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What Is Lowe's Economic Factors Affecting Home Development Business

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A marketing plan is essential for every organization if at all it has to succeed in its operations. Irrespective of how a marketing plan is organized, the marketing plan elements must be direct to the point and easily understood by all the stakeholders. A marketing plan is vital in providing a clear direction that an organization should follow in the marketing efforts in future. Lowe’s Companies is cited as the second largest homes retailer globally. Notably, the company operates a total of 1234 stores which are located in around forty-nine states. In fact, this represents over one hundred and forty square feet retailing space (Hitt, Ireland, & Hoskisson, 2009). A few years beck, the company operated only three hundred stores which amounted …show more content…

On the other hand, the organization gathers data with regard to the external environment, the competitors and itself (Lesca, 2013). There are various economic factors that affect the home development business. One of these factors is the interest rates. The company, like any other organization in the housing business, Lowe's is very susceptible to changes in the rates of interest. Notably, rise of the rates of interest result to the housing industry slowdown. The company has faced numerous struggles due to the mortgage crisis in the United States leading to the sales decline. The other economic factor that has resulted in slow growth of the company is the economic market downturn in the United States. The second environmental factor that has influenced Lowe’s Companies it technological changes. The pace at which the change in technology takes place affects the operations of every business organization. The application of social media is one of the technological factors that have led to the growth of the organization. The company has now turned to the use of the internet to conduct its marketing activities. The company also banks on mobile technology to reach more

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Companies all over the globe will experience some sales and profit decrease. Home Depot in the growing housing industry benefited greatly from the houses being built. The accounting concept portrayed in this situation for home depot is called operating leverage. Operation leverage is when managers view a small change in revenue and magnify it to dramatic changes in revenue (Edmonds, Tsay, & Olds, 2011). With a decrease in the market for construction materials, Home Depot is experiencing a 3% decrease revenue and a 21% decrease in profitability.

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When developing a plan for how your company will continue to grow in the future one must determine what factors will lead them to be more successful. Lowe’s is an organization that has done very well at planning what their next business move should be to grow the business in ways that show the customers and stakeholders they are working for them. While the way customers shop changes everyday with the external environment factors, industry competitiveness, and resources needed to be successful in its target markets. When the areas of macro-environment are studied by the leadership of the corporation, they must place focus on each area to see how they are influencing the way it is remaining relevant in the business world. A tool that Lowe’s

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