Essay on Lowe's and Information Technology Management

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.

Lowes is currently involved in all sorts of different initiatives in order to boost sales during this current economic down turn. The first thing the company focuses on is the mindset of the average consumer. Lowes has discovered through lots of research the people basically want five things: balance, control, value, simplicity, and to shop for everything in one trip. In order to accomplish these five things, Lowes has focused on improving its skills in the following three areas: merchandising strategy, merchandise selection, marketing and advertising, and offering higher value at lower prices in order

Lowe’s, and other home improvement businesses, serve three types of customers; the Do-It-Yourself customer that is the individual who completes their own projects and installations. The Do-It-For-Me

A customer service program was developed in 1999 to track the performance of their employees. As incentives for their employees offering great customer service the data received from this tracking is used to reward employees. Additionally, it gave Lowes the ability to recognize the cause of service failures, thus giving them the opportunity to improve in that area. The layout of the store is helpful to the customer in locating the products that they are looking for. Its warehouse style store is laid out so that two shopping carts can pass in the aisles in comfort. This seems to appeal to the female shoppers which initiate eighty percent of home projects Lowes distribution system is strong and efficient. They regionally operate fourteen distribution systems. They efficiently distribute seventy five percent of its merchandise to its stores through the fifteen flatbed distribution centers they have for lumber, building materials and other long length or heavy items. Because can purchase large scale orders they are able to get them at a discount and pass the savings onto their customers. Lowes has multiple technological systems that their customers have access to. They offer how-to-videos, DIY projects, landscaping and lawn ideas, and more helpful videos full of inspiration. The enhanced multi-channel experience for the customer is available in many variations. Lowes has in-store-Wi-Fi, touch screen technology, and barcodes that can be accessed through a customer’s

Bargaining Power of Buyers: The bargaining power of buyers is high in the department store retail industry. The volume of buyers is high, and buyers are very price sensitive in this industry. The products are not highly differentiated, and there are numerous stores that offer the same, or similar, products, giving buyers the opportunity to search for the lowest prices and information. The industry has substitutes available in the form of specialty, differentiated products and stores. This increases the power of buyers,

Lowe’s is continuously being threatened by Home Depot in losing market shares. It is a constant battle; Lowe’s and Home Depot are expanding substantially in attempts to take over territory claimed by the other as well as unclaimed territory. The biggest weakness for Lowe’s is its lack of customer service. Customers are leaving Lowe’s in search of credible, knowledgeable service which is found at Home Depot.

For the industry, suppliers have a moderate level of power, as they are able to switch distribution channels quite easily; such as Country Road's change to Myer after 30 years with David Jones. Suppliers can also become self sufficient by selling online. For David Jones' sector, supplier power becomes lower. Suppliers battle with each other for exclusive placements in high end stores, and stores such as

Lowe’s is part of an oligopoly type market structure. An oligopoly is a situation in which a particular market is controlled by a small group of firms with at least two firms controlling the market. The main key to behavior in an oligopoly is that companies must take into account what other companies will do. In perfect competition, firms are price-takers and can ignore other firms (Basic Economics, 2009). The home improvement retail stores are an industry that includes Home Depot, Lowe’s, Builders Square, and in other states, Menards.  Smaller companies have to try to compete with them to stay in business.

Recent advancements in technology offer the organizations of today and the future boundless opportunities for improvements in service delivery. Although experts agree that the alignment of technology and the overall business strategy is both necessary and imperative, no clear path to optimum alignment exists. Christopher Nuckles, a IT Director I interviewed demonstrated full awareness of this fact. he and the company’s CIO, Matt Carey, and the executive IT leaders and displayed optimism the “interconnected retail strategy” they have for the company will ensure that Home Depot remains the product authority for home improvement. As part of the technical team that developed, enhanced, or supported several of the technological systems at Home Depot, Nuckles believes that the key to a successful technological future is innovation. Nuckles recognizes that the biggest hurdle for the Home Depot technology is the emerging e-commerce and he adds that Home Depot is ready for the boom. He explains that plans are underway to optimize the Home Depot mobile application entirely and make it available on all platforms so that the company remains relevant as technology keeps advancing.

Lowe’s designed their stores to be the opposite of competitors such as Home Depot. The spacious and well-lit Lowe’s stores appealed to potential customers that may not regularly visit warehouse-type hardware stores, such as women (Rouse, 2005). Furthermore, to increase their current customer experience and satisfaction, the company sought to enhance their installed and special order sales as well as modify their programs to be better equipped to handle commercial business customers. To do this, Lowe’s created an installed sales program where customers were able to select the design and materials used for their project and then hire Lowe’s professionals to complete the installation. In addition, specialty kiosks were set up around Lowe’s stores to educate customers and simplify special order home improvements. Special orders enabled Lowe’s to offer an assortment of products without having to invest the money up front in inventory (Rouse, 2005). To increase their commercial business customer base, the company began to offer professional quality materials and initiated commercial financing programs. Their logistics strategy was another area of strategic importance. At the center of Lowe’s logistics strategy was their desire to find the most efficient way to stock their shelves with an assortment of products (Rouse, 2005). Lowe’s operated ten regional distribution centers

Lowe’s serve DIY customers and also provides installation services and other services such as electricians, painters, plumbers and landscapers. Average Lowe’s has two kinds of stores, a 117,000 square-foot and the other one is a 94,000 square –foot. This remodeling of the stores layout was done in 1980s, after the arrival and success of the biggest rival “Home Depot”. A typical Lowe’s store carries approximately 40,000 items. These items include other brands too such as allen + roth, Kobalt and Utilitech. Lowe’s product line includes products for home decoration, house maintenance, repairing, remodeling & redesigning, and constructing a new house or office. Items that may not be available in the stores are still available to customers by placing special orders. The installation services of Lowe’s are available for more than 40 product categories. Installation services contribute to the net sale too with the greatest sales coming in flooring, millwork, and

Home Depot and Lowe's believe in big warehouse space, an informal atmosphere and low prices. They are able to offer the lower prices to consumers due to their purchasing power. Inventory differs depending on the story type, home centers typically sock more lumber and building supplies, as their biggest customers are contractors. They pay their floor employees minimum wage, and keep overall costs down by keeping them as part time employees.

Lowe’s Companies, Inc. is the fourteenth largest retailer in America, and overall the world’s second largest home improvement retailer. They are the 108th ranked corporation on the Fortune 500 top corporations list. With an impressive in store stock of 40,000 home improvement items on hand, ranging from lumber to Home décor items, plus an additional 400,000 home improvement items available through a special order program. Lowe’s provides a onetime stop for all home improvement needs, for both the Do-It-Yourselfer, and the ever-expanding market of the Commercial Business Customer.

Lowe 's is the world 's second largest home improvement retailer and the 14th largest retailer in the U.S. Lowe 's is in the midst of an aggressive expansion plan, opening a new store on average every three days. Lowe 's is an active supporter of the communities it serves. Through the Lowe 's Heroes volunteer programs and the Home Safety Council, it provides help to civic groups with public safety projects and share important home safety and fire prevention information with neighborhoods across the country. Lowe 's has been a publicly held company since October 10, 1961. Its stock is listed on the New York Stock Exchange, with shares trading under the ticker symbol LOW.Lowe’s Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States and Canada. The company provides a range of products and services for home decoration, maintenance, repair, remodeling, and property maintenance. It offers home improvement products in various categories, such as appliances, lumber, paint, flooring, building materials, millwork, lawn and landscape products, fashion plumbing, hardware, lighting, tools, seasonal living, rough plumbing, outdoor power equipment, cabinets and countertops, nursery, rough electrical, home environment, home organization, and windows and walls. The company’s products also include boards, panel products, irrigation pipes, vinyl sidings, and ladders. It serves

Porter (1980) emphasized that suppliers to an industry may be powerful if they are more concentrated than their customers and their customers do not command a significant share of their business because their customers do not represent a potential long-term or major relationship, for example, one-off or small customers versus regular or bulk buyers.