distribution network Lowes has a reliable distribution network that can reach most of North America. 

Strong Free Cash Flow, Lowes have plenty of cash on hand to provide resources to expand into new projects.

Good Returns on Capital Expenditure- Lowes new projects create returns on capital expenditure by creating a new way to make money for the company. 

Weakness of Lowe's — Internal Strategic Factors:

Business cycle performance, Lowe’s operates in a highly cyclical business. Due to the seasonality of North America there are times where sales drop because people aren't outside working.

Market share, Lowes has become less and less known than their main competitor Home Depot. Lows have been growing at a slower growth rate over the long term.

Organization structure, This is well known that Lowes has some issues expanding and selling products worldwide and they need to change the structure that they go by if they want to stay competitive.

Need additional investment in new technologies. Lowes need to invest into new technologies like 3-D printing and other areas because their technologies aren't at the same level with other companies.

To promote the merchandise, Lowes needs to run more ads and make their product more appealing to people who don't know much about home supplies to educated people.

Overall analysis and recommendations for Lowes is to keep creating Capital Expenditure and find new ways to promote merchandise and investe in new technologies.

Question Three:

A Culture of Caring is a mindset at Lowe's and a symbol of our progress. As a leader in the retail industry, Lowes feels that they need to set an example for current and future companies and take social and ethical responsibilities and hold itself accountable to all of its actions. On Lowe's website they state “At Lowe’s, we value the unique perspectives and experiences of our associates and customers and are committed to fostering an inclusive culture that enables everyone who touches our business to thrive and contribute to our success. We believe that a respectful and supportive environment creates an engaged and empowered team who is committed to delivering results for the business.” This gives a good understanding of what they stand for and want to achieve in their day to day operations.

Question Four:

Hr management- With Covid-19 effect all of the business world wide you can't expect a change in the HR management and how they run things. But Lows has a history of lacking in this field. Former employees state that Lowes is lacking in loss prevention, maintenance, and assembly associates. Even when it comes to scheduling, employees are not happy. 

Technology development- Lowes is also known not to have the best up to date in technology development. Some examples are their website, new price management system, smart mobile devices, and new customer-centric labor scheduling system. This doesn't seem to affect their sales as they rose net sales 28.3% to $22.3 billion in 2021. But these are big issue that the company needs to look into 

I recommend that they hire people to look into these two categories and see what they can improve on for the future because if ex-employees are stating these are the reasons they left the company this could fix their high turnover rate. 

Question Five:

From the information about the most important short term issue is shortage of skilled labor workers. This issue can be solved by hiring people without the skills and spending more on training them. As a company like this, you wouldn't want to do this with all the communication and knowledge that is needed to know but it can be solved by training.

The most important long term issue is technology development. With how many issues this company is having in not improving in this area this could be their biggest downfall. 3-D printing is the newest technology and could replace wood and other materials within the next 20 years. This field is improving by the day and companies are already coming out with prototype 3-D houses and if wood gets replaced by this sales would drop fast.