Evaluation of Business
Competition Strategies
LOWE’S COMPANIES, INCORPORATED
&
THE HOME DEPOT, INCORPORATED
Agenda











Business Level Strategies
Integrated Cost Leadership/Differentiation Strategy
Lowe’s Companies Incorporated
The Home Depot Incorporated
Competitive Dynamics
Competitor Analysis
Future Objectives
Current Strategy
Assumptions
Capabilities
Conclusion
Business Level Strategies
 Before you begin
 Who
 What
 How
 Manage customer relationships
 Positing through business-level strategies
 The four main strategies
 Cost leadership
 Differentiation
 Focused cost leadership
 Integrated cost leadership
Integrated Cost Leadership/Differentiation
Strategy
 Different products/services at low cost
 Customers value differentiated features
 Defeating the five competitive forces
 Customers are loyal
 Lower consumer buying power
 Higher profit margins
 Entry barriers
 Product/service substitutions are rare
Lowe’s Companies, Inc
 Large company with economies of scale
 Has a service based differentiation strategy
 Lowe’s Creative Ideas
 Showroom experience
(Lowe’s Companies, Inc., n.d.)
The Home Depot, Inc
 Large company with economies of scale
 Has a service based differentiation strategy
 FIRST phone
 Mobile media
 Web applications
 Serving customers when, where, and how
(Merchant Circle, n.d.)
Competitive Dynamics
 The standard-cycle market
 Partially concealed competitive advantages
 Imitation of capabilities is costly
 Achieve a competitive advantage
 Gain market share
 Retain customer loyalty
 Improve operations
Competitor Analysis
 Lowe’s and Home Depot are competitors
 Operating in same market
 Selling same products
 Targeting same customers
 Have similar resources
 Sizing up the competition
 Future objectives
 Current strategies
 Assumptions
 Capabilities
Future Objectives
 Lowe’s future objectives
 Great service
 Operational excellence
 Innovative merchandising systems
 Home Depot’s future objectives
 Customer service
 Supply chain initiatives
 Merchandising initiatives
 Organized retail strategy
Current Strategy
 Lowe’s current strategies
 Opening new stores
 Gaining market share
 Home Depot’s current strategies
 Closing stores
 Improving logistics
Assumptions
 Lowe’s assumptions
 Economy is recovering
 Currently in a housing slump
 Home Depot’s assumptions
 Economy is recovering
 Currently in a housing slump
Capabilities
 Lowe’s strengths
 Efficient merchandising
 Increased sales
 Strong logistics
 Lowe’s main weakness
 Reliance on third-party manufacturers
 Home Depot’s strengths
 Significant bargaining power
 Improved supply chain
 Improved customer satisfaction
 Excellent proprietary brands
 Home Depot’s weaknesses
 Mature market
 Legal proceedings
Conclusion
 Lowe’s and Home Depot are competitors
 Both offer differentiated products/services at low prices
 Competitive dynamics enable companies to know the






competition
Companies conduct a competitive analysis to understand the
competition
Both companies have similar future objectives
Both companies have opposite current strategies
Both companies have the same assumptions about the
economy
Home Depot has more strengths and weaknesses than Lowe’s
Home Depot is the leader in the home improvement industry
References
Datamonitor. (2011a, December 02). Home Depot Incorporated: SWOT analysis.
Retrieved from the Datamonitor 360 database.
Datamonitor. (2011b, November 25). Lowe’s Companies Incorporated: SWOT
analysis. Retrieved from the Datamonitor 360 database.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2009). Strategic management:
Competitiveness and globalization, concepts and cases (8th ed.). Mason, OH:
South-Western Cengage Learning.
Home Depot Incorporated. (2011). 2010 annual report. Retrieved January 30, 2012
from http://www.homedepotar.com/report.html
Lowe’s Companies Incorporated. (2011). 2010 annual report. Retrieved January 30,
2012 from
http://www.lowes.com/AboutLowes/AnnualReports/annual_report_10/lowes_a
nnual_report.pdf
Lowe’s Companies Incorporated. (n.d.). The Lowe’s Companies logo. Retrieved
January 30, 2012 from http://media.lowes.com/company+overview/
Merchant Circle. (n.d.). The Home Depot logo. Retrieved January 30, 2012 from
http://www.merchantcircle.com/business/Home.Depot.Atlanta.GA.770-433-8211