Lowe’s Company Inc Harvard Case Solution & Analysis

Lowe's Company Inc The case solution 

Corporate Strategy of Lowe’s

Lowe’s corporate strategy is based on the performance of the work. It can be concentrated on performing compared to our four initiatives of corporate strategy: conversion of the supply chain, engagement of clients, and effectiveness of operational and handling brilliance. These initiatives are supported by our emphasis on generating a whole Omni-channel trade knowledge for our clients.The main strategy of Lowe’s is fixed in providing our clients. We are following our missions: we are organized to serve the improvements products of accurate household things with the good services and the worth. This is cross-ways of each frequency & public which we are providing.

Porter Forces

Rivalry

High rivalry occurs because the company is compared with home renovation chains of warehouses, innovative hardware, services of electric, services of plumbing and the retailers of home supplies, retailer of merchandise, alliances of warehouse and some online retailers.

Bargaining Power of Buyers

The bargaining power is high because of the low moving cost of customers, many retailers are available through different channels, generating more buying experience for the customers. Lowe’s could create a strong customer base through continuous improvement in its products and services and also through providing discounted offers and promotional deals in order to achieve the higher customer satisfaction rate.

Bargaining Power of Suppliers

This is low because many suppliers are available in the home renovation industry. Many suppliers are using the power of negotiation to increase their expectations from their customers through higher prices. The higher supplier’s power leads to a decrease in the profitability of the home renovation industry.

Threat of substitute

It is low because there is no direct substitute available in the market for home renovation. Lowe’s is creating a strong customer base through the improvement of its products and services. It must create customer oriented strategy.

Threat of new entrants

The industry of home renovation involves a higher capital cost, higher manufacturer demand and a complicated channel of distribution;so, there are high barriers for new entrants to enter the home renovation industry because of the high investment cost involved to make an entry into the home renovation business.

Financial Analysis of LOWE’S Companies, Inc.

Liquidity ratio shows the company’s ability to pay current liabilities from current assets. The current ratio of the company is increasing but is less than the industry average which means the company has less liability as compared to its assets. The acid test ratio is also increasing which shows that the company is not investing too much on inventories. Both ratios reflect the good liquidity of the company but when comparing to industry it is still on lower side which need to further improve its asset structure in future.

Solvency ratio shows how much company is relying on external debts. The debt to equity ratio is increasing and is less than the industry, which means that the company is more reliant over debt. Similarly,the interest coverage ratio is on decreasing trend and lesser than industry average which means the company is using long-term debt. Both ratios show the weak solvency of a company.......................

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