Industry analysis
Home Depot operates in the home improvement retail industry that comprises of retailer that sell appliances, lumber, building material, kitten fittings and other home improvement products aimed at improving existing structures. Companies functioning in the home improvement industry buy products from retailer and manufacturer based all over the world, and then put those products for sale on the market to three types of buyers, generally characterized as: do-it-for-me, do-it-yourself, and professional customers. The home improvement retail industry is well established industry and is highly attractive and there is high level of price competition among the key players of the industry as the products lines are all the same.
The industry market size in the US is estimated at $303 billion in fiscal 2014, $221 billion attributed to consumer market (private home owners) and the remaining to the professional market
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There are a number of smaller players but lack the public existence and retail footprint of their larger counterparts. With such high levels of market absorption, both HD and LOW enjoy high bargaining power with suppliers of goods. The two companies vary significantly in terms of the strategies they employ to compel consumer traffic. Home Depot centre of attention is customer service, while Lowe’s offers discounts to improve sales. Home Depot has determined on customer service as a driver to grow customer traffic and sales, Lowe has battled mainly on the basis of lower prices. Home Depot has a status for lesser prices and more pro-friendly impression where Lowe’s is trying to capture the traditional do-it-yourself customer by trying to appeal the female customer, who the company declares, is responsible for eighty percent of home improvement
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)
Home Depot is the brainchild of Bernard Marcus and Arthur Blank and came about after both men lost their job in the home improvement industry in 1978 (Parnell, 2014). Home Depot has acquired several smaller home improvement stores in both the U.S. and abroad through the years which enabled it to position itself as the world’s largest home improvement chain (Parnell, 2014). Home Depot focuses on the do-it-yourself segment of the market and sells sells tools, construction products and services. Marketing is a strong point for the company. They are able to maintain a competitive advantage by keeping themselves available to their customers at all times. Home Depot has been using both online and offline marketing efforts. The internet has become a very useful tool for the company and part of the reason that they are leading the market in DIY stores. Home Depot currently provides DIY videos on YouTube and Vine that cover current topics that consumers are likely to be interested in. They also have social media pages on Facebook and Twitter, where they have a huge following. They provide online communities where actual employees answer consumer’s questions and provide assistance on
Opening its doors for the first time in 1946, Lowe’s is now the second largest home improvement chain in the world, operating over 1,800 stores in the United States, generating $56.2 billion in sales and $2.6 billion in net income for 2014 (Lowes Newsroom, 2015). Employing around 265,000 personal making them one of the top employers in the nation, there is no question that Lowe’s must be doing something right. According to Lowes Newsroom, “Lowe’s professional customers represent approximately 30 percent of total sales, approximately 16 million retail and professional customers are served each week. (2015, para 3) “Never Stop Improving”, is Lowe’s slogan; encouraging employees and customers to work together to maximize their in store
Lowe’s employs more than 260,000 people in more than 1830 stores; these employees are trained to provide exceptional customer service as well as receiving up-to-date product knowledge to assist customers with their improvement needs. In addition, Lowe’s has upgraded store information technology infrastructure to assist employees in accessing product data faster and easier. This is accomplished by providing the sales team with computers that have Internet access, and Ipad’s and Iphone’s loaded with specialized apps (Lowes, 2014).
Home Depot’s slogan, “More saving. More Doing.”, promotes Home Depot’s marketing strategy with more appeal for customers with less money to spend. Home Depot carries major brands but also carries Home Depot exclusives and proprietary brands which save customers money. Home Depot carries major brands like Dewalt, Hampton Bay, Homelite, and Martha Stewart Living. They also carry proprietary brands such as Ryobi, Rigid, Behr, LG and Toro.
Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank in Atlanta, Georgia. With their store, Marcus and Blank revolutionized the do-it-yourself home improvement market in the United States. Home Depot began as a very basic store, operated in a large, no-frills warehouse. Home Depot carries over 35,000 products, with national brand names along with the Home Depot brand. At the start, Home Depot was able to offer exceptional customer service with knowledgeable employees who could guide customers through home renovation projects. Since its opening, Home Depot has experienced incredible growth, and today is North America's second largest retailer, and the largest home improvement retailer. Internationally, Home Depot has expanded into Canada, Mexico, and is beginning to operate stores in China. Home Depot's competition includes Sears, Ace Hardware and Lowes (the main competitor).
Lowe’s is leading the way by example. Lowe’s believes that creating long-term partnerships is a win-win situation for both sides of the deal. Lowe’s is the second largest home appliance retailer in the country, by working hand in hand for twenty-six years with Whirlpool, the largest marketer and manufacturer of home appliances. Whirlpool and Lowe’s have worked together to become unmatched in bringing their customers a high quality product and a very low competitive price. Through a tremendous logistical effort Whirlpool and Lowe’s have created a one of a kind Innovation Tour. A semi-trailer transforms itself into a functioning kitchen to show customers cutting edge appliances that will be available at Lowe’s in the future from Whirlpool and Kitchen Aid. As Lowe’s motto states, Lowe’s truly is “Improving Home Improvement”. (http://www.businesswire.com/)
Some 400,000 specialty retail stores operate in the US with combined annual sales of $350 billion
Home Depot, well-known by its big, bright orange box logo, is a retailor of numerous popular brands of construction and home improvement products. Reach the Top® manufactures a popular brand of ladders and scaffolding already sold by Home Depot, and...
Wal-Mart initially began its operations in 1945, when Sam Walton leased a ‘Ben Franklin’ franchise variety store in Newport, Arkansas. After relocating to Rogers, Arkansas in the early 1950s, Sam Walton’s ‘Ben Franklin’ became ‘Walton’s 5 & 10’. By 1962, Walton found himself the chain owner of 11 different Walton’s stores across Arkansas. He then decided to rename the chain ‘Wal-Mart’, after himself. On October 31, 1969, after further expansion across the state, the chain was incorporated as Wal-Mart Stores, Inc. Three years later, Wal-Mart was approved and listed on the New York Stock Exchange (NYSE).
Demographics- An advantage of the home improvement industry is that you have a wide range of consumers. The main consumers of the home improvement industry are males from the age range 25-40.
The purpose of this presentation is to provide a comparative analysis of business activities of two well-known representatives of the US retail industry, Target and Walmart. My research is focused on a business strategy of these largest and most experienced American merchandising companies; particularly, on their activities in Canada. Based on the data collected from the various sources, I would like to detect, analyze, and demonstrate the obvious causes that have lead to a catastrophic failure of Target in its unsuccessful attempt to win a Canadian market.
Canada has $40 billion home improvement market which is about 6% the size of the U.S home improvement market. The Canadian home improvement retail sector had a compound annual growth rate (CAGR) of 3.1% from 2009 to 2013. Lowe’s considered entering Canada as its first step in global expansion because of the nation’s consistent economic growth over the past decade lead to robust housing market and spending for home renovation has grown across the country. Moreover, natural catastrophic events were occurred in Canada in 2013, storms in Toronto and Calgary led to flooded basements and completely damaged houses across the cities. Analysts estimated these damaging floods could increase renovation spending in the following year of 2014 and
...re of home-market demand for the industry’s product or service, refers to the degree of the demand of the market and identification of demanding markets and customers.
In 2016, Bed Bath & Beyond had the largest market share of any home goods retailer in the country with over ten billion dollars in sales (Statista, 2017). The next closest in sales was Ikea with just under seven billion in sales (Statista, 2017). Bed Bath & Beyond appears to be thriving in some areas; they have an efficient store set-up, a variety of products that appeal to their multiple target markets, and the supplier network to keep up with any fluctuation in demand (Zacks Equity Research, 2017). However, there is a multitude of options that Bed Bath & Beyond can use to improve their sales. For example, they could begin by assessing their products and inventory since the economies of the countries that Bed Bath & Beyond has stores in are