West Lake Home Furnishings Ltd.

were still slapped with a high profit margin, resulting in overpriced products compared to local Chinese products.

Some costs are expensive: freight cost from China, inventory (lead-time increase because of shipping), and quality control (testing shipped products from China in the US require some cost; time and money)

Lowe’s (LOW) and Home Depot (HD) are competitors in the every growing market of Home Improvement. The following analysis of each company will examine the home improvement industry, the individual companies, their operating philosophies, their financial strengths or weaknesses, and a final conclusion on which company would be a better long-term investment.

The Sherwin Williams Paint Company was started in 1866 by Henry Sherwin and Edward Williams in Cleveland, OH. Since the company’s inception there has always been a focus on providing customers with high quality goods and services. As one can imagine the organization has undergone some changes since its inception to becoming one of the top paint manufactures in the United States. The company kicked off 2016 with a bang by naming its 9th Chief Executive Officer (CEO) of the company, John Morikis, on January 1st and making former CEO Chris Connor executive chairman of the board (Cho, 2015). Also, mentioned by Cho (2015), Morikis has been with the company for 31 years and, “He is the company 's first management trainee to rise to CEO” (2013,

Kirkland’s Inc. and Pier 1 Imports are among the major players represented in the retail home décor industry, where there is a constant demand to provide the right merchandising mix and marketing program for consumer attraction. However, in recent years there has been a decline in the retail home décor industry. Consumers have cut spending in anticipation of the continuing rise in gas prices, unemployment rates, interest rates, consumer debt and taxation. In the midst of a sluggish, unstable economy, both companies struggle to be profitable. In addition, the increased consumer spending in the fourth quarter for both companies does not

On one hand, acknowledging to their request could seriously affect Johnson & Johnson’s current pricing strategy by lowering it tremendously, and on the other, a decline to acquiesce to their requests could mean the loss of thirty percent of their total sales from one day to the next.

Despite being well-established, over the last three years, sales at Atherley Furniture Company have remained the same while profits have declined by almost 24%. Their chair division produces three different types of chairs, the Atherley, the Caledonia and the Parkdale. Each model has its own production plan and production costs. The increasing production costs, alongside the intense competition the company faces, have become a great cause of concern for John Atherley.

David C. Shaw prepared this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The

The first would be that instead of capitalizing the $210,000 to set up displays to promote the line, these displays could have been recorded as an Advertising Expense. One of the IFRS criteria for something to be considered an asset is that the benefit must be reasonably measurable. When it comes to anything done for the purpose of advertisement or promotion, it is hard to measure the benefit and that is why this cost could have been expensed rather than capitalized. However, by recording this event as an expense this would mean that Athina’s net income would have been overstated by $210,000 and that is an undesirable outcome for the national chain.

In order to further strengthen its holdings on the home improvement market, Lowe’s Companies, Inc. has restructured the company’s vision to conform to meet the ever-changing needs of its customers. Lowe’s extensive research has led it to include a well lit sales floor, informative in-store displays, exclusive and proprietary brands, and an ingenious store layout just to name of the few changes. This new vision is not only centered on the store itself, Do-It-Yourselfers and Commercial Business Customers have many ways to satisfy their needs conveniently though stores nationwide by placing orders over the phone, fax, or from the improved Lowe’s web site.

The first company that will be analyzed is Home Depot. Home Depot's total assets increased to $40,518 million from $40,125, an increase of 0.9%. These figures, however, are lower than the value of total assets on the books for HD for the prior three years. The 2008 fiscal year was the point where Home Depot had the highest asset levels at $44.324 billion. The recession has been the biggest culprit for the decline in the size of Home Depot. All of the firms in the building supplies industry have a strong relationship between their sales and the strength of the housing market, as home purchases are a major impetus for home renovation projects. Home Depot's size declined with the onset of slowness in the housing market, and it is expected that its size will not begin to increase until the housing market recovers. Home Depot management has noted that there are signs of life in the US housing market, and that this should be taken as an encouraging sign for the company (Isidore, 2012). Indeed, the company's balance sheet has grown in size throughout the 2013 fiscal year, so that the latest Q3 total

Based on competitor price points in number three and the positioning strategy of Show Circuit , the recommended price point for a case of Show Circuit would be $12.00. This is a recommended price point because it is aligns with Show Circuit’s position strategy and it is just slightly higher than the highest competitor price. Also, the contribution to fixed cost is higher than its competitors.

This haevily disguised case is set in the “nature “woodstoves business in 1986. It is not based on The Vermont Castings Company. The issue is product line strategy based on product line profitability.

b) Another alternative should be using the negotiation method in order to develop a “win-win” situation. A negotiating party would have to be applied, “When a long period of time is required to produce the items purchased” (p 375). In these circumstances, suitable economic price adjustment clauses must be negotiated. Opportunities for various improvements may develop, such as the new manufacturing methods, new packaging possibilities, substitute materials, new plant layouts, and new tools. Negotiation permits an examination and evaluation of all these potential improvements. Competitive bidding does not. The advantage would be assurance of a long-term business with the Company along with reasonable profit for the supplier and reasonable cost for the buyer.

Proximity to raw materials gives benefits on distribution channel which is already organized by formers. This also gives an added advantage in reducing transportation costs