Evolve or Die in Business

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. 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 ground game that matches its online game or before Home Depot gets its act together now that its reputation is a bloody mess.

Lowe's is not in a position of overt weakness right now but the whole "evolve or die" credo that cost Blockbuster its prior existence is going to start picking off retailers other than Sears/K-Mart and JC Penney. Yum Foods (Taco Bell/Pizza Hut/KFC) and McDonald's are in the same boat within the restaurant sector as upstarts like Chipotle, Five Guys, Panera and others are eating away at potential market share.

The big-box store is never going to go away but revenue streams from the brick and mortar stores are going to start falling if they have not already. From a logistical standpoint, this means that Lowe's will need to take a dual pronged approach. The logistics of an online portal are obviously going to be different than that of a network of distribution centers that feed only or at least mostly the stores.

Lowe's is strong in the brick and mortar stores but they need to parallel that adeptness by giving structure and resources to its online offerings. When Wal-Mart and/or other retailers fully get on this bandwagon and Amazon joins the party as a big box retailers (probably only a matter of time), Lowe's will be in deep trouble if they have not engaged in these efforts and this goes double if Home Depot (or whomever else emerges like Menard's, etc.) elected to make such efforts themselves.

Another option would be for Lowe's to expand into the international markets. They are currently only in the North American market as they operate only in Mexico, the United States and Canada (Lowe's, 2014). They are playing second fiddle in terms of size to Home Depot both in the United States and globally. Europe is dominated by B&Q and OBI, and not Home Depot, so people that crave American brands and products would probably gravitate quite well to Lowe's.

However, Lowe's should probably focus on the North American market primarily. However, if there are opportunities abroad where Home Depot or other more regional companies have not filled the demand void, then Lowe's can at least explore the possibility. However, the Amazon/Home Depot paradigm should be the focus first and then global expansion might be an option if market saturation becomes an issue in North America. When Lowe's acquires other companies,.