...7/26/2014 Home Depot vs. Lowes As a recent home buyer, I know first-hand the importance and value of having a local home improvement store. Within the first 6 months as a property owner, I have spent numerous hours, visits and money buying the essentials to complete my home. I never thought of myself as a loyal customer to Home Depot (HD) vs. Lowes (LOW) but after researching the two competitors, I have found myself take pride and loyalty with Home Depot. In this report, I will provide you with a full analysis comparing and contrasting Home Depot and Lowes. My conclusions will yield that clearly there is a difference between both company’s values and strategies, but importantly, Home Depot is a stronger investment for the short-term and long-term. My recommendations will support holding stock with Home Depot or invest soon. Quantity: The Value of Market Share In America, “size of the US home improvement retail industry is approximately $129.2B by revenues, with Home Depot leading the market with a 58.9% share; together Home Depot and Lowe’s account for 97% of the market share by revenues,” stated by William Bias. The fact remains that brand recognition drives price. There is clearly brand recognition and more importantly, brand loyalty with Home Depot compared to Lowes. And where does the brand loyal derive from…Proximity. The humanity that dwells within us tends to migrate to common and frequent people and venues. We are creatures of habits and Home Depot has strategically...
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...Strategic Audit of Lowe’s Companies, Inc. | Explore Page 1 of 70 Home Blog Contact Site Map Explore Learn. Live. Share. http://www.jacobcamp.com/2011/05/29/strategic-audit-of-lowes-companies-inc/ 5/25/2012 Strategic Audit of Lowe’s Companies, Inc. | Explore Page 2 of 70 Strategic Audit of Lowe’s Companies, I May 29, 2011 | Business Development,ERP,General Business Home » Blog » General Business » Business Development » Strategic Audit of Lowe’s Companies, In Click for PDF: Lowe’s U.S. Strategic Audit Spring 2011 Lowe’s Company, Incorporated is a home improvement retailer that has stores throughout the Unit following report is a student strategic audit for Mike Anderson’s strategic management course at th undergraduate student project team was composed of the following people: Keelie Cox, Alicia Kelly Wu, and myself (Jacob Camp) I. Executive Summary This report critically overviews the U.S. Division of Lowe’s Company, Incorporated. The purpose of accurate and current representation of Lowe’s through research using a variety of sources, method statements, recommendations, or opinions offered herein are only perspectives from the respective state that these aforementioned statements will come to fruition. The current operations, performance, and policies of Lowe’s will most certainly lead the company t the fortunate position to avert disaster. A note of exceptionally good news is that Lowe’s was evalu with a probability...
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...Maurice 2010, p. 561). An oligopoly is described in the book as a “few relatively large firms, each with a substantial share of the market and all recognize their interdependence.” (Thomas, Maurice 2010, p. 512). Meaning, direct competitors understand their internal decisions will affect not only their profits and placement in the market, but also greatly their competitors. Price cutting or expensive advertisement plans will affect the firm’s profit margins, but also with strategically place the competing firm in a position to react. Even in small towns or multiple businesses in the same industries from restaurants to retail, need to be aware of how their decisions affect their own business, but also their market. Decisions should be systematically made and will economically affect a business along with the anticipation of competitor’s reaction to their precise move. Oligopolies are everywhere and can be detected from wheat that is managed by large agriculture groups to cell phone companies. Oligopolies How do firms in the industry compete? Managers within interdependent industries make decisions that will affect not only their firm, but they must consider the reaction to their competitor as well. Without this consideration, the rival’s reaction will certainly affect his or her own sales and profitability due to that decision, which may or may not be intended. An oligopoly can be formed when a selected few companies dominate a market, such as the computer market...
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...The financial statement evaluation is complete as agreed. Outlined in this memo is an outline of the corporate stability of Company G. Listed are 13 ratios used to determine financial strengths and weaknesses. Each ratio is individually explained so there is a clear knowledge of what the gathered numerical information implies. Lastly, the company is compared with other companies in the home improvement industry to determine if it meets market standards. Current Ratio – 1.75 The company’s has a current ratio of 1.75 placing it in 58th percentile which is an indication of weakness. The Company G’s current ratio compared to last year is on a downward trend. That means that for each dollar spent, only 75 cents can be saved. This ratio is used to establish the company’s capacity to cover short-term financial obligations. It is calculated by dividing current liabilities by current assets. A company ratio of less than one is an indicator that signals the likelihood of Company G’s inability to cover short-term debts if they became due and payable. The company with the lowest ranking was Home Depot and Company G is vaguely beating their numbers. This is a weakness for the Company G. The company’s current ratio drops beneath the first quartile of 3.1 and also under the second quartile of 2.1. Acid-test Ratio – 0.42 This is a stringent indicator calculated similarly to the current ratio determining a company’s ability to pay off short-term debt. A ratio less than...
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...Dow 30 Case Table of Contents 1.1 Bordered Covariance Matrix 3 1.2 Determination of Target Return 3 1.3 Solver Parameter 4 1.4 Efficient Frontier Creation 4 1.5 Asset Weights 5 1.6 Weekly Rebalancing 6 1.7 Portfolio Calculations 6 2.0 Firm Analysis: Home Depot 7 2.1 Trends 7 2.2 Analysis of current Macro-economic conditions 8 3.0 Analysis of Return & Benchmark 8 4.0 Analysis of Porter’s Five Forces 10 4.1 Intensity of Competitive Rivalry 10 4.2 Threat of entry for new competition 10 4.3 Threat of Substitutes for Product & Services 11 4.4 Supplier Power 11 4.5 Buyer Power 11 4.6 Closing Remarks 11 5.0 P/E 12 6.0 Individual Company Analysis 12 6.1 Growth ratios: 13 6.2 Gross profit margin: 13 6.3 Financial Strength: 14 6.4 Efficiency ratios: 14 6.5 Management Effectiveness: 14 7.0 Dividend Discount Model Analysis 16 7.1 Calculations 17 7.2 Methodology & Result 17 8.0 Modeling: Free Cash Flow to Firm & Free Cash Flow to Equity 18 Appendix A 22 Appendix B 25 1.0 Asset Allocation Model 1.1 Bordered Covariance Matrix The chapter 7 in class spreadsheet model was a strong foundation that helped teach the group how to find an optimum portfolio. To create our portfolio model, a bordered covariance matrix and an efficient frontier was developed to find our minimum variance portfolio in the DOW 30 trading case. A screen shot of our model developed on October the 8th, 2010 is in the...
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...The Home Depot Financial Management Project Company Financial Analysis For: Professor Ana Machuca Submitted by Team A: Betcher, Rhonda Cammack, Cheryl Desai, Shekhar Barnes, John Babatunde, Lasisi Adamson, Christopher Submission Date: February 26, 2012 TABLE OF CONTENTS EXECUTIVE SUMMARY: ...................................................................................... 3. COMPANY INTRODUCTION: ............................................................................... 5. FINANCIAL ANALYSIS: ......................................................................................... 8. WEIGHTED AVERAGE COST OF CAPTIAL (WACC): ........................................ 11. FUTURE CASH FLOWS: ...................................................................................... 16. HISTORICAL STOCK PRICE: .............................................................................. 22. SECURITY ANALYST’S REPORTS: .................................................................... 25. DIVIDEND and CAPITAL STRUCTURE: .............................................................. 26. CORPORATE GOVERNANCE: ............................................................................ 28. MERGER and INTERNATIONAL STRATEGY: .................................................... 29. REFERENCES: .....................................................................................................
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...analyzed further in this document. The following document will not only explore the history and present, but will outline in detail the future demographic trends that are essential to GE’s future success in the home appliance industry. General Electric and the Kitchen Range Introduction Kitchen ranges have gone through major transitions since wood burning and cast iron devices to induction, convection and dual fuel from gas to electric. The industrial revolution was a turning factor for many companies to expand in the marketplace by trying to make kitchen chores easier and faster for women through the development of appliances. This area was the beginning of progressive inventions in this market which many companies such as Whirlpool, Electrolux and General Electric (GE) all became major players and still are today in this very competitive industry of home appliances. Part 1: Competitor Selection In 1892, two companies combined Edison General Electric, developed by Thomas Alva Edison and the Thomas-Houston Company, owned by Charles A. Coffin to originate the organization of General Electric Company soon to be known as GE. Over the years GE has built a portfolio of diverse products from Aviation; engines and services and Appliances; for business and home ranging from small and large appliances of ovens/ranges, dishwasher, washer, dryers and water heaters to small devices such as; coffee machines and microwaves (GE). It has been rated as the number one largest appliance...
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...CONFORMING LETTER Home Depot Inc. Dear Home Depot Inc. Management, As a partner of KNAM LLC, it is my pleasure to present you with the results of our initial review. Included with these results is our assessment of Home Depot Inc.’s performance is our proposition of areas we’d like to review further to determine improvements, efficiency, functionality, and health of your organization. Background Your organization’s core service is in the DIY home improvement market. You sell goods that consumers need for home improvement as well as advice on said projects, contracting services, lawn and garden, and appliances and tools. Your organization was founded in 1978 with the purpose of providing DIY one-stop shopping. Since inception, Home Depot Inc. has grown to become a multinational company with foundations strongly in the United States with roots in the Canadian, Mexican, and Chinese markets. Shortly after inception, Home Depot Inc. enlisted on NASDAQ and the NYSE. Your company has seen considerable growth in its main business as well as developments in subsidiary businesses and services. Home Depot Inc. has become one of the fastest growing retailers in America and as such, you would like to review the operations of your organization to determine areas of further growth and areas that may need to be leaner. Objectives of the Operational Review As a result of our initial review and interviews with your executive management...
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...privacy, luxury, and ultimate safety and convenience. Our innovative approach to a time-tested concept is based on extensive research and development and thorough marketing research. Our management team includes world-class professionals with varying technology, sales, and finance backgrounds that complement and provide rich depth within the company. Our founding philosophy is based on innovating the way we retrieve our mail. Based on the premise that there has to be a better way, our mission statement is to provide a “simple yet elegant way to retrieve and send your mail from the comfort and safety of your home to a roadside or edge of property mailbox.” Utilizing a customized mailbox outfitted with high-quality tubing, our product will deliver mail through a series of pneumatic tubes buried discretely through the property which will run right into the consumer’s home. Inside the home, we will install a vacuum system as well as a receptacle where the mail is sent and received. This station is unassuming and built flushed into the wall with a state-of-the art door design that will keep the mail secure until the homeowner is ready to retrieve it. Our company objective is to be the leader in this...
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...Appendix C: Organizational Analysis Costco Wholesale Corporation Introduction… The purpose of this Organizational Analysis is to discuss Costco’s current mission and values, provide a snapshot of their existing overall business model and the environment they are working in, and then discuss the key success factors required to succeed in their industry. Beyond that will be an examination of what resources (tangible, intangible, and human) and capabilities (functional and value chain) are needed to deliver on these key success factors, as well as analyze how Costco ‘stacks up’ to the competition in those areas. Finally there will be a discussion of what areas should be either improved or exploited moving forward to give Costco a more distinct competitive advantage (and therefore increased profits) in this industry. Mission, Values, and Strategy… Costco’s mission, quite simply, is to provide high quality merchandise at the lowest possible prices for its members, in an ethically responsible manner. Below is a copy of their mission statement directly off of the Costco website… The Mission Statement of Costco Wholesale: "Costco's mission is to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission we will conduct our business with the following Code of Ethics in mind: • Obey the law • Take care of our members • Take care of our employees • Respect our vendors If we do these four things...
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...AACSB Table 10-1: Summary of Faculty Qualifications, Development Activities, and Professional Responsibilities Date Range: January 1, 2007 - August 1, 2012 Accounting: Professor | | | | | | | Five-Year Summary of Development Activities Supporting AQ or PQ Status | | Name | Highest Earned Degree & Year | Date of First Appointment to the School | Percent of Time Dedicated to the School's Mission | Acad Qual | Prof Qual | Other | Intell. Contrib. | Prof. Exper. | Consult. | Prof. Develop. | Other Prof. Activities | NormalProfessionalResponsibilities | | | | | | | | | | | | | | Som Bhattacharya | Ph D, 1994 | | 100.0 | YES | | | 12 (5) | Service: 0Work: 0 | 0 | 0 | Editor/Review: 6Other:13 | UG, GR, RES, SER and ADM | Intellectual Contributions (12) Hopwood, W., Bhattacharya, S., Premuroso, R. (2011). Tasteless Tea Company: A Comprehensive Revenue Transaction Cycle Case Study. Issues in Accounting Education, 26(1), 163-179. Cao, J., Nicolaou, A., Bhattacharya, S. (2010). A Longitudinal Study of market and Firm Level Factors Influencing ERP Systems’ Adoption and Post-Implementation System Enhancement Options. 7th Annual International Conference on Enterprise Systems, Accounting, and Logistics. Rhodos: ICESAL. Behara, R., Bhattacharya, S. (2008). DNA of a successful BPO. Journal of Service Science, 1(1), 111-118. Premuroso, R., Bhattacharya, S. (2008). Do Early Members of XBRL International Signal Superior Corporate Governance and Future...
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...QuickMBA / Strategy / Porter's 5 Forces Porter's Five Forces A MODEL FOR INDUSTRY ANALYSIS The model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure. Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. Diagram of Porter's 5 Forces | SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry | | THREAT OF NEW ENTRANTS Barriers to Entry Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products | | THREAT OF SUBSTITUTES -Switching costs -Buyer inclination to substitute -Price-performance trade-off of substitutes | | BUYER POWER Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity...
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...www.it-ebooks.info www.it-ebooks.info E L E V E N T H E D I T I O N MARKETING MISTAKES AND SUCCESSES 3 0 T H A N N I V E R S A RY Robert F. Hartley Cleveland State University JOHN WILEY & SONS, INC. www.it-ebooks.info VICE PRESIDENT & PUBLISHER EXECUTIVE EDITOR ASSISTANT EDITOR PRODUCTION MANAGER PRODUCTION ASSISTANT EXECUTIVE MARKETING MANAGER ASSISTANT MARKETING MANAGER MARKETING ASSISTANT DESIGN DIRECTOR SENIOR DESIGNER SENIOR MEDIA EDITOR George Hoffman Lise Johnson Carissa Doshi Dorothy Sinclair Matt Winslow Amy Scholz Carly DeCandia Alana Filipovich Jeof Vita Arthur Medina Allison Morris This book was set in 10/12 New Caledonia by Aptara®, Inc. and printed and bound by Courier/Westford. The cover was printed by Courier/Westford. This book is printed on acid-free paper. Copyright © 2009, 2006, 2004, 2001, 1998, 1995, 1992, 1989, 1986, 1981, 1976 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should...
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...9-707-445 REV: AUGUST 25, 2008 JORDAN SIEGEL Lincoln Electric Introduction John Stropki, CEO of Lincoln Electric, returned home from Mumbai to company headquarters in Cleveland, having sampled the local Maharashtran delicacies while studying opportunities in the Indian market. From his vantage point in 2006, Stropki looked back on his company’s more than 100 years in the welding equipment and consumables industry with pride, wondering whether a strong push into India should be the next step in his company’s globalization. An India expansion had been considered for several years, but thus far the company had focused on growing its operations in China and elsewhere around the globe. If Stropki were to approve a significant allocation of resources toward an India expansion, he wondered what would be the best way to enter. He had a wealth of company lessons and experiences to apply to the India investment decision, as his company had had international operations since the 1940s, had struggled internationally in the late 1980s and early 1990s, and had gone on to regain its global competitive advantage in the late 1990s and early 2000s. During Stropki’s tenure as CEO since 2004, the company had further expanded globally and by 2006 owned manufacturing operations in 19 countries across five continents. Most recently, the company had enjoyed increasing success in China as a result of its aggressive expansion through both a joint venture and set of majority-owned...
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...the second undertaken by ICRIER on the retail industry, attempts to rigorously analyse the impact of organized retailing on different segments of the economy. No distinction has been made between foreign and domestic players, in analyzing the impact of the increasing trend of large corporates entering the retail trade in the country. The findings of this study are based on the largest ever survey of unorganized retailers (the so-called “mom and pop stores”), consumers, farmers, intermediaries, manufacturers, and organized retailers. In addition, an extensive review of international experience, particularly of emerging countries of relevance to India, has also been carried out as part of the study. The study estimates that the total retail business in India will grow at 13 per cent annually from US$ 322 billion in 2006-07 to US$ 590 billion in 2011-12. The unorganized retail sector is expected to grow at approximately 10 per cent per annum with sales rising from US$ 309 billion in 2006-07 to US$ 496 billion. Organized retail, which constituted a low four per cent of total retail in 2006-07, is estimated to grow at 45-50 per cent per annum and attain a 16 per cent share of total retail by 2011-12. In short, both unorganized and organized retail are bound not only to coexist but also achieve rapid and sustained growth in the coming years. This is clearly not a case of a zero sum game as both organized and unorganized retail will see a massive scaling up of their activities. In fact...
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