...Ethics and Compliance for Lowe's Corporate ethics and compliance with financial regulations are crucial for the success of companies in today’s marketplace. Organizations thus find themselves defining and outlying their policies to ensure business is conducted ethically. Organizations which are involved in the financial markets in the United States also must outline their policies and procedures to ensure they are in compliance with all Securities and Exchange Committee (SEC) rules and regulations. This includes providing complete and accurate information in their financial reporting so that investors can make informed decisions when considering investing in a particular company. One company that does all of the above is Lowe’s Companies Inc. Lowe's, its board of directors, executive leadership team, and stakeholders take ethics and compliance seriously and their committed to protecting their culture of integrity (Lowe's, 2012). The board of directors oversees the sound governance practices that have guided the success of the organization for decades. Through constructive engagement with management and shareholders, and informed by their core values, the board provides oversight and counsel that strengthens the culture of integrity, accountability, and responsible business practices (Lowe's, 2012). “The Company has a share repurchase program that is executed through purchases made from time to time either in the open market or through private transactions. The Company also...
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...Lowe’s Home Improvement Stores Sheila Thomas Webster University Abstract Lowe’s exists to help customers improve and maintain their biggest asset- their home. We do this by meeting the changing needs of our customers by providing inspiration and support whenever and wherever they shop. Whether our customers shop in store, online, by phone, or if we’re meeting them at their home or place of business, Lowe’s is ready to help. In our more than 1,830 stores, we have implemented multiple systems to improve the customer experience, including an upgraded store information technology infrastructure that allows customers and employees to access richer product information, enjoy an endless aisle of product choices and manage their projects from inspiration to enjoyment (Lowe’s.com). Online, we are rapidly expanding our assortments to offer customers a broader range of products that can be researched and purchased online, in store or via our mobile app. MyLowe’s makes it easy for our customers to automatically track and store all purchases on their online customer profile. We’ve vowed to “Never Stop Improving” so we can satisfy the ever-changing needs of our customers (Lowe’s.com). Lowe’s operates more than 1,830 stores in the United States, Canada and Mexico. We serve approximately 15 million customers each week and employ more than 260,000 people (Lowe’s.com). Our stores stock 12 product categories ranging from appliances and tools, to paint, lumber and nursery...
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...transition themselves into multinational and global organizations, the question of which rules and regulations should the company follow is likely to precipitate. I feel such is the case with China. I believe prior to answering the question of foreign nation compliance, one should examine the reasons why an organization has entered into that foreign market. The primary objective is typically profits, a secondary could be expansion, an initiative to become a globally known brand and gain international market share. Once the fundamental question of “why” is answered, the remaining issues, such as foreign government policies, can be addressed as well. So should a company comply or defy? Proponents of both sides of the fence are up in arms and ready to debate their stance. Proponents argue loss of market share if a company decides to leave a potentially new market, especially an international market. And proponents of defying the compliance terms are citing moral and ethical beliefs which make it wrong to comply with a communist government (http://hbswk.hbs.edu/item/5246.html). So who is the victim and who is the winner? I think that both sides are equally at loss as well as gain. If a company decides to leave due to compliance issues, chances are their competitor will step in and dominate that market. It is often difficult for a company to enter into the market as a secondary and gain market share. Foreign investments are both risky and...
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...Initiative Although Lowe’s has grown to the second largest home improvement retailer worldwide, they still continue to trail Home Depot. At the center of Lowe’s success are their customer focus and their commitment to ethical behavior. However, Lowe’s 2012 Annual Report results a decline in the financial performance (Lowes.com, 2013). As a result of the decline the financial performance, Lowe’s has implemented the following strategic planning initiatives, Retail Relevance and Seamless and Simple. The Retail Relevance strategy is ensuring that Lowe’s keeps with customer love about the retail company while improving the retail operations (Lowes.com, 2013). The main focus of the Retail Relevance strategy is value improvement and product differentiation. Value Improvement enhances the core business by improving the line designs and lowering unit cost (Lowes.com, 2013). Product differentiation drives excitement in the store through better display techniques (Lowes.com, 2013). Value improvement and product differentiation will enable Lowe’s to compete more effectively by delivering better customer experience (Lowes.com, 2013). The Seamless and Simple initiative involves evolving the sales culture across all channels to include upgrading and continuously enhancing our information technology infrastructure, and allowing access to customer’s project and product status at all relevant touch points (Lowes.com, 2013). The Seamless and Simple initiative allows Lowe’s to deliver seamless...
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...Accounting/Financial Analysis Of Lowe's Inc. Lowe’s is the world’s second largest home improvement retailer and operated 952 stores in forty five states at their fiscal year ending January 30, 2004. The company is currently in the midst of the most aggressive expansion in its history with 130 new stores opened in 2003 and another 140 slated for this year. Lowe’s saw 2003 sales reach approximately $30.8 billion, due largely to their focus on the retail customers and home-improvement projects. Fifty eight years ago Lowe’s began as North Wilkesboro Hardware Company, a neighborhood hardware store fittingly named after the small town it was located in. Owned by partners H. Carl Buchan and James Lowe, this concept was more than a living, it was a vision of creating a chain of hardware stores. The concept was easy and straight forward. Lowe’s concentrated on selling only hardware, appliances and hard-to-find building materials while eliminating wholesalers and dealing directly with manufacturers to establish a reputation of offering the lowest prices. The company went public in 1961 and began trading on the New York Stock Exchange in 1979 (NYSE:LOW). In 1982, Lowe’s had its first billion-dollar sales year, earning a record profit of $25 million, establishing them as an industry force. Lowe’s has posted extremely strong numbers in the past few years and the company has grown rapidly, swelling it’s store base from 500 to over 950. Sales have increased an average of 20% per year...
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...Background Lowe’s although a well-known store for home improvement now falls behind Home Depot in profit and customer preference. Lowered to second place in 2013 when the Home Depot’s profits increased 18% over the year’s earlier period; with great results in housing recovery. Lowe’s failed during that time resulting in a miniature gain of 2.5% profit and a report of the spring being unusually cold, causing returns due to the ruining of products with dampened hoses and gardening gloves. Lowe’s is also reportedly losing in the battle of customer favorites and profits, because of its customer loyalty. Lowe’s shopper deficit stands at a percentage of -10% for both male and females shoppers, whereas Home Depot gained a total of 7% in customer loyalty between both male and female. This year Lowe’s fell behind Home Depot once again in earnings by not fully taking advantage of building a stronger housing market. To regain some of its earning in the housing market, Lowe’s utilized the strategy of big-ticket sales to boost the company’s revenue, in hopes to get a stronger growth in the categories of appliances and outdoor power equipment. Lowe’s has decided to fix the revenue problem by opening two new stores in Manhattan before the end of 2015, along with that fix is the earnings in shares by a rise of $0.16 ($1.20) from last year’s share of $1.04. Goals • Provide the community with 75% - 85% of resources necessary to accomplish their project improvement goals ...
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... Analyst of Value Line Publishing, Carrie Galeotafiore, was put in charge of the company comparison and developed a comprehensive forecast model that could be used to gauge future success. Historical performance, costs of capital, current financial statements, and macroeconomic trends were all used in creating assumptive ratios and growth rates. With five year projected financials, Galeotafiore applied these projections to current company metrics in an effort to publish an accurate forecast. Before finalizing these projections, it is recommended that Value Line produce a detailed qualitative analysis to support the numbers. The purposes of this analysis are to 1) provide detailed forecast analysis for hardware giants Home Depot and Lowe’s. 2) compare these assumptions to the industries previous and potential performance 3) provide a judgment for Value Line readers for potential stock investment actions. Although these two companies have risen to the top of this industry it is recommended that investors hold their current investment position on both companies, as opposed to buy or sell. Problem Formulation As Galeotafiore prepares to release Value Line’s forecasts, there are several important factors that must be taken into consideration. Primarily, are the numbers used in the models for Home Depot, found in Exhibit 7, dependable? Can both companies be expected to achieve similar growth rates or has market saturation been reached? Next, is Galeotafiore properly...
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...innovative business approaches. Thus, in 2001, Robert Nardelli was named Chief Executive Office of the Home Depot. Nardelli introduced many new initiatives to the company such as, centralized buying, company-wide analytics and improved information systems, which were essential for the company to remain competitive. Many of his other changes, however, led to significant dissatisfaction, low morale, high turnover, reduced productivity, and general discontent among the associates that seriously derailed the company from the customer-centric approach that made the Home Depot such a success story during the Marcus and Blank era. The result was the most dramatic decrease in customer satisfaction in retailing history. In 2001, the Home Depot and Lowe’s both had customer satisfaction scores of 74 on the American Customer Satisfaction Index (ACSI). By 2005 however, customer satisfaction at the Home Depot fell to 67, becoming the worst performing retailer on the American Customer Satisfaction Index (ACSI) that year.ii As Claus Fornell aptly stated: “Home Depot had devalued its most critical asset: the health of customer relationships”.iii In turn, this...
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...Lucius S. Lowe started Lowe’s in 1921. During the 1950’s Lowe’s opened more hardware stores, primarily in small town in the southeastern United States. Lowe’s went public in 1961 and was successful at merchandising and financial management. In the 1980’s due to competition from Home Depot, Lowe’s joined the bandwagon and joined the big-box type store. Lowe’s has a vast market, which includes, homeowners, renters, and commercial business customers. Lowe’s focuses on, meeting the group of customers needs, Creators, as they feel meeting the Creators discerning needs this will help to exceed the needs of other customers. Lowe’s wants to be the first choice among customers when it comes to home improvement. Realizing customers would like a full solution to home improvement. Lowe’s does this by partnering with the customer through the improvement process by offering inspiration, planning, completion and enjoyment. They have three goals, possibilities, support and value. Lowe’s offers a wide array of merchandise stocking 40,000 or more items, and special order items. Lowe’s installation is offered through independent contractors. Lowe's is an Authorized Service Repair Network allowing a customer to contact Lowe’s with a problem and get a solution. They also have a store credit card, which offers a five percent discount on everyday purchases and if a purchase if over $299, the customer may choose the five percent discount or no interest financing. The commercial credit...
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...In general consumers do not know what process the product they are purchasing has been thru before it gets to the store shelf to be purchased. Every company tries to put together a cost effective procedure to get the product on to the shelf and into their customers’ hands. Companies often compare business plans or business models to construct their own and often improve upon the process. Below the differences of companies like Home Depot, Lowes and any local hardware store. Each of these businesses aims to satisfy their customers by providing a wide range of products that can assist on home improvement projects or general contracting and construction. While all three businesses may have similar business models or target the same type of clientele, they each have a different Operations and Materials Management (OMM) cost. Home Depot is one of the largest hardware retail stores located in the United States. Home Depot employees run various tasks from assisting a customer with suggestions on items, to actually running heavy machinery to cut wood or metal for a customer. The employees seemed to be geared to help customers with their needs as fast as possible. The store stocks a wide variety of items for multiple different projects or repair. They also have a lower cost alternative under the Home Depot brand for many different items available in the store. By having a Home Depot brand on the shelves for a variety of items helps the OMM of the business by increasing revenue thru a...
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...Mingle Li | | Fin 470 Oct 16, 2011 Value Line Publishing There are two leaders for retail building-supply industry: Home Depot and Lowe’s, the two companies captured more than third of the total sale of the industry. Home Depot hold 22.9% market shares of the industry and Lowe’s hold 10.8% market share. Two companies are head to head competitor but focus on different market, Home Depot focused on large metropolitan areas and Lowe’s focused on rural area. Two companies both maintained online stores. Lowe’s has its own Web site: “Accent & Style” and focused on professional customer. Home Depot developed new type of retail stores in urban area and provide products and services in a compact format. Home Depot developed its first international retailer in 1994 and 10% of Home Depot international stores were built in global area at the end of 2001. Home Depot has 1,333 stores and 256,300 employees in 2001 and Lowe’s has 744 stores and 108,317 employees in the same period time. Return on equity shows how well a company uses investment funds to generate earnings growth. Generally a return on equity between 15% and 20% are considered desirable. Home Depot’s five year returns on equity all between 15% and 20% and Lowe’s five year returns on equity mostly less than 15%. The data prove Home Depot got higher net earnings than Lowe’s. Gross margin can use to determine the value of increasing sales. The higher gross margin means the company does a better job on turning...
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...case follows the performance-review and financial-statement-forecasting decisions of a Value Line analyst for the retail-building-supply industry in October 2002. The case contrasts the strong operating performance of Home Depot with the strong stock-market performance of Lowe's. Students examine a financial-ratio analysis for Home Depot that acts as a template for generating a comparable ratio analysis for Lowe's. The student ratio analysis is designed to build intuition with respect to interpreting individual ratios as well as ratio interrelationships (e.g., the DuPont framework). The historical-performance comparison suggests that investors are skeptical of the ability of Home Depot to maintain its performance trajectory, yet they project sustained improvements for Lowe's. Students are invited to scrutinize the analyst's five-year income-statement and asset-side balance-sheet forecast for Home Depot. The case expressly focuses on the asset side of the balance sheet as a preview for other cases using free-cash-flow forecasting. The Home Depot forecast exercise exposes students to the mechanics of financial-statement modeling and sensitivity analysis, which they can use in building their own forecast for Lowe's. Finally, the strong-growth assumptions for Home Depot relative to the modest-growth forecast for the industry suggest that the company can be expected to capture massive and perhaps unreasonable market share in the near term. The exercise provides a striking example of...
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...Lowe’s By You April 21st, 2014 University of Phoenix ECO-365 Introduction In the United States there are two major players in the home improvement industry. The biggest in The Home Depot. The other, while smaller having 502 less stores, is still a giant of the industry (Cramer, 2013). Through the recession Lowe’s stood while well The Home Depot fumbled. Lowe’s faces competition from opponents other than just The Home Depot as it expands beyond America. As Lowe’s seeks to enter the Canadian and Australian markets it will encounter more diversity than it has experiences so far. The complexities of doing business abroad and opening stores afar will become even more apparent as their international tactics change. Despite the challenges Lowe’s should expand further to become an even bigger player both nationally and globally. Global Competition’s Impact on Lowes In 2009, Lowes had 1,710 stores found throughout Canada and United States, 16 of these found outside the United States, with three stores in Mexico that opened in 2010, allowing for their exposure to bring them to a new level of sales internationally. (“Lowes Companies”, 2012) After much research it is found five competitors could impact Lowes, the #2 home improvement dealer in the world (Racine, 2012), but on different levels. The first competition is the main competition of Lowes, Home Depot, #1 in the world since 2005, (“Lowes Companies”, 2012) is expanding its sales by bringing in more Hispanics...
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...chairman of the board of directors and CEO, and Blank as the president. Home Depot’s Profile: * Employees: 256,300 * CEO: Robert L Nardelli * Subsidiaries: EXPO Design Center; Maintenance Warehouse; Georgia Lighting; Apex Supply Company; Your "other" Warehouse; Home Depot Commercial Direct Division; Total HOME * Notable Stores: Home Depot; EXPO Design Center; Villager's Hardware; Del Norte * Major Competitors: Lowe's; Menard; TruServ. Lowe’s at a Glance: Lowe’s and Home Depot are the two largest retailers in the home improvement industry. Lowe’s being the 2nd largest in the industry, however, It was originally incorporated as “North Wilkesboro Hardware” in North Wilkesboro, NC. It was later renamed as Lowe’s in the year 1946 when C. H. Buchan bought-out his partner and brother-in-law James Lowe’s share of the company. Lowe’s started to go public in October 10, 1961 and in 1989 Lowe’s converted from a chain of conventionally sized stores into a chain of home improvement superstores. By 2001, Lowe’s had opened up 806 stores with 110,000 associates...
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...Global Fortune 500 Company Home Depot | Economics for SocietyAyesha MuhammadSeptember 1, 2014 | Global Fortune 500 Company Home Depot | Economics for SocietyAyesha MuhammadSeptember 1, 2014 | Global Fortune 500 Company Home Depot Home Depot is one of the largest home improvement retailer in the world. With stores in the United States, Canada, Mexico and China. Home Depot was founded in 1978 by Arthur Blank and Bernie Marcus, along with investment banker Ken Langone and merchandising guru Pat Farrah. Their vision was to open a store as a one-stop shopping for the do-it-yourself individual. Home Depot opened their first store on June 22, 1979, in Atlanta, Georgia. In 1981 Home Depot went public on NASDAQ and moved the New York Stock Exchange in 1984. Between 1980’s thru 1990’s the company saw tremendous growth, in 1989 the company celebrate their 100th store opening. The company wish to expand their store globally, so they open the first home improvement centers in 1994 in Canada with the acquisition of Aikenhead’s home improvement centers, in 2001 under the acquisition of Total HOME that expand the vision in Mexico, and 2006 the company extended its reach to China by acquiring the The Home Way, a 12 store chain. Their global expansion demonstrates how The Home Depot combines its vast knowledge of the home improvement industry with the needs, shopping trends and customs of each unique geography to best serve customers. They are committed to being a global...
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