Essay on Lowes’ Porter's Five Forces Competitive Analysis

Lowe’s has a variety of uniqueness that they should feel proud of. Lowe’s is number fifty in the famous fortune 500 list. Lowe’s knows and understands what it takes to get their customers involved. They have won eight energy stars in educating their customers about their energy efficiency. They are also famous for providing excellent offers and discounts to customers on a regular basis. Lowe’s works to improve their customer service skills and needs to help better serve their customers (Lowes Companies Success Story, 2017).

Porter’s Five Forces (1980), named after Michael E. Porter, is a critical framework to access the level of risk and degree of potential profitability of each industry in which firms are competing. Specifically, five forces are shown in Figure 1, are includes competition between rivalry, potential of new entrant, threat of substitute products, and pressure on bargaining power of suppliers and customers.

Established as the older company of the two, Lowe’s ranks forty-second as a Fortune 500 company. Established in 1946 as a small hardware business, Lowe’s has grown into a 40,000 product, global market enterprise that consist of 1,710 stores nationwide expanding into the countries of Canada, Mexico and Australia (Lowe's Internal, 2010) Home Depot, founded in 1978, is the fastest growing retailer in the United States. Ranked twenty-ninth as a Fortune 500 company, Home Depot continues to remain the number one do-it-yourself retail store in America. These two companies may sell products of the same nature, but comparing their Code of Ethics is their way of setting themselves apart. (Home Depot Internal, 2009)

Lowe’s is the world’s second largest home improvement retailer and operated 952 stores in forty five states at their fiscal year ending January 30, 2004. The company is currently in the midst of the most aggressive expansion in its history with 130 new stores opened in 2003 and another 140 slated for this year. Lowe’s saw 2003 sales reach approximately $30.8 billion, due largely to their focus on the retail customers and home-improvement projects.

Lowe’s Home Improvement is one of the two largest home improvement stores in the United States. The company initially began in 1946 in Willsboro, North Carolina, but has now become international, with stores in Mexico and Canada (Lowe 's Companies, Inc., 2015; Flavelle, 2007). The store initially began as a small hometown hardware store until a new owner envisioned a more focused product selection, home improvement, and eliminated wholesalers to deal with the product manufactures directly. While that narrow product line has continued to be the focus of the company you can now find over 40,000 products in the stores, the ability to order hundreds of thousands more through special order or a Lowe’s affiliate, and over 50 professional installation services available (Lowe 's Companies, Inc., 2015). As of 2014 the company had over 1,800 store and had revenues exceeding $56 million dollars (Lowe 's Companies, Inc., 2014).

Lowe’s mission statement is “Home. For over 50 years, it’s what Lowe’s had been about”. They have stayed the course, from helping people in the stores to helping people in the community. They continue proving they stay true to their vision statement by teaching people how to do their own home improvement projects. As well as supplying them with quality products to make the improvements. The mission statement holds true as well. Not only do they create opportunities for customers to make a home but they also work with the community to build homes for the homeless. Lowe’s will continue to grow and prosper, because they have great customer service, as well as phenomenal community

Lowe’s grew from a small hardware store opened in 1960 to a successful retail chain and Fortune 500 company, providing a huge range of home items and home improvement products. 30% of their sales are to professional construction and maintenance customers.

Lowe's has since grown nationally, as it was aided by the purchase of the Renton, Washington-based Eagle Hardware & Garden company in 1999.[15] It is now the largest home improvement store chain in North America and has begun expanding outside the United States, starting with the Southern Ontario area. The first store outside of United States was in Hamilton, Ontario,

Michael Porter formed a basis that consists of five forces of competition. These five forces are meant to be a framework for diagnosing industry structure. Essentially, the idea is to explain the sustainability of profits against bargaining, and direct and indirect competition. The five forces that shape the strategy are,

Michael Porter’s Five Forces Model is a useful tool for analyzing a business. The model is used to analyze the competitive forces and determine a strategy to develop a competitive advantage for profitability of a business. With Porter’s Five Force Model, it is possible to combat the completive forces by identifying opportunities, competitive advantages, and competitive intelligence. If the forces are strong, they increase competition; if the forces are weak, they decrease competition. The Five Forces are:

Porter's Five Forces model was used in many different industries.The five forces are threat of new entrants, threat of substitute products or services, bargaining power of customers (buyers), bargaining power of suppliers, intensity of competitive rivalry. This theory is based on the concept that there are five forces that determine the competitive intensity and attractiveness of a market. Porter’s five forces help to identify where power lies in a business situation. This is useful both in understanding the strength of an organisation’s current competitive position, and the strength of a position that an organisation may

Porter’s Five-Forces Model of competitive analysis is a widely used approach for developing strategies in many industries. Generally, Porter’s Five-Forces provide a good, simple yet powerful, framework for developing an understanding of the competitive forces or pressure either increase or reduce within DiGi’s industry that influence its pricing decision. Great competitive forces put more pressure on it while weaker competitive forces get over the pressure.

Porter's five forces is a model introduced in 1979 by Michael Porter and used by companies for industry analysis and corporate strategy development. The five forces include competition, supplier strength, customer power, the potential for new companies joining the industry, and the threat of substitute products.

Porter’s 5 forces classify the main competitive forces that affect the market and the industry. These forces helps to determine the competition in the market and also the profitability and attractiveness of the market for the company. All the industries have competitors, who in the end will choose. The main aspects of porter’s five forces analysis is that

The Porter`s five forces are threats of new entrants, the bargaining power of buyers ,product substitution and intensity of rival of rival among competitors .These forces measure the competitiveness of the market and also helps the company to identify strategies to use to penetrate such and gain market share.