SWOT Analysis Of Home Depot And Lowe's Companies Inc.

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Introduction

SWOT analysis is the strategic plan that allows a company to establish the strengths, weaknesses, opportunities, and threats that affect an enterprise. This entails the identification of an organizations objectives and the determination of the external and internal factors that are both favorable and unfavorable. SWOT analysis allows an organization to plan on the strategies to be adopted to promote organizational performance. Home depot and Lowe 's Companies Inc. are among the biggest home improvement retail chains in the United States necessitating the development of a SWOT analysis to differentiate the two companies and their performance.
Home depot Inc. is among the world biggest home improvement retailer. It sells commodities
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The satisfaction of the consumers makes them spread a good word of mouth which is a form of marketing. The company has financial resources that allow it to advertise its products through the media and various sources which convince more consumers to purchase from the company.
These strengths are similar to Lowe’s company’s strengths. The company is the second largest retailer in the US market which increases this competitive position and advantage over the rest of the retailers. The size of the company allows it to avoid paying the high prices that are set by the wholesalers since it purchases stocks from the manufacturers and consequently reducing its operation cost and reducing the prices from the consumers and an increase in the profitability of the organization. The quality of products and the good service allows the company to compete with its competitors increasing the competitive advantage and position of the company (Gilliard, 2011).
The second part of the SWOT analysis is the weaknesses of the company. The analysis of the Home Depot and Lowe’s company weaknesses gives a better insight on the areas in which the organizations should improve. Lowe has a small market share and is located in three geographical areas including US, Canada, and Mexico which is unlike
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The two companies face similar threats with a few limited to each company. The first common threat is the economic condition of the US market. There has been a recession in the US market which has affects the two stores greatly because there is a decrease in the purchasing power of the consumers and consequently decreasing the sales. The second common threat is the risk associated with foreign policies and economies that may discourage the sales of this companies or the diversification strategy. Home Depot faces stiff competition from Lowe’s company since the product range is similar and there is no differentiating factor for the two companies. Lowe faces the same threat since Home Depot has a well-established market and is well known for the quality of products and services which increases the competition for the company (Danca,

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