This article provides a comparison between Lowe’s and The Home Depot companies in terms of strategic decision making style, leadership style, communication style, promotion policies, management style, company culture and performance, legal, social, and economic environment, SWOT analysis, and areas of improvement.
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Running Head:THEHOME DEPOT AND LOWE’S COMPANIES 1 The Home Depot and Lowe’s Companies Name Professor Institution Course Date
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HOME DEPOT AND LOWES COMPANIES2 Comparison between Lowe’s and The Home Depot Lowe’s and The Home Depot companies have been for a long time the famous of the home improvement retailers in the US. Being the world’s best home improvement retailers, the two companies share various similarities. Both are in competition for shared clients base across the US, Mexico, and Canada. Also, they both allow clients to move flawlessly between offline and online platforms Strategic Decision Making Style The Home Depot had experienced poor performance until when Robert Nardelli came up with strategic decisions which made the company improve its financial and operation services. Nardelli came up with a three-section strategy which is enhancing the core by increasing the profitability of present and future stores in established markets; expand the business by providing related services like tool rental and home introduction of The Home Depot products; and extend the market, both physically and by supplying the new customer. Lowe's Company had also experienced low sales leading to poor performance.Ellisonshipped in and he decided to change the supply chain approach. Ellison decided to close down 99 Orchard supply stores to enable the company to focus on the main home improvement business(Russell & Taylor, 2016). Leadership Style The Home Depot adopted a leadership style of having a seasoned manager who has the expertise required to drive the growth of the giant business. The manager would deal with the current problems that are apparent either to investors or employees. Lowe's company adopted a
HOME DEPOT AND LOWES COMPANIES3 new leadership team which would create an aggressive strategy to improve the store and remove clutter thus reducing poor performance inventory. Communication Style Lowe's and The Home Depot Company use Facebook, mobile app, YouTube, Twitter, and mobile site to communicate to customers and investors. They use an innovative strategy to their timeline. However, the company does not communicate often as it posts once a week. Both companies communicate with their customers in a conversational approach where they engage their audience in their reply.Lowe's use Facebook to perfect its brand andThe Home Depot's use Twitter as a tool for customer service. Promotion Policies Both companyall kinds of strategies for their marketing communications tactics to enhance their business and products.The promotion policies used include; public relations, sales promotions, advertising, direct selling, and personal selling. Advertising is the major promotion tactic however other promotion activities have also major contributions(Pratt, 2011). CompaniesManagement Style TheHomeDepot'sadministrationhasonemajorprioritywhichisthecontinued modernization of their supply chain. After relying much on the decentralized supply chain in 2007, The Home Depot began the modernization process of evolution where it embraced the centralized network of distributing its centers. Similarly, Lowe’s has experienced an outstanding growth history. It has already expanded its activities in Mexico, Canada, and the US. However, like its competitors, it has not attained success in China. Perhaps as a result of logistical benefits,
HOME DEPOT AND LOWES COMPANIES4 Lowe’s management is currently placing less focus on modernization of the supply chain. (Harris, 2012).The Home Depot and Lowe’s management has four major functions which include, planning, organizing, coordinating and controlling. Both the managerial bodies made the two companies to be the leading home improvement retailers globally. The strong point of the managers in the two companies was to identify the areas that were lagging behind. The managers helped the companies in improving the supply chain of the retail business which eventually resulted in performance improvement. Company Culture and Performance The two companies also have notable differences. The Home Depot's shops are characterized by the black and orange color scheme with high shelves which are only accessed throughforklifts.Suchindustrialappearancedepictsthatthestoreischanneledtowards improving home professionals. On the other hand, Lowe’s store has a distinct appearance where it has a white and blue color scheme and has more expounded floor display.Lowe’s has a reputation for handling well its first-time customers. In spite of their different brands, both stores refer to themselves as competitors of the same customers. Both retail companies operate in a wide area for their activities and have over 2000 stores all over the US. Both companies operate on the same market irrespective of their differences in supply-chain and branding strategies. At the moment, Lowe’s runs its activities on a wider geographical area compared to that of The Home Depot(Warren & Jones, 2019). Legal, Social, and Economic Environment The economic environment for both retailers has slightly improved. In comparison to previous years, there is outstanding consumer confidence. It has also been supported by the
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HOME DEPOT AND LOWES COMPANIES5 Conference Board Consumer Confidence Index which demonstrated a slight improvement on the same. The economic improvement of the two retailers has contributed to the decline in the unemployment rate. It is evident in the US Bureau of Labor Statistics, which reported that unemployment applications have declined since 2011(Cameron, 2011). The Home Depot and Lowe’s retailers have improved the social-cultural environment of the United States. In regard to these, the US has become a diversified society where current research showed that New York is more diversified with a mixture of people from all over the world. Thus, such diversity will compel these retail companies to expand their merchandise mix. In addition, the co-founders of The Home Depot and Lowe’s stores have emphasized the strict and unfair legal frameworks which are directed to retail businesses. For instance, unfair taxes, Consumer Protection Act and other reforms are demolishing the businesses at the expense of company performance. Companies SWOT Tool The Home Depot has the strength of being the largest home improvement retailer all over the globe and it also has an efficient supply chain. Their brands increase customer's confidence and their services are offered in an exclusive manner. On the other hand, Lowe’s has established the presence and efficient merchandising. They also have strong distribution channels and logistics which eventually enabled the company to have strong sales and marketing initiatives. Both the retail companies have an opportunity for the growing demand for their brands and increase relevance in other countries outside the US. Lowe's company has a weakness of violating government regulations and being dependent on their manufacturers(Williams, 2009). Similarly,The Home Depot has a weakness of already matured domestic market which hinders
HOME DEPOT AND LOWES COMPANIES6 growth. Increased restrictions, rise in labor wages and grim appearance of the market have been the threats of the two retailers as they operate their businesses. Area of Improvements needed For the two retail businesses to improve their operations in the US and other countries, they need to adhere to the government regulations and policies concerning tax and consumer protection. Such things would create a consumer's confidence and would also make their retail activities legitimate all over the world. Besides, Operations Strategy Framework The Home Depot provides an update on the core programs under its strategic framework that concentrates on creating value by linking the business end-to-end. Under this Operations Strategy Framework, which Home Depot calls Interconnecting Retail, the Corporation continues to be centered on productivity, product authority and customer experience.Lowe’s Companies, Inc., on the other hand, incorporate their stakeholder values, mission, and vision into the functional strategies, business level strategies, and corporate level strategies as a means to ascertain sustainability. Assesses how the overall management teams perform in terms of the four functions of management. ManagementteamattheHomeDepotisresponsibleforplanningwherebyitcreatesa comprehensive action plan tailored to achieve some corporate goals. Some select team members alsodetermineshowtheCompanyshoulddistributeresourcesandorganizeallworkers according to the strategy. The team members are generally leaders and they connect all
HOME DEPOT AND LOWES COMPANIES7 employees on an interpersonal level. Managers in Home Depot create exceptional controlling plans to develop the entire firm. Management team at Lowe’s Companies, Inc is responsible for planning or mapping out a plan on to attain a certain goal. It also organizes groups and allocates resource materials required to obtain the set goals. There is also a select team of HR practitioners who conducts the staffing functions such as developing employees, training, recruiting, and selecting. Some are left with the leading responsibilities such as communicating, encouraging, guiding, and motivating. Identifies and explains the strong points of the managers Managers at the Home Depot have the ability to organize business activities and multi-task. They are also good at delegating tasks effectively and efficiently. Most of them are confident decision makers and are optimistic. At Lowe’s Companies, Inc managers are always flexible, stay focused on the Company’s big picture. A majority of them lead by example and they pitch- in to help other staff members.
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HOME DEPOT AND LOWES COMPANIES8 References Cameron, S. (2011).Handbook on the economics of leisure.Northampton, Mass: Edward Elgar. Harris, R. ( 2012).Building a market: the rise of the home improvement industry, 1914-1960. Chicago: The University of Chicago Press. Pratt, J. (2011).Financial accounting in an economic context.Hoboken, NJ: Wiley. Russell, R. S., & Taylor, B. W. (2016).Operations and Supply Chain Management.New York: Wiley. Warren, C. S., & Jones, J. P. (2019).Corporate financial accounting.Boston, MA: Cengage. Williams, C. (2009).Management.Mason, OH: South-Western Cengage Learning.