Lowe’s Essay

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Lowe’s (Lowe’s Companies, Inc.) is the world’s second largest home  improvement retailer  (after The Home Depot, Inc.). It focuses on retail customers  and commercial business customers.  Lowe’s offers a complete line of products  and  services for  home  decorating, maintenance, repair, remodeling, and the maintenance of commercial buildings. Lowe’s is a North Carolina–based  company, incorporated in 1952, and now employs around 160,000 people (as of January 1, 2008). Its headquarters is located at Mooresville, North Carolina. Lowe’s is quoted on the New York Stock Exchange with the ticker symbol of LOW. It has approximately 32,000 shareholders (as of January 1, 2008).

Lowe’s and  its  subsidiaries  (Lowe’s HIW,  Inc., and  Lowe’s Home  Centers,  Inc.)  operate  as home improvement retailers in the United States and Canada. It is doing business in 1,534 stores throughout the United States and Canada in two different types of stores: a 117,000-square-foot store for bigger markets and a 94,000-square-foot  store  for smaller markets. The company’s  stores  stock hundreds  of thousands of items such as paint, lighting, flooring, doors, windows, and tools, and all are available through  its special order sales system.

Lowe’s  targets  three   different  types  of  customers: retail do-it-yourself  customers  (i.e., homeowners and rental customers),  do-it-for-me customers  (these require installation  assistance), and commercial  business customers  (i.e., repair  and remodeling  contractors, electricians, landscapers, painters, plumbers). Lowe’s owns and operates 11 regional distribution centers located in North Carolina, Georgia, Indiana, Pennsylvania, Texas, California, Ohio, Florida, Connecticut, and Wyoming. Each center serves 126 stores on average. Lowe’s sources products  from around 7,000 merchandise  vendors  worldwide, with no  single vendor accounting for more than 5 percent of the total.

Lowe’s was founded in 1946 as a typical, small-town hardware store. It was incorporated in 1952 as Lowe’s North Wilkesboro Hardware, Inc. The company adopted its present name in 1961. It began trading on the New York Stock Exchange in 1979. Lowe’s major business consisted of sales to professional homebuilders. However, the  company  changed  its strategy  to serve do-it-yourself  consumers  in 1980 when housing markets started to decline. Since then, Lowe’s has become regarded as one of the industry leaders.

Lowe’s executives include Robert A. Niblock (chairman, chief executive officer), Larry D. Stone (president, chief operating officer), Robert F. Hull, Jr. (chief financial officer), Gregory M. Bridgeford (executive vice president),  Michael  K. Brown  (executive  vice president), Charles W. Canter, Jr. (executive vice president), Joseph M. Mabry, Jr. (executive vice president), Matthew  V. Hollifield (chief accounting  officer), and Gaither Keener, Jr. (secretary, general counsel). Lowe’s board of directors includes Leonard L. Berry, Peter C. Browning, Paul Fulton, Dawn E. Hudson,  Robert A. Ingram, Robert L. Johnson, Marshall O. Larsen, Richard K. Lochridge, Robert A. Niblock, Stephen F. Page, and O. Temple Sloan, Jr.

One of Lowe’s strengths  is being independent of any single product.  The company balances its product portfolio  with various brands.  Also, Lowe’s has a good  customer  service  reputation,   which  makes it well known  in  the  industry.  Another  reason  for Lowe’s success is its focus on the needs of its diversified customers. By offering its special order sales system, Lowe’s provides its customers  a choice from a wider collection of product  options beyond what the store stocks.

The most important weakness of Lowe’s is probably its U.S.-dominated  presence.  Lowe’s is concentrated almost entirely in the United States. Although it has some stores in Canada and has announced plans to enter into Mexico, Lowe’s is dependent on its U.S. operations.  Lowe’s is not utilizing the opportunities in other markets. For example, the Chinese market is massive, and contrary to the U.S. market, is expected to expand; Lowe’s rival The Home Depot acquired The Home Way, a Chinese home improvement retailer, in 2006. Lowe’s is still losing out on opportunities, and thus reducing its competitiveness against its rivals.

Another  disadvantage of Lowe’s is its limited control on the quality of the products.  The company has recalled some of its products  for quality reasons. This most  likely occurs  because of Lowe’s many different worldwide vendors. This diversity results in fewer quality checks and some defective products. Such incidents affect operations  and its brand  image and consumer perception, in which Lowe’s is investing heavily.

Bibliography:   

  1. Lowe’s, lowes.com   (cited   March 2009);
  2. SEC-EDGAR, www.sec.gov (cited March 2009).

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