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Investment Value Analyses
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| Words: 1900 | Submitted: 11-May-2009
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DescriptionInvestment Value Analyses
3. Analyses of the competition RONA faces
RONA faces a highly competitive industry with three main competitors and 5000 independent retailers. Each competitor has its own advantages over one or more of the success-determining elements: price, store location, customer service and depth merchandise lines. Home Depot, a global brand, sells 40000 different kinds of home supply commodities. It now mainly dwells in Ontario and western provinces. Canadian Tire, also a large brand, has great numbers of retail outlets and nice store locations--85% of Canadian population lived within 15-minute drive of their local Canadian tire stores. Home Hardware aims at creating “community feel”. Their stores are smaller in size, greater in number, centrally located in communities and more convenient for small deals. A website has been built but online shopping is not available at present. Both Home Depot and Home Hardware have customer service program, while Canadian Tire has CTM, which brings down the price and foster the loyalty of its customers.
4. Analyses of the advantages and disadvantages of RONA
RONA is a fast growing company. Its market possession increased by 8% from 2000 to 2005 and stood at 15% in 2005. It has three kinds of stores with different sizes and commodities. Each kind of stores can be further catalogued into three different types according to their managerial mechanism. This brings RONA a large market, good flexibility and great potential for development but also more stress of management and competition. Competition is expected to be even fiercer as RONA expanded itself with constructing more stores, recruiting independent dealers and moving further to the west. RONA has to compete with its rivals in the fields they are most good at, which imposes great challenge and risk on RONA.
However, RONA has a good distribution system, a strong online presence and a forward-looking loyalty-cultivating strategy. Recent events show positive signs of successful expansion, with enlarged retail network, new affiliate members and corporate stores. The partnership with the Olympics will highly raise the profile and sales in the next few years.
Taking the above into account, RONA is a competitive company with high investment value.
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