Evolve or Die in Business Case Study

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Lowe's Logistics

The author of this response has been asked to answer several questions about logistics relative to an organization of the author's choice. To that end, the author has selected Lowe's. The questions that will be answered include how the organization's logistics can be improved, what gives Lowe's a logistical advantage and how they perhaps fall short of other competitors that sell some or all of the same goods. While Lowe's really only has a handful of direct competitors and while there are some good that can (or should) only be bought in a brick and mortar store, Lowe's and their logistics practices and options are not as nearly as airtight and effective as they might want them to be.

Analysis

When it comes to direct competitors, about the only two obvious chains that come to mind are Home Depot and Menard's. However, there are other competitors that eat into the actual and potential market shares of Lowe's. These companies include Target, Wal-Mart and a few other big-box retailers that have some or a lot of overlap with the market that Lowe's resides in. One big threat to Lowe's are online retailers like Wayfair, Amazon and others. Amazon in particular is rather pernicious in that it is expanding what it sells and ships every day and they are even trying a brick and mortar store in New York (Rosenblum, 2014).

The talk about Amazon and other online retailers segues into what Lowe's must do to keep Amazon and companies like it at bay over the long-term and that is to have an online service and commerce offering that takes the fight to said online retailers. Not unlike Kroger branching off from grocery into hardline goods (and Wal-Mart making a mint off of doing the opposite over the last several decades), Lowe's needs to improve their customer reach by offering as many goods as they can online. There will always be a need for the physical stores as lumber yards and certain chemicals cannot be shipped safely (if at all). However, a dual presence is required to remain competitive as the vast majority of what Lowe's does sell can be bought online or in person and many people are opting for the latter in the modern marketplace.

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This is not to say that Lowe's is not already trying this and doing this but they need to be very aggressive. Wal-Mart is doing it, Target is doing it and so on. However, Home Depot is really the only company with the leverage to really hit Lowe's head-on and they just got lambasted for a massive hack of credit card information due to malware quietly siphoning credit card data to the hackers that perpetuated the crime. Lowe's has an opportunity here that is literally giftwrapped and they need to increase their own logistical prowess and reach in the marketplace so that they compete with Amazon when (not if) they are able to get a network of stores like Lowe's, Wal-Mart and so forth.

In essence, it will be a race between how fast Lowe's can continue to ramp up and expand their online presence and how long it takes Amazon and others to do the same with its ground-based stores. Even if/when Amazon has a national ground-based presence, they will not come close to the home improvement items that Lowe's possesses because a general big-box retailer, not unlike Wal-Mart and Target, has to be selective about what they carry because the store isn't big enough for everything. However, Amazon will have its behemoth online network already (as it does now) so that is why Lowe's needs to strike while the iron is hot. To concisely summarize what is in play here, Lowe's does very well as a home improvement retailer in terms of logistics as well as online data security, at least thus far. However, their online presence (or lack thereof) is going to become an issue if they don't expand it while they can and before Amazon gets a….....

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