Case – Lowe’s Company Inc. Case Solution & Answer

Case – Lowe’s Company Inc. Case Solution

            Lowe’s company has huge data for itscustomers andthis includes the feedbacks and responses from the customers. Omni channel retailing will assist Lowe’s company in the arrangement of the data of the targeted marketsothat the customized or personalized products and services will be received by the customers from the company.

Expansion in new region

            Lowe’s company has the opportunity to expand its operation to other countries of the world, especially in the developing economies such asUAE etc. as the development of infrastructure in UAE is very high. Due to the expansion in new regions of the world, the risk of environmental effect on sales will be reduced and this in turn will lead towards high profits and increased business value for the company.

Current Strategy of Lowe’s Company

Marketing Strategy:

                As the company is operating in the home improvement industry, therefore the essential requirement of the customers in this market is innovative products and competitive price. Lowe’s Company consistently focuses on its innovation in developments of the products, which helps in enhancing the customer satisfaction and loyalty. However, the sale of the company declinedlast year due to the uncertain economic condition. After the economic recovery, the marketing strategy of Lowe’s company helped in the recovery of position of the company before the recession, which include low pricing of the products, brand awareness and strong media presence.

Operations Management:

                Recently, Lowes’ company discontinued some retail stores and started focusingon the improvement of the services provided by the company to its customers. This strategy will heavily reduce the inventory holding cost, whichwould helpthe company to maximize its profitability. On the other hand, the company has improveditssupply chain management, as well as customer personalized products.

Expansion Strategy:

                Lowe’s company is considering expanding its operation in the Australia where the demand of the home improvementis high and the purchasing power of the people in Austrlaiis also high, therefore this will result in thecompany gaining more share in international market along with more profitability. However, the company could face different local problemssuch aslegal issue or political issues.

Supply Chain Initiative:

                Lowe‘s company should takesome initiative to increasetheir sales. The plan comprisesof three initiative install sales, special order sales, commercial business customer (CBC), which are designed to meet the demands of the customers specifically. Thus, personalized services can be received by the customers from Lowe’s company and that the customers would be willing to pay extra for this customization.

Interpretation of Lowe’s statement of Cash flows

Fiscal Year 2010-2011

                Exhibit 1 indicates that Lowe’s Company has been successfulin its core objective, which is generatingprofitability from the operations. Positive cash flows from the operating activities enhancedthe image of the company in the market of home improvement, therefore it can be said thatthe strategies of Lowe’s company are operatingsuccessfully in generating funds. The financingcash flows indicate that the company is not using the suitable method of financing, which has resulted in the lower cost of capital. Lowe’s Company has paid$987 million in short term borrowing, which is the expensive source of finance. Investing activities indicate that the expansion policy of the company will generate reasonable outcomes in future. Investing in plant and machinery will help the company to achieve economies of scale so as to reduce theoperating cost.

 Fiscal Year 2009-2010

                For the current year, the operating cash flows are again positive, this indicates that the company is performing well as it is in a stable position. Operating cash flows are generated internally in the company, which indicates that there are no outside funds in the company. However, in the financing activities, the company is paying huge amount of dividends to its shareholder, which is in contradiction of its own expansion plan. This indicates that the company hasto invest more on production facilities and innovation resources, which would help in future projects. Therefore,it will create value for the company rather than paying back the fund to the shareholders.

Financial Analysis

                The ratioanalysis has been conducted on the company’s financial statements, which indicate that the company is performing well as far as profitability is concerned as compared to the industry……………….

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