Strategic Audit - Lowe's Companies, Inc Term Paper

Strategic Audit - Lowe's Companies, Inc - Term Paper Example i. Customers are increasingly looking at â€Å"Smart Technology†, such as one-touch programming for spas and baths; heated, self-cleaning and self-closing toilets; washers and dryers with humidity sensors and steam cycles, which provides an opportunity for Lowe’s to sell product upgrades. ii. China is providing a potential market, as that country has new laws that ease restrictions on buying homes. Moreover, homes in China do not come equipped with basics, such as flooring, fixtures and appliances, so the Chinese people must purchase these items when they buy a new home, which provides avenue for Lowe’s if they decide to expand into that market. a. Rivalry high – Lowe’s continues to be a distant second to Home Depot in terms of overall revenue. Price competition is keen, and rivals continue to offer new services and new products to attract customers. b. Potential entry of new competitors is low to moderate – There is limited customer loyalty, capital requirements to enter the industry are high, industry growth rates have been slow because of the recession. c. Competitive pressures from substitute products is moderate-high – substitutes would include stores that are outside of the home improvement industry, such as Wal-Mart and Costco; brand-name stores, such as Maytag Appliances and Sherwin-Williams paint; and trained professionals, such as plumbers and electricians. i. Pros – since small, locally-owned businesses are the main threat to Lowe’s, by partnering with these businesses and providing products and services, they get a piece of that pie as well. Small businesses probably need the cash infusion, so everybody wins. ii. Cons – Increased R&D costs are risky, as there is no telling how the green market will be in the future. It might be a fad, or might be long-lasting. Also, the costs for these items will probably increase with