Lowe's Pricing Strategy

Lowe’s entered in the Canada in 2007 and in recent times, it has 34 stores all over the Canada. In addition, Rona is a Canadian based chain that has 79 big box locations and around 700 small stores across the country. Lowe’s has shown interest in acquiring Rona, but it withdrew its friend offer for Rona takeover. Some analysts believe that the move to Rona hostile takeover would be appropriate for the company.

B&B Consulting Services was requested to evaluate, assess, analyze and make recommendations to Lowe’s Home Improvement in the areas of strategy for growth improvement. The following information will give Lowe’s a better understanding of its company and what improvements can be made in the short-term and long-term.

Lowe’s is also full of opportunities that bring success to the retailer in the near future. Not only has there been a huge increase in the demand for do-it-yourself home improvement projects over the past years, but Lowe’s is also planning to expand its company into a joint venture in Australia. This venture across seas opens up a new market in a completely different country. Another opportunity that Lowe’s implements for its large foundation of customers is the idea of free parcel shipping. Consumers are always in favor of saving money, especially when it comes to shipping costs. In recent years, Lowe’s has extended its store hours of operations, allowing customers to visit the store at more convenient times.

ROA is considered the best overall indicator of the efficiency of assets used in a company. Home Depot and Lowe’s ROA ratio both moved down due to the downturn in the industry but Home Depot was able to improve 2010.

Lowe’s is part of an oligopoly type market structure. An oligopoly is a situation in which a particular market is controlled by a small group of firms with at least two firms controlling the market. The main key to behavior in an oligopoly is that companies must take into account what other companies will do. In perfect competition, firms are price-takers and can ignore other firms (Basic Economics, 2009). The home improvement retail stores are an industry that includes Home Depot, Lowe’s, Builders Square, and in other states, Menards.  Smaller companies have to try to compete with them to stay in business.

Lowe’s also offers several development opportunities and resources through the company’s Generous Tuition Reimbursement Program, Certified CPE course offerings, Management Development programs through the Lowe’s Leadership Institute, and skill and competence development courses (“Learning and Developing”, n.d.). The Home Depot continues to give raises, bonuses, and develop and promote employees with good work ethics. Home Depot typically promotes from within the company.

Lowe’s Companies, Inc. is the fourteenth largest retailer in America, and overall the world’s second largest home improvement retailer. They are the 108th ranked corporation on the Fortune 500 top corporations list. With an impressive in store stock of 40,000 home improvement items on hand, ranging from lumber to Home décor items, plus an additional 400,000 home improvement items available through a special order program. Lowe’s provides a onetime stop for all home improvement needs, for both the Do-It-Yourselfer, and the ever-expanding market of the Commercial Business Customer.

This paper gives the reader an insight into how a manager in a competitive industry in a two-firm constant sum game makes decisions. The writer will be playing the role of a Home Depot, Inc. manager, and the major competitor is Lowe’s, Inc. Home Depot is the largest United States (U.S.) home-improvement retailer while Lowe’s is the second-largest U.S. home-improvement retailer. This is significant because what one company does affects the other. To compare the two companies their company profiles were reviewed. The latest news headlines on both companies were

Lowe’s deems that having diversity is key to being a good corporate citizen. Lowe’s has the opportunity to deliver outstanding prices, products and services to their customers. Lowe’s believes that they take it one step farther than any other company. Lowes’ thinks that with community involvement that they extend beyond the traditional retail setting. Like Home Depot, Lowe’s gives back the their community however, they are known to help in natural disaster recovery and take active roles in programs

adopted by various companies to influence the masses towards their products at large is part of their marketing strategy . Offering discounts and

Lowe’s, and other home improvement businesses, serve three types of customers; the Do-It-Yourself customer that is the individual who completes their own projects and installations. The Do-It-For-Me

Lowes is currently involved in all sorts of different initiatives in order to boost sales during this current economic down turn. The first thing the company focuses on is the mindset of the average consumer. Lowes has discovered through lots of research the people basically want five things: balance, control, value, simplicity, and to shop for everything in one trip. In order to accomplish these five things, Lowes has focused on improving its skills in the following three areas: merchandising strategy, merchandise selection, marketing and advertising, and offering higher value at lower prices in order

The company that I have chosen for this assignment and project is Lowe 's Companies, Inc. Lowes strongly focuses on the mission statement “helping the customers to improve their homes”. The company started in 1921 as a small store in North Carolina. Great success and high demand of Lowe’s products led to an increase in the number of stores. By 1955, there were five more functional stores. Rapid growth took place around 1960s. Carl Buchan was one of the founders of Lowe’s, who died in year 1960. Exactly a year later in 1961, the company went public. This was the time when Lowe’s was given its name. Initially it was called North Wilkesboro Hardware Company. By 1979, Lowe’s established more than 50 stores in the United

Sam Walton’s extraordinary business strategies drove Walmart to its success and their key focus was customer satisfaction. As part of their customer centric initiatives Walmart had set up a unique pricing strategy with their “Every Day Low Prices” EDLP (Karen Robson, 2013). They would offer customers their daily needs at the lowest possible price to drive Walmart’s growth in the United States (Karen Robson, 2013) . Their pricing strategy was different than other major retailers in the U.S at the time; this provided an advantage towards rapid success and expansion (Karen Robson, 2013).

It is reported that almost 50% of retailers and 48% of manufacturers use rebates programs as part of their customer loyalty and promotions mix (Group, 2011). To be successful, rebates often call for custom-made