Lowe's Essay

Porter’s Five Forces
Porter’s Five Forces is a model to identify the business environmental threats and risks in order to develop effective strategies to eliminate these threats.
1- Threats of New Entry:
Lowe’s and Home Depot are the leaders of the business; they already have a mass chunk of the home improvement industry market share. Each one of Lowe’s and Home Depot has a large network of brands and products which make it very difficult to have a new entry competitor without a significant capital investment to get the amount of market share required for competition . So the threat of new entry is LOW.
2-Threat of Rivalry:
Beside Home Depot; the biggest rival to Lowe’s, there are some other small competitors such as Menards, Ace, and local small businesses trying to maintain their sales, but Lowe’s is in the growth stage which add an advantage to Lowe’s that any new Lowe’s outlet will appropriates

4-Threat of Bargaining Power of Suppliers:
Lowe’s has an efficient management for its supply chain, and the long term contracts they have with suppliers. Also, they look at every supplier and every product individually via their centralized logistic system. So the threat of bargaining power of customer is LOW.
5- Threat of Bargaining Power of Buyers:
Customers could choose to buy their product from a different competitor. Price, brand loyalty, and marketing all are factors can affect the power of buyer. Recently, Lowe’s added incentives to women to buy from them by adding value to products that women interested in and want which help them to mitigate buyer power risk because their stores become more appealing to their target markets. The threat of bargaining power of buyers is MEDIUM

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