Case Study of Lowe’s Inc 2013

Case Study of Lowe’s Inc 2013
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Case Study of Lowe’s Inc. 2013
Strategy Lowe’s Companies Inc. Plan
Forward Integration Forward integration happens when a company takes control of its supply chain. Lowe’s supplies 120 stores through 14 distribution centers. Also, Lowe’s supply chain finance program gives them a competitive advantage over their rivals.
Backward Integration Backward integration refers to a case when a company purchases its suppliers. Lowe’s acquired some of the Orchard’s suppliers.
Horizontal Integration Horizontal integration occurs when a company acquires another business at the same level of the supply chain. Lowe’s acquired the Orchard Supply Hardware including at least 60 Orchard’s stores.
Market Penetration Market penetration refers to the case where a company employs strategies to expand the customer’s base for a specific product. Upon acquisition of the Orchard Stores, there is an increase in Lowe’s sales revenue to $50.5 billion
Market Development Market development occurs when a company targets new customer’s segments. Despite being headquartered at North Carolina, Lowe’s operates a total of 1,745 stores across USA, Canada, and Mexico.
Product Development Product development refers to a case where a company modifies the existing products or creates new products to provide additional benefits to the customer segments. Other than hardware appliances, Lowe’s offers other products such as food products and groceries.

Related Diversification Related diversification occurs when a company expands the business operations with similar product lines it currently offers. Other than providing hardware appliances. Lowe’s offers repair and construction services to its customers.
Unrelated Diversification Unrelated diversification occurs when a company expands to a business line that is not related to the current product lines. Lowe’s offers foods and groceries which are not related to the hardware as the primary product.
Retrenchment Retrenchment refers to the low-cost strategy where companies reduce costs by cutting off the number of employees. Lowe’s adopts a low-cost strategy by diversifying the online shipping and thus reducing the number of stores and thus laying off the employees in these stores.
Divestiture Divestiture occurs when a company reduces the assets or investments. Lowe’s plans to reduce the investment by 15 stores annually following the increase in online shipping. Lowe’s also closed 20 stores in the USA due to poor performance.
Liquidation Liquidation occurs when the company’s assets are liquidated with the aim of winding up the business operations. Lowe’s is still in operation.
References
David, F. R., & David, F. R. (2015). Strategic management: Concepts and cases : a competitive advantage approach. Boston : Pearson.