Lowes SWOT Analysis [Update 2022] ❤️

SWOT analysis by Lowe’s examines the brand’s performance based on its strengths and weaknesses, as well as opportunities and threats. 

In Lowe’s SWOT analysis advantages and disadvantages are internal factors, while potential and dangers are external elements.

Lowes SWOT Analysis

SWOT Analysis is an established management system that allows brands like Lowe’s to evaluate their performance and performance when compared with the competition. Lowe’s is among the most popular brands in the retail and lifestyle sector.

The table below provides Lowe’s SWOT (Strengths and weaknesses-threats, and opportunities) and the top competitors of Lowe, and also its market segmentation, positioning, and its Unique Selling Point.

Lowes Company Background

Name Lowe’s Companies, Inc.
Website lowes.com
Founder Lucius Smith Lowe
Year founded 1921
Chief Executive Officer (CEO) Marvin R. Ellison
Headquarters Mooresville, North Carolina, US
Type of corporation Public
Revenues (2020) $89.597 billion (2020)
Company market capitalization $139.2 billion
Key products/ services Home Décor, Building Products, Hardlines, Gift Cards, Installation services through contractors.
Key competitors The Home Depot, Target, Costco, Walmart, Bed Bath & Beyond, Snap-on, Kingfisher, and Best Buy

About Lowes 

Lowe’s is an American retailer of home improvements that was established around 1921, 1921 by Lucius Smith Lowe. It is the second-largest hardware chain. 

It is located in North America, Lowe’s and its affiliates operate 2197 hardware and home improvement stores.

Lowe’s offered its services mostly to contractors at the beginning and its stores were designed to appear like small hardware stores in the neighborhood. 

As Robert Strickland took over as chairman of the company around 1978, the company created an advertising strategy that targeted self-builders.

Appliances, home decor, and garden accessories were included in the company’s range of products, which in the past only had huge tools and building supply inventory. 

From 2003 until the year 2010, Lowe’s was awarded an average of eight Energy Star honors, including four Energy Star Partner of the Year awards for informing customers on the advantages of conserving energy.

Lowe’s SWOT Analysis

The SWOT assessment is a technique that assists in identifying the strengths, weaknesses potential threats, opportunities, and strengths. The strengths, weaknesses, opportunities, and threats of each company might differ. 

These are the internal aspects that give companies an advantage in the competition. Threats and opportunities are external variables that could happen in the near future.

Strength In The SWOT Analysis Of Lowe’s

Being one of the industry’s top companies, Lowes has a significant advantage that makes it a success in the market. These are the strengths of Lowes:

❤️ A high level of satisfaction with customers: Owing to its commitment to its customers the company has been able to achieve a high level of satisfaction with its current customers as well as solid brand recognition among potential customers. They are mindful of the needs of their customers and work to fulfill their needs.

❤️ Solid Brand Portfolio Lowes The retailing giant, has been focused on building a solid brand portfolio. Lowes SWOT analysis emphasizes this fact. If the business wants to expand into new product categories the brand portfolio could be extremely advantageous.

❤️ An effective and reliable Distribution system that is effective and efficient: Lowe’s maintains 14 regional distribution networks operating. For lumber, building materials, and other items with a long length the company operates 15 depots that are truckloads. Lowe’s is now able to efficiently move 75% of its items to its stores and purchase massive quantities of goods at a lower cost and then pass the savings to customers.

❤️ efficient marketing and merchandising Lowe’s shops have different categories to meet the demands of diverse customers. Two of them are drive-through timber yards as well as outdoor garden centers.

❤️ With a strong network, Lowes is able to establish a reliable distribution channel over time that has the capacity to reach the majority of its market. Lowe’s Companies serve more than 14 million customers.

Weakness In The SWOT Analysis Of Lowe’s

Below are the weaknesses of Lowe that need to be fixed in order to keep its leadership position in the industry.

❤️ Limitations globally: Lowe’s owns stores in the United States, Canada, and Mexico. While a large portion of its merchandise can be shipped anywhere in the world, the lack of stores with physical locations in other countries can impact the gross sales.

❤️ Cash flow issues: Lowes has cash flow issues as a result of ineffective financial planning. This has led to situations where there’s not enough cash flow in the required amount and resulting in unnecessary borrowing.

❤️ Customer loyalty and brand retention call about products, such as LED clip-on desk lamps available only at Lowe’s hurt the retention of customers as well as loyalty.

❤️ A high rate of attrition among the workforce: In the workforce, there is a high percentage of employees who leave. Comparatively to other industries, it has a higher rate of attrition among employees. Lowes has a greater percentage of employees who leave and must invest substantially more in training and development than its rivals.

Opportunities In The SWOT Analysis Of Lowe’s

A few of the possibilities for Lowe’s are listed below:

❤️ The agreement between the government and the company opens new opportunities in the market: Lowes has been permitted to enter an emerging market because of the adoption of a brand new technological standard as well as an accord on free trade.

❤️ Customers acquired through the web way: The firm has invested a significant amount of money into the web platform in recent years. Lowes has access to an entirely new channel of sales due to its investment. Over the next few years, the company can benefit from this opportunity by better understanding its clients and meeting their needs using advanced analytics.

❤️ Lower transportation costs: Lower shipping costs can reduce the price of products from Lowe and give the company the choice of improving its profitability or passing the savings to its customers to increase market share.

Threats In The SWOT Analysis Of Lowe’s

Even though Lowe’s is the most prestigious company, there are many challenges that could put the company at risk of being in a position to be at. Here are the potential threats that are outlined in Lowe’s Companies’ SWOT Analysis:

❤️ Competitive: Lowe’s is the largest home improvement retailer in the world. Retailers like Wal-Mart as well as Home Depot are among its largest rivals. Lowe’s must keep its prices competitive and stocks of goods in order to sustain the company’s financial success.

❤️ Demonstration Customers are unable to feel or touch the product, and they may be confused and consider purchasing from a different source. Human contact is a crucial element in this field and the inability of this is a serious risk since other companies provide the capability.

❤️ suppliers: As the number of suppliers has declined over time, the suppliers’ bargaining power has increased. This could lead to an increase in Lowes’s cost of inputs.

❤️ Competitors’ technological advancements: New technological advancements made by a small number of competitors within the field pose a risk to Lowes as customers are drawn to the latest technology and could lose out to rivals, which could reduce Lowes’s market share.

There are limitations to SWOT Analyses for Lowes

While it is true that the SWOT analysis is used widely as a tool for strategic planning, However, the analysis has some limitations.

  • Certain abilities or aspects of an organization could be both a strength as well as a weak point at the same. This is among the main drawbacks that SWOT analysis has. Changes in environmental regulations can be detrimental to business, but however, it could also be an opportunity in the sense that it can allow the company to compete on the same level or even gain an advantage over competitors when it is can develop its products more quickly than its competitors.
  • SWOT doesn’t provide a way to gain competitive advantages and therefore it shouldn’t be considered a solution in and of itself.
  • The matrix serves as an initial point of reference for an analysis of how the proposed strategies can be implemented. It offered an evaluation window, but it did not provide an implementation plan that is based on Strategic Competitiveness Lowes
  • The SWOT model is a static analysis that analyzes the existing conditions and a small number of potential modifications. When circumstances, capabilities threats, strategies, and circumstances alter, the dynamic of the competitive landscape cannot be analyzed in one single matrix.
  • SWOT analysis could make a firm over-emphasize the importance of a single external or internal element in formulating strategies. There are interrelations among important external and internal aspects that SWOT cannot reveal, but can be vital in formulating strategies.

A SWOT Analysis That Is Weighted For Lowes

Due to the previously identified weaknesses of the SWOT analysis/ matrix, the management of corporations has decided to assign an appropriate amount of weightage for every internal strength and weakness of the company. 

They also consider the likeliness of events happening in the near future and what the effect will be on the company’s performance.

This is referred to as the Weighted SWOT analysis. It’s better than basic SWOT analysis as With weighted SWOT Analysis, managers in Lowes can concentrate on the most crucial aspects and ignore the less important ones. 

This also helps solve the problem of a long list that causes organizations to make an extensive list, but none of the items are considered important.

Recommendations

Lowe’s home renovations can be subject to some market competition, and their strengths are to offer. 

But their weaknesses must be addressed quickly in order to stay clear of any dangers and take advantage of the opportunities they have. Reaching out to a larger audience could prove to be a lucrative option for the company.

References Books on Lowe’s SWOT Analysis

Lowe’s (2018), “Lowe’s Annual Report”, Published in 2018.

Euromonitor (2018), “Services Sector Analysis “, Published in 2018.

A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)

L. Wrigley, Divisional Autonomy and Diversification (Ph.D., Harvard Business School, 1970)

M. E. Porter, Competitive Strategy(New York: Free Press, 1980)

O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975)

R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)

Conclusion

Lowe’s is the second-largest retailer of home improvement in the US second only to Home Depot.

The business is primarily in its US market, but there are also stores operating in Canada.

Lowe’s is an extremely stable financial institution that has earned a steady income over the years.

The SWOT assessment of the business’s operations is given above, describing its strengths and weaknesses, as well as opportunities and dangers.

Leave a Comment