Lowes’ Porter's Five Forces Competitive Analysis

1272 words - 5 pages

Lowes’ Porter's Five Forces Competitive Analysis
Michael Porter's Five Forces analyze the external and internal environment of a company to increase the awareness of threats and structure of the industry that company competes within. Thus, the Five Forces is an ideal tool which can help companies to maintain their competitiveness with a higher profitability.
Porter’s Five Forces is defined as threats of new entrants, bargaining power of suppliers, power of buyers, the threat of substitutes and rivalry among existing competitors. New entrants into the industry aim to gain market share from rivals, so the intensity of competition may require to make changes on current strategy of marketing to maintain existing market share. The bargaining power of suppliers is one of the threats on the industry where price changes or product quality by suppliers can impact the profitability. Therefore, it is important for the companies to keep alternate suppliers or a contract to ensure prices, quality and quantity of the product so to avoid the company's supply from falling behind. The power of buyers can force the companies to lower the prices and offer different type products and service. Buyer can threaten the company with the competitors which may cause a negative impact on the bottom line to the companies. Thus, it is important to create a loyalty market share to avoid this threat. The threat of substitutes increases when another industry offers a similar product or services to customers within the same industry with a lower price. In this case, the industry profitability sinks since the product is available at a better price. This threat forces most competitors to price match or better performance. Rivalry among existing competitors creates the strategy in their industry by discounting, differentiating and adding extra value on the product or services. High level, intense rivalry may result with profit lost for the company. In most cases, new entrant barriers are high due to the intensity of rivalry (Porter, 2008).
Lowes’ Porter's Five Forces Competitive Analysis
As relevant to these competitive forces, the common and mutual goal of companies can be explained as better profitability with a greater market share against their rivals. Therefore, implementing Michael Porter’s Five Forces can help the companies determine the issues that may impact the company’s profitability in the long term.
Lowes Company Inc. has grown out of a small hardware store which was located in North Carolina in 1946. The founder and owner Carl Buchan had a vision of chain home-improvement stores at that time. One of the best strategies that Buchan did was working directly with manufacturers instead of wholesalers. This let Lowes come over the power of wholesalers. The company made a big reputation with low prices strategy. In addition, Lowes owns and operates stores in Mexico and Canada as well as United States (About Lowe’s, 2014).
The company's goal is offering the best...

Find Another Essay On Lowes’ Porter's Five Forces Competitive Analysis

Choose the airlines as an industry to apply the Michael Porter's 'five forces' model and discuss how one established airline like SIA should respond to the competitive environment.

2109 words - 8 pages QUESTION:The industry analysis is necessary in the strategic marketing planning in order to identify the opportunities and threats in the competitive environment. Choose the airlines as an industry to apply the Michael Porter's 'five forces' model and discuss how one established airline like SIA should respond to the competitive environment, after analyzing the industry.SIA is internationally recognised as one of the world's leading carriers

Reflective piece on usefulness of Porter's Five Forces model.

893 words - 4 pages In the first seminar of the term, I was observing how Porter's 5 Forces model (5F) can be used to analyse the strategic business dynamics of the European Forestry/Paper sector in the post 2004 European Union.5F is an analytical framework, which allows competitive dynamics to be systematically appraised in assessing existing and future profitability of markets/industries by analyzing the influence of particular characteristics of each of the five

Porter's Five Forces Model and The Movie Rental Business

916 words - 4 pages or partners better by supplying quality products and virtual service to promote brand lifting, customer feedback, great customer experience, and offering the right product to the targeted market. Porter's Five Forces Model is one of the frameworks that help businesses develop their market strategy and analysis. This paper will focus on the Porter Model to evaluate a prospective market entrance for a potential movie rental business. Therefore, the

Porter's Five Forces, online marketing advantages, and marketing ethics.

1447 words - 6 pages Essay QuestionsA.Choose a specific industry (e.g., grocery retailing, the airline industry, etc.), and apply Porter's Five Forces Model to discuss that industry's competitive forces and their relative influence.B.Discuss how online marketing could provide competitive advantages in the industry you analyzed in question A.C.Do you think firms that market products for children have any special ethical responsibilities when they advertise? Why or

Comparing the resource based view, Porter's five forces

8332 words - 33 pages The current issue and full text archive of this journal is available at www.emeraldinsight.com/1066-2243.htm An analysis of Internet banking offerings and its determinants in India Pooja Malhotra Department of Business Management, Geeta Institute of Management and Technology, Kurukshetra, Haryana, India, and Balwinder Singh Department of Commerce and Business Management, Guru Nanak Dev University, Amritsar, India Abstract Purpose - This

Comparing the resource based view, Porter's five forces and dynamic capabilities in strategy.

2415 words - 10 pages between alternative generic strategies in order to assume a clear position in the market. (Porter, 1980)Industry attractiveness is determined by Porter's five industry-level competitive forces, namely the power of suppliers and buyers, the rivalry amongst existing firms, the entrance of new competitors and the development of substitute products. The way value is appropriated among suppliers, existing rivals and buyers is determined by their

Using SWOT, Value Chain, Porter's Five Forces and other variables in Panera Bread Company, USA

2543 words - 10 pages , mission and strategic objectives by using major processes like strategy analysis, strategy formulation, implementation and corporate governance•Analyzing the micro and micro environments of PBC•Using Porter's five forces model and concept of strategy groupings to make PBC have competitive advantage over their competitors.•Using resource base view and value-chain analysis to identify possible opportunities and threats for PBC.2

Ryan Air: Analysis using SWOT & Porter's Five Forces

2073 words - 8 pages operating a fleet of six aircraft, employing 350 people, carrying 700 passengers on just five routes , and it had recorded its first ever profit.Over the next couple of years, schedules on the key Dublin-London route wrew increased average air fares were lowered and new routes were launched from Dublin to Birmingham, Glasgow, Manchester, and Gatwick. The number of customers continued to grow, thanks largely to Ryanair's low fares. By 1994,Ryanair

Use Michael Porter's five forces model to analyse the business environment in which your organization operates: Victor Chids

1691 words - 7 pages to be at play in an industry and affecting how that industry works and providing an indication of its attractiveness. The five forces are:Rivalry among competing sellers in the industryBargaining power of suppliersBargaining power of customersThreat of substitutesBarriers to entryThe following is an analysis on the business environment in which my organization, Intermarket Banking Corporation Limited is operating in.Intensity of rivalryRivalry is

Adidas Case Study: SWOT analysis and Michael Porter's Five Forces Model, including strategic recommendations

2515 words - 10 pages like soccer, which require the cleated/studded type shoe. The cleated shoe gave Adidas its initial foundation and leadership position, but the cleated shoe is not the key to being competitive in Adidas's current environment. A trend of wearing sports apparel, both footwear and textiles, for everyday leisure types of activities was emerging in the early 1990s. This trend was primarily seen in the 25 and under age group.Adidas is a German based

How useful is Porter's Five Forces approach to understanding the new entrants into the router market in the late 1990's?

938 words - 4 pages serious threat to Cisco by the year 2000.The backdrop to the emergence of these new competitors was the rapid expansion of the internet and a corresponding escalation in demand for high performance routers. The new entrants had concluded that "a high performance segment within the IP router market would emerge with Cisco or without it."This paper examines the usefulness of Porter's Five Forces approach in understanding the new entrants into the

Similar Essays

Porter's Five Forces. Essay

2326 words - 9 pages Introduction.'Competitive strategy is the bases on which a business unit might achieve competitive advantage in its market '.There are two factors for a firm to be profitable: the fetching appearance of the industry in which it operates and its position in this industry.The best known and most used set of competitive strategies are Michael Porter's Generic Strategies; he calls these generic strategies because they can be applied to a firm in any

Porter's Five Forces Essay

2255 words - 9 pages tools and techniques that were covered in the Strategic Cost Management and Strategic Business Analysis courses are very useful in providing decision oriented information to senior management in my organisation and such information will ultimately enhance its corporate value.” The essay (How Porter’s Five Forces Model shapes strategy for a new and small-size stockbroker) may be one of applications of those techniques learnt from the Strategic Cost

Airline Industry And Porter's Five Forces.

567 words - 2 pages 1.Use Porter's five forces of competition' framework to show how the structure of the airline industry has caused low profitability during the past twenty years.Below are Porter's five forces of competition. In them you will understand what has caused low profitability.The bargaining power of suppliers: Labor is the airline industry's largest single expense. Most airline workers belong to one of a dozen unions, which give the airline workers

Michael E Porter Five Competitive Forces

1843 words - 7 pages choice of strategy it can alter the impact of these forces to its advantage.This is a graphical interpretation of Porter's five forces model: (Figure 1 )2.The Structural Analysis of Industries2.1IntroductionThe essence of formulating a competitive strategy is relating a company to its environment. Social as well as economic forces are the key aspects of the environment in which a firm competes. Industry structure has a strong influence in determining