Lowe’s has the second-largest position in the home industry in the USA, with around 13% market share. Even after going through two great recessions, the company is standing still with many great strengths, and it has some weaknesses too, which we will learn in this Lowe’s swot analysis.
Lowe’s: Company Overview
| Company | Lowe’s Companies, Inc. |
| Industry | Retail |
| Founded | 25 March, 1921 |
| Founder | Lucius Smith Lowe |
| CEO | Marvin R. Ellison |
| Headquarter | Mooresville, North Carolina, U.S. |
| No. of Employees | 300,000+ |
| Annual Revenue | $72.148 billion (FY 2020) |
| Website | lowes.com |
Lowe’s is a home improvement retailer founded over a hundred years ago in 1921 by Lucius Smith Lowe and Carl Buchan. It operates 2,181 stores across the United States, Canada, and Mexico. The company reported revenues of $96.25B in 2022 and employs around 300,000 associates who provide customers with a wide range of products and services.
Product & Services of Lowe’s
Home appliances | Tools | Hardware | Lumber | Building materials | Paint | Plumbing | Flooring | Garden supplies | Plants | Housewares | Furniture | Home decor | Bedding | Curtains
Lowe’s Competitors
Walmart | ALDI | Home Depot | Amazon | IKEA | Best Buy | Target
Did You Know?
From 2001 to 2018, Lowe’s sponsored the #48 car driven by Jimmie Johnson in the NASCAR Cup Series, resulting in multiple championship wins.
Strengths – Lowe’s Fargo SWOT Analysis
Strong Brand Image: The company has built a strong brand image over the years, recognized for its quality products and services. Lowe’s brand is associated with reliability, trustworthiness, and expertise in home improvement. According to the 2023 BrandZ Top 100 Most Valuable Global Brands report, Lowe’s was ranked as the 83rd most valuable retail brand worldwide in 2022, highlighting its brand equity and recognition.
Efficient SCM: Through effective inventory management and strategic partnerships with suppliers, Lowe’s minimizes stock-outs and optimizes product replenishment. As a result, the company established an efficient supply chain, ensuring the timely availability of products to meet customer demand.
Excellent Customer Service: In this world and with all the competition, staying ahead is difficult without excellent customer service. That’s why Lowe’s strongly emphasizes customer service, aiming to provide a positive and personalized shopping experience, and invests in well-trained staff. As a result, In a customer satisfaction survey, 74% of respondents rated Lowe’s customer service as excellent, and they will repurchase, citing friendly and helpful staff who go the extra mile to assist them.
Weaknesses – Lowe’s SWOT Analysis
US Market Dependency: The company has a presence in only three countries but heavily relies on the US market for revenue generation. Because most stores are situated in the USA and over 93% of the revenue has come from the USA market, and the rest goes to the international segment, which makes it vulnerable to fluctuations in the domestic economy.
No Global Presence: Unlike its main competitor, The Home Depot, Lowe’s has limited international operations, restricting its growth opportunities. The company lacks a substantial global presence, thereby missing out on potential markets and customers outside the US. Its narrow geographical reach puts Lowe’s at a disadvantage compared to competitors with a more extensive international footprint.
High Turnover Rate: Lowe’s has great customer service, there is no question about that, but the high employee turnover rate has made it difficult for the company to maintain quality and overall operation and negatively impacted the company’s productivity and customer service. As per the data, the company’s turnover rate has reached almost 36%, which is way higher than the average industry rate.
Opportunities – Lowe’s SWOT Analysis
Market Expansion: As the company has little to no international presence, it allows expanding it in different markets. The global home improvement market is on the rise, and it is expected to reach $423.9B in the next five years with a 5% growth rate and targeting emerging markets like India and China, where the demand for home improvement products is growing rapidly, can present significant growth opportunities.
Portfolio Diversification: Not only are there opportunities for market expansion, but also, with the global trend and innovation, Lowe’s can consider diversifying its product portfolio by offering innovative and sustainable home improvement solutions. As the world is moving toward green energy, expanding into the renewable energy sector by offering solar panels and energy-efficient appliances can tap into the increasing consumer interest in eco-friendly options.
Better E-Commerce: There are always opportunities for better services, and Enhancing the online shopping experience can be a great opportunity for Lowe’s. Investing in user-friendly interfaces, personalized recommendations, and efficient logistics can attract more customers to their e-commerce platform.
Threats – Lowe’s SWOT Analysis
Cutthroat Competition: The home improvement industry is on the rise, and so is the competition. As a result, The competitive landscape puts pressure on pricing, customer service, and innovation, and Lowe’s faces intense competition. Besides, Lowe’s has around 13% market share, whereas Home Depot has nearly 20%, and it is getting more competitive.
Economic Turndowns: During the 2008 financial crisis, the housing market crash negatively impacted the demand for home improvement products and services. And after that, the industry growth was slow, and after covid, the industry got hit again as recession and inflation rose for various reasons; it is certain that the industry will be affected again.
Labor Strike: Whether it’s a product-based or service-based business, a labor strike can greatly affect the overall operations of the company, impact customer service, and erode public perception. And recently, Lowe’s has been facing issues with labor strikes, and unionization of the workers has become a huge problem as they have more power and are signing a petition to strike.
[Bonus Infographic] SWOT Analysis of Lowe’s
Recommendations for Lowe’s
As the competition is getting tougher and the industry is in a shaky position because of economic uncertainties, it’s high time the company should look more closely to solve the issues.
- By strategically opening new stores in underserved areas or expanding into international markets, the company should explore opportunities for expanding its market presence.
- To enhance its competitive advantage, Lowe’s should consider diversifying its product offerings beyond traditional home improvement categories.
- It should prioritize the improvement of its e-commerce platform to provide a seamless online shopping experience.
- Lowe’s should focus on improving employee engagement, training, and retention initiatives to address employee turnover issues.
Frequently Asked Questions (FAQs)
Who is Lowe’s CEO?
Marvin Ellison is Lowe's current CEO.
Is Lowe’s a Fortune 500 company?
Yes, Lowe’s is a Fortune 500 company.
Final Words on Lowe’s SWOT Analysis
Lowe’s is a leading home improvement retailer facing cutthroat competition, economic turndowns, and labor strike risks. To maintain its position, the company must focus on market expansion, offerings diversification, e-commerce enhancement, and addressing employee turnover issues through improved engagement and retention strategies.
References
- Wikipedia contributors. (n.d.). Lowe’s. Wikipedia.
- Sainato, M. (2022, October 21). Lowe’s faces organization effort as US unionization movement spreads. The Guardian.
- Hazelton, S. (2020, November 10). The best is still to come for the US home improvement market. S&P Global.
