育達科技大學 行銷與流通管理系 碩士學位論文 應用 SWOT 分析探討花園工具公司競爭策略之研究 - 以美國某進口商為例

Transcription

1 育達科技大學 行銷與流通管理系 碩士學位論文 應用 SWOT 分析探討花園工具公司競爭策略之研究 - 以美國某進口商為例 Applying SWOT Analysis to Competitive Strategies of Lawn & Garden Company Case of an Importer in USA 研究生 : 賴政忠 指導教授 : 黃慕也博士 中華民國一 三年七月十四日

2 Acknowledgement 感謝育達科技大學行銷與流通管理系讓我有學習的好機會與好地方, 感謝親愛的指導教授黃慕也博士, 悉心指導與完全的支持及指點迷津, 除了在研究方法與寫作技巧指導外, 其嚴謹的研究精神, 積極的態度及負責的處世原則, 使我在學習研究的過程中, 讓學生獲益良多 讓我這個老學生對於論文的學理有更進一步的探討與思考空間 更感謝系上教授李義祥博士與論文口試委員黃浩良教授的蒞臨與指導, 使學生之論文更臻完善 另外, 更感謝同窗好友王玉嬋在研究過程中相互 學習與鼓勵和協助, 在此一併感謝 在工作之餘, 能完成個人的最大的心願, 最感謝妻子的支持與父母親協助照顧小孩 ( 文與姍 ), 讓我無後顧之憂, 並全力的投入學習與結合實務 謹以此論文獻給我父母親 家人與師友, 致上內心最崇高的謝意 謝謝大家! 也祝福你們! 願榮耀喜樂與您們分享! 賴政忠謹上西元 2014 年 07 月育達科技大學行銷與流通管理系碩士班 I

3 中文摘要美國人喜歡照顧他們的草坪和花園, 但在過去 5 年的花園工具銷售被經濟和天氣共同壓制下 整體市場呈現出給進口商和零售商挑戰和機會 相對於少數進口商主要大型零售商客戶的銷售, 更造成為一個高度競爭激烈的情況, 對新進入者尤其特別困難 主要進口商, 其花園工具市場佔有率的位置是 :Orbit Melnor Nelson Gilmour, 競爭所有花園工具類產品 此論文, 將會專注在排名第一的進口商 Orbit 與排名第二的 Melnor SWOT 分析, 並針對 Melnor 提出提出與 Orbit 的競爭策略 零售業銷售額的 75%, 是集中來自大型零售商, 其主要為 Home Depot Lowe's Menards Sears Kmart ACE Hardware Truevalue Hardware 和 Walmart 消費者要求低價格和高價值, 挑戰對零售商產品的創新來符合消費者的需求 所以, 針對產品開發主要依據消費者的需求, 或是以市場為導向的研發 此論文介紹美國花園工具類消費市場分析, 探討花園工具類主要進口商 品牌 零售店類型, 並分析其主要活動 整合市場和區域分析後, 運用 SWOT 來總結 Melnor 和 Orbit 的優點和缺點 再針對 Melnor 分析中的強弱機危綜合分析法後, 再制定出戰略計劃 : 善用每個優勢, 停止每個劣勢, 成就每個機會, 抵禦每個威脅 關鍵字 : 花園工具, 強弱機危綜合分析法, 競爭力,Melnor,Orbit II

4 Abstract Americans love to care for their lawns and gardens, but the economy and weather conspired to suppress sales of lawn and garden equipment over the last five years. The overall market presents challenges and opportunities for both importers and retailers. A relatively small number of players account for the majority of sales, making for a highly competitive situation that is particularly difficult for new entrants. Few key importers with its lawn and garden market share position is, Orbit, Melnor, Nelson, and Gilmour, compete across all categories. This paper will focus on studying Melnor and Orbit both SWOT analysis, and develop strategic plans for Melnor competing against with Orbit. Retailing is even more concentrated, with 75% of sales coming from mass retailers, primarily Home Depot, Lowe s, Menards, Sears/Kmart (both owned by Sears Holdings), ACE Hardware, Turevalue Hardware and Walmart. Consumers demand low prices and value, challenging retailers to innovate with products that either cost less or are worth a higher price. Thus, market-driven R&D, consumers are the central point to the process, are main keys for product development. This report presents a detailed analysis of the U.S. consumer market for do-it-yourself (DIY) lawn and garden equipment. The report also discusses III

5 major players and brands and store types and analyzes their key activities and performance. After integrating markets and regional analysis, SWOT is applied to summarize both Melnor and Orbit its advantages and disadvantages. Afterwards, develops SWOT components for strategic plan to develop synthesis strategies to maximize strengths, stop weaknesses, exploit opportunities, and defend against threads. Key Words: Lawn & Garden, Hose-end, SWOT Analysis, Competitiveness, Orbit, Melnor IV

6 Table of Contents Acknowledgement... I 中文摘要... II Abstract... III Table of Contents... V List of Tables... VI List of Figures... VII Chapter 1 Introduction Research Motives Research Purposes Literature Reviews Research Methodology Research Flow Path Research Scopes & Restrictions... 9 Chapter 2 Lawn & Garden Industry Profile Lawn & Garden Product Assortments & Usage Technologies / Automations Product Patents Chapter 3 Lawn & Garden Global Gardening Market Profile Lawn & Garden Store Types - USA Market Retailer Overview A Growing Marketplace of Lawn & Garden Business USA Market Chapter 4 Competitiveness Methodology Key Importers Background & History Patent & Innovation Analysis SWOT Analysis Summary of SWOT Analysis of Orbit Summary of SWOT Analysis of Melnor Restrictions Chapter 5 Develop SWOT Components for Strategic Plan Maximize Strengths Stop Weaknesses Exploit Opportunities Defend against Threads Chapter 6 Conclusion & Suggestion Reference V

7 List of Tables Table 1 Reference Reports Associated with Competitiveness... 6 Table 2 Store Types and Store Numbers of Walmart U.S.A Table 3 Melnor s History Table 4 Strengths and Weaknesses Analysis of Melnor versus Orbit Table 5 Opportunities and Threats Analysis of Melnor versus Orbit VI

8 List of Figures Figure 1 Research Flow Path... 8 Figure 2 Spray Patterns Figure 3 Jet Nozzle Components Exploring Sketch Drawing Figure 4 Demonstration of Jet Nozzles with Connector Affixed onto Faucet Figure 5 Oscillating Sprinkler Sketch Picture with Range Control Description Figure 6 Sketch Picture Demonstrates End-Plug for Cleaning Jet Nozzles Figure 7 Oscillating Sprinkler Tube Components of Exploding Sketch Picture Figure 8 A Picture of Variable-Wide Oscillating Sprinkler Figure 9 A Picture of Impulse Sprinkler with Metal Spike Figure 10 Descriptions of Impulse Sprinkler Head's functionality Figure 11 Illustration of Water Wand Multi-Pattern Head Figure 12 Illustration of Shower Wand Head Figure 13 Descriptions of Water Wand's functionality Figure 14 Illustration of North American style of PVC hose Figure 15 Illustration of European style of PVC hose Figure 16 Illustration of Fitting Connectors Figure 17 Illustration of Repair Quick Connector of Demonstration Guide Figure 18 Illustrations of 12.5mm Hose Quick Connector Figure 19 Illustrations of 15.5mm Hose Quick Connector Figure 20 Illustrations of 19mm Hose Quick Connector Figure 21 Demonstration Guide of Nozzles with Connector Affixed onto Faucet Figure 22 Hose Quick Connector Components of Exploding Sketch Pictures Figure 23 Automatic Water Inlet Switching Device for Oscillating Sprinkler Figure 24 Walmart Store Snapshot: Rowland Heights, CA / 03-May Figure 25 Home Depot Store Snapshot: El Monte, CA / 05-May Figure 26 Lowe's Store Snapshot: Charlotte, NC / 28-May Figure 27 Walmart Store Snapshot: Charlotte, NC / 28-March Figure 28 Costco Store Snapshot: Sheboygan, WI / 03-March Figure 29 Costco Store Snapshot: Mississauga, ON / 01-April Figure 30 Home Depot Store Snapshot: El Monte, CA / 04-May Figure 31 Target Store Snapshot: Rogers, AR / 26-March Figure 32 Main Players Hold Numbers of Hose-End Product Patents VII

9 Chapter 1 Introduction 1.1 Research Motives The gardening & outdoor living market generally consists of the following segments: garden buildings; garden tools; garden utensils; outdoor living; and plants, shrubs, and growing media. The garden utensils segment covers garden hoses, plant containers, water butts, watering cans, and other similar items, like spray nozzles, sprinklers and automatic watering systems. This research will only force on the garden utensils segment. Understanding U.S. lawn and garden market, with a primary focus on products and services sold to consumers at major retails or on a contractual basis for maintenance and treatment of their lawns and gardens, which is the first motive To discover and research the main players of its profile and background at lawn & garden U.S. marketplace, then will focus on studying Melnor and Orbit both SWOT analysis, and develop strategic plans for Melnor competing against with Orbit, which is the second motive. After integrating markets and regional analysis, SWOT is applied to summarize the advantages and disadvantages. Afterwards, develops SWOT 1

10 components for strategic plan to develop a synthesis strategies, which is the third motive. 1.2 Research Purposes To sum up abovementioned motives, the objective of the studies as follows: A. To understand what is lawn & garden and its usage. B. To research U.S. market of lawn & garden of its main players, and store types. C. An analysis on the U.S. lawn and garden market its key importers by applying SWOT method. D. To develop SWOT components by suggesting strategic plans for Melnor competing against with Orbit. 1.3 Literature Reviews This sector will be following the information of an overview of competitiveness, the definition of competitiveness, and SWOT methodology mold is commonly applied for the competitiveness study, and Global Survey of 2013 country manufacturing competitiveness index rankings data. 2

11 1.3.1 An Overview of Competitiveness In general, the cost differences between nations have been the most important explaining factor of the economic theory of international trade. There are, however, many other important factors, such as natural resource availability, quality of products, technological sophistication, government regulations and institutions, all affecting a nation of its competitiveness. Under free and fair market conditions, firms in a more competitive nation can produce goods and services to meet the demands of both domestic and international markets while simultaneously expanding the real income of its citizens. Therefore, if a nation is more competitive than other nations, the nation can produce and then export more goods and attract more direct investments Definition of Competitiveness Despite its importance, competitiveness of the nation does not have a solid definition (Dieter and Englert, 2007, 2009). Originally, competitiveness is the firm s ability to provide products as or more effectively and efficiently compared to their competitors and to stay in business to have the capacity to advance existing market opportunities and generate new markets. So, competitive firms can achieve some desired results in terms of profit, price, margin, return, or quality of products. 3

12 The concept of competitiveness was extended to the national level by Michael Porter (1990). Porter s Competitive Advantage of Nations bridges strategic management of firms and international economics. Porter emphasized that it is firms rather than nations which compete domestically and/or internationally. The role of the nation is how it helps or impedes firms business activity. Porter (1990) believes the traditional comparative advantage of international trade theory is inadequate, and a nation attains a competitive advantage if its firms are competitive. Firms become competitive through innovation. Innovation can include technical improvements to the product or to the production process, which eventually results in lifting up the return. (Source: National Competitiveness Index) Common Methodology for Industry Competitiveness A. With regard to International Journal of Business and Management, July 2010 by Mahmood Hemmatfar, Ph. D. & Mahdi Salehi, Ph. D. that Michael Porter s competitive forces model is one of the most popular framework for analyzing competitiveness (Porter, 1985). B. According to Turban et al, (2006), Porter's model has been widely used to develop strategies for companies to increase their competitive edge and it also demonstrates how the industry can enhance to competitiveness of corporations. 4

13 1.3.4 Competitiveness Research Reports Applied SWOT Traditionally, SWOT framework is used due to its inherent assumption that managers can plan the strategy of company s resource with its environment (Novicevic et al, 2004), SWOT analysis is very simple and flexible which means it only requires people to understand the nature of the company or the industry it operates instead of specific technical skills or training. According to Mehta (2000), the benefits of SWOT analysis are :1) It can improve the quality of a company s strategic planning even it lacks marketing information systems. 2) Ideally, it helps marketing manager integrate all kinds of information efficiently. 3) It allows collaboration between managers in different functional areas. Accordingly, the top manager who has right to make decision must make sure if the objective of company or project is attainable and available by using SWOT analysis. If the consequence is negative, another objective will be proposed to replace the former one. In addition, the standard SWOT matrix is a classic method to evaluate the internal factors of company such as strength and weakness, while taking consideration into opportunity and threats these are external to a company to determine its impact on company s marketing effort (Mehta, 2000). Novicevic (2004) also state that SWOT has been used as a managerial tool for marketing planning, meanwhile the main functional approach of it is to determine the 5

14 internal and external elements.(source: Dual-perspective SWOT: synthesis of marketing intelligence and planning, Novicevic et al, 2004) Index table (table1) will be presented a number of reports that are associated with competitiveness by applying SWOT method. Table 1 Reference Reports Associated with Competitiveness Title Author Years The International Competitiveness Pei-Ling Zhang June 2009 Analysis of the Fastener Industry in Taiwan FWC Sector Competitiveness Studies - Competitiveness of the EU Metalworking and Metal Articles Industries Directorate-General Enterprise &Industry November 2009 Strategy Paper on Galvanizing Harbhajan Singh October 2011 Machine Tools Industry in India through Technology Development A Competitive Realities Report for Fayetteville and Cumberland County, North Carolina Study of Competitiveness - A Case Study of DHL Garner Economics LLC Solutions that work Ji-Liu & Yuanyuan Wen February 2012 June

15 Competition analysis of Taiwan Hsin-Yu OU June 2012 stainless steel fitting industry Turnaround of Sears Holdings Chris Clark January Research Methodology To analyze an industry its competitiveness is commonly adopted by Michael Porter five forces, SWOT Analysis. However, there is no evidences or fully analysis a research study regarding the lawn & garden industries upon abovmentioned methods in the market. SWOT analysis (alternately SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. Porter's model of Competitive advantage of nations (named as Diamond Model) has been widely used to understand the competitive position of a nation in global competition. This model can also be used for other major geographic regions. These interlinked advanced factors for Competitive Advantage for countries or regions in Porters Diamond framework are: Firm Strategy; Demand Conditions; Related & Supporting Industries; Strategy Structure & Rivalry; Government; and Chance. 7

16 1.5 Research Flow Path To decide the research motives, purposes, method structures, scopes and restrictions Secondary data collection Institution or government data Web pages surfing Associated articles, reports, and books lawn and garden business profile; hose-end catalog review, product assortment and usage; technology and automations Product patents; lawn and garden global gardening market profile; US market store types; US market retailer overview; growing US marketplace business; competitiveness methodology; key importers profiles Strategy analysis & method SWOT Maximize strengths; stop weaknesses; exploit opportunities; defend against threads. Conclusions & Suggestions Figure 1 Research Flow Path 8

17 1.6 Research Scopes & Restrictions This report presents a detailed analysis of the U.S. consumer market for do-it-yourself lawn and garden equipment. It outlines key issues and trends affecting the overall market and analyzes hose-end category. The report also discusses major players and brands and analyzes their key activities and performance. Analyzing industry competitiveness that some of factors, policy, technology, human resource and etc., cannot be quantitative approach. There is no fully analysis a research study, and data either in Taiwan regarding the lawn & garden industries upon abovmentioned methods in the market. With regard to international market research information is not easy to get the first hand or latest update information that is another restriction for this paper. 9

18 Chapter 2 Lawn & Garden Industry Profile 2011 was an uncertain year for many industries due to economy crisis especially for European countries and unstable weather, including garden industry. Prices of raw materials increased severely along with the global economy recession. As a result, companies around the world went through a tough time with declining consumption. However, things are not as bad as you might think. Lots of people began to save money and cut back on their daily expenses. Spending money on vacations and purchasing new homes are no longer usual activities for them. As their leisure time at home because much more than before, people intend to spend money on decorating their home and yards instead, and even planting their own fruit and vegetable gardens. Because of the rise in the price of oil during 2011, governments as well as important organizations and associations pay more attention to energy problems and put more emphasis on green industries. This will greatly increase the demand for gardening tools and will be a prime opportunities for the industry during tough times. 10

19 Additionally, garden tools have become more receptive to female consumers so designing garden tools especially for women has become a new trend in the industry. From these new products, we can see more heart, soul, inspiration that have been put into garden product design. Garden tools are no longer cold, hard implements; they have given added lift and meaning. This chapter is introducing each category of lawn & garden its assortment and usage; lawn & garden its production procedure, and patents. Last, will research main manufactures of lawn & garden industry in Taiwan. 2.1 Lawn & Garden Product Assortments & Usage The following are just a few examples of the types of hose-end product demonstrations and its usage Nozzle Spray nozzle, hose nozzle, adjustable nozzle, multi-patterns nozzle, jet nozzle and pistol nozzle that are all categorized as the term Nozzle. A spray nozzle is a precision device that facilitates dispersion of liquid into a spray. Nozzles are mainly used for three purposes: to distribute a liquid over an area, to increase liquid surface area, and create impact force on a solid surface. 11

20 A wide variety of spray nozzle applications use a number of spray characteristics to describe the spray. Another expression of a hose nozzle is an additional piece that fits on the end of a hose. For home and garden purpose, this is typically a water hose used in a garden. Depending on the nozzle, the way that water squirts from the hose can vary, and may types of hose nozzles have a variety of settings that can produce water flow in different manners. The simplest hose nozzle is often considered the either plastic or metal fitting on the end of hose. Many hoses do not have this small ringed connector and these fittings may need to be purchased separately. The type of hose nozzle that a person may choose typically depends on need. Some people want a hard, heavy-duty spray for clearing off patio or for use in washing cars. While a jet nozzle or pistol nozzle that produces this type of spray may be useful for other purposes, it is definitely inappropriate for other end-users. Try aiming this forceful spraying nozzles at plants, and it is most likely plants will get killed or shifted during in the process. For this reason, many consumers purchase another nozzles that produce a much finer and less powerful spray of water; for instance, mist or shower water patterns. Given the fact that people do not have an unlimited supply of water hose or cast to purchase hose nozzles, an alternative to switching back and forth is to find a hose nozzle that may be able to perform multiple functions. There are a 12

21 several of these types available on the market that can produce hard spray and soft ones. This makes them useful in few applications around the home, and certainly save time, since the only thing that might require adjustment is spray setting. Below picture illustrates different type of water pattern applications commonly Figure 2 Spray Patterns Adjustable hose nozzle types may come in several different designs. Some of nozzles have a handle which a rear trigger or front-pull lever that is pressed to produce spray, and might have a dial or soft dial, TPR rubberized, to set spray patterns. Others look more like the end of the hose setting, but can be tightened or loosened to create harder or softer spray. For instance in North American market, the best place to look for varieties is at hardware or home improvement stores; for instance, Home Depot, Lowe's, ACE Hardware, Turevalue. You can indeed to find it at general merchandise or 13

22 club stores as well; for example, Walmart, and Costco. There are plenty of online shopping destinations too. The advantage of shopping offline is that the customer can feel the weight of the nozzle, which may help to determine the quality. It is moreover easier to return a hose nozzle promptly to a local store, if it does not perform as promised. Figure 3 Jet Nozzle Components Exploring Sketch Drawing 14

23 Figure 4 Demonstration of Jet Nozzles with Connector Affixed onto Faucet Oscillating Sprinkler Oscillating Sprinklers have become more popular over recent years due to their ability to cover square-type areas and their ease in handling and adjusting to fit patterns. A sprinkler that has a bar that tips back and forth. It delivers a fine spray to a large area. It can be set for square or rectangular areas. The common oscillating lawn sprinkler has a hollow curved sprinkler arm, with a row of holes on top, which rocks slowly back and forth around a horizontal axis. Water delivers from the holes in a family of streams, forming a curtain of water that sweeps back and forth to cover an approximately rectangular region of lawn. 15

24 Range control adjusters & water flow control knob Figure 5 Oscillating Sprinkler Sketch Picture with Range Control Description Unscrew needle end-plug for cleaning jet nozzles Figure 6 Sketch Picture Demonstrates End-Plug for Cleaning Jet Nozzles 16

25 Figure 7 Oscillating Sprinkler Tube Components of Exploding Sketch Picture Figure 8 A Picture of Variable-Wide Oscillating Sprinkler 17

26 2.1.3 Impulse Sprinkler The sprinkler head pivots on a bearing on top of its threaded attachment nut. The head is driven in a circular motion by the force of the outgoing water, and at least one arm extends from the head. The sprinkler arm is repeatedly pushed back into the water stream by a spring. The arms impacting the water stream scatters the stream enabling a uniform watering area around the sprinkler. Some full-circle impact heads feature a second, short range, opposing "spreader" nozzle (Figure 9, 10), which fills the close range watering coverage role provided by the rapid "return cycle" on part-circle heads. By adjusting the position of the limiting collars, water flow can be directed from a full-circle pattern to one of less coverage. The limiting collars are fully adjustable by twisting with fingers to achieve the area of coverage desired. The uninterrupted flow path of impact heads makes them less vulnerable to damage and clogging by dirt and sand in the water. Thus, they are suitable for systems fed by well water. One defining feature of impact heads is they almost always have male pipe threads, as opposed to the female threads found on virtually all other sprinkler types. The sprinkler head was originally manufactured from metal. Since the 1970s, they have also been manufactured from thermoplastics for improved corrosion resistance. (Source: 18

27 It is also named Spreader Sprinklers, Stationary Pulsating Sprinklers or Pulsating Sprinklers. A very basic and broad definition of Pulsating Sprinklers is any sprinkler that is not underground and functions independently of other sprinklers. The first type of pulsating sprinklers is Stationary. Since "stationary" means not moving or not intended to be moved, a Stationary Pulsating Sprinkler either sits on a spike or spiked base. Figure 9 A Picture of Impulse Sprinkler with Metal Spike Figure 10 Descriptions of Impulse Sprinkler Head's functionality 19

28 2.1.4 Water wand A device screwed onto the end of a garden hose to reduce the pressure of the water without decreasing the volume. This product is with a length of tube attached to pattern nozzles or shower head. Figure 11 Illustration of Water Wand Multi-Pattern Head Figure 12 Illustration of Shower Wand Head Figure 13 Descriptions of Water Wand's functionality 20

29 2.1.5 Quick Connector / fitting / repair coupling A fitting that is designed to attach to a line quickly and efficiently. A quick connect fitting is often a one-piece fitting that is forced onto the end of a hose and locked into place. Also called a quick disconnections, quick release coupling, watering connectors. A hose coupling is a connector the end of a hose to connect (or couple) it with another hose or with a tap (or faucet) or a hose appliance, such as an irrigation sprinkler. It is usually made of steel, brass, stainless steel, zinc, aluminum or plastic. There are mainly 2 types of system connectors. One is North American system, and another is called European system. North American its hose, as attached, usually comes a male thread one side and another end is with female thread. For European system PVC hose comes with no fitting at all. Figure 14 Illustration of North American style of PVC hose 21

30 Figure 15 Illustration of European style of PVC hose Below pictures show North American fitting connectors, male, female, and mender. Coupling sizes are with 1/2 inch or 3/4 inch for consumer base usage other great than above sizes will be considered as industrial or professional market. Male Coupling Female Coupling Hose Mender Coupling Figure 16 Illustration of Fitting Connectors 22

31 Figure 17 Illustration of Repair Quick Connector of Demonstration Guide European connector system, otherwise, works versus North American. It is more user-friendly, and tool-free usage that means only by hands. It usually comes with 12.5mm (1/2 inch), 15.5mm (3/4") and 19mm connectors. The system, meanwhile, comes with STOP function or without STOP. Hose Connector with STOP valve is connected to the hose outlet. When a connecting device is disconnected; for instance, a nozzle or sprinkler, it stops the water automatically; when a device is connected, the water flows freely again. This 23

32 saves a trip to the tap when changing accessories. This piece will also save you time over and over again and stop those embarrassing times when you get water all over yourself by mistake. Attached pictures explain how European system works as well as its usage demonstration. 12.5mm Hose Quick Connector 12.5mm Hose Quick Connector with STOP 12.5mm Hose Mender Connector Figure 18 Illustrations of 12.5mm Hose Quick Connector 15.5mm Hose Quick Connector 15.5mm Hose Quick Connector with STOP 15.5mm Hose Mender Connector Figure 19 Illustrations of 15.5mm Hose Quick Connector 24

33 19mm Hose Quick Connector 19mm Hose Quick Connector with STOP 19mm Hose Mender Connector Figure 20 Illustrations of 19mm Hose Quick Connector Figure 21 Demonstration Guide of Nozzles with Connector Affixed onto Faucet 25

34 Figure 22 Hose Quick Connector Components of Exploding Sketch Pictures 2.2 Technologies / Automations This section demonstrates the automation invention. The production processes have been transformed from the tradition to high-tech automation. More than ever, businesses must pursue strategies that reduce costs, save time, and increase efficiency. Automation is a key tactic businesses often overlook when seeking ways get an edge over the competition. Automation in business is important to all businesses no matter the size. Smaller firms lack the armies of developers, contractors, budgets and adventures. Large firms, even with the might of these armies, are unable be flexible, thus hindering them from 26

35 reacting quickly to changes in the marketplace. Automating critical business processes can aid firms in becoming as nimble as a fox, or be able to operate worldwide despite having a small footprint. Here are reasons why automation in business is critical any company s survival: 1. An hour saved is a dollar earned: Staff can spend countless hours performing repetitive tasks. Generating reports and triggering data extracts are just a few tasks employees must run on a daily basis. Many times Staff must work overtime in order perform these tasks on time. Would it not be better to have a machine schedule these processes? If staff is no longer hindered by hours of boring tasks, they are now free to add even more value to the business. Rather than generating reports, they can spend time building better and more informative reports. Human error is eliminated, and staff may not have to work overtime. 2. A dollar saved is 2 dollars earned: Employees working overtime to perform tasks can often incur labor costs. Large tasks may require the business to hire more employees to keep up with the workload. Human error could cost a firm millions of dollars. Worse, no one may realize revenue the business could have gained if it had been more efficient. Often, it has been proven that using technology to automate business processes will save money. More than simply laying off staff, one of the 27

36 quickest ways to cut costs is by eliminating manual processes. The firm no longer has to pay staff overtime to complete tasks, and the need to hire new staff is avoided. 3. A dollar earned efficiently is worth 10 dollars: Simply put, "Do more with less effort". This translates to greater profits. Automating business processes means that the company can take on a greater task volume. Therefore the capacity to support more clients is available. Moreover, as machines are performing tasks, they complete them faster than a human would, further increasing capacity and service quality. Without the need to hire more staff, workforce management is much more viable. Automation in business simply allows firms operate with less staff, while increasing business volume, while still be able to quickly adapt to a changing business environment. 4. Demonstrable efficiency: No matter what the process, automation makes it more uniform and, typically, faster than a manual process. When you automate a process, you can determine the best possible way it should happen and make sure that it runs that way every time. 5. Happy and productive staff: Automated tasks keep people who can get 28

37 bored or irritated by doing repetitive tasks free from drudgery. It also liberates them to do more strategic and valuable activities for the company. Automation lies at the core of all of our modern conveniences. Machines are made to do repetitive, boring tasks without complaining. 6. Superior visibility: Automated tasks are easier to monitor than manual tasks. Audit trails and archiving functions can be worked right in to any automated process. Automated reports can also provide up-to-the-minute detail on the progress of any process eliminating the need for manual updates and ad hoc progress reports. 7. Reduced training overhead: Automating tasks reduces the cost of training people. The more that tasks are automated, the less time and money that needs to be spent on training individuals to manually do them. Complex tasks or business processes can be automated to function uniformly and completely so that people who might forget steps in the process do not have to worry about them. 8. Consistent product and service delivery: Automation increases consistency and predictability, increasing customer satisfaction. Customers expect consistency and predictability in whatever they need. 29

38 Whether it is business customers expecting constant, fast and uninterrupted internet access predictability builds customer confidence and satisfaction. With automation, processes are completed with complete uniformity all the time. 9. Ensure business runs like clockwork: Connecting automated processes through enterprise process automation means that you can set up automated if/then scenarios saving enormous amounts of time and effort Always know exactly where your processes are: Bringing together automated tasks enables the business to monitor and know exactly where they are in the supply chain, the manufacturing process or any multi-leveled business process. If processes are fully automated and connected, IT or business stakeholders simply check on real-time, automated monitors to get up-to-the-minute status when they need it instead of having to ask around or check various sources for clues. 11. No more business surprises: Connecting automated tasks throughout the enterprise can help prevent and predict potential business support issues before they become a crisis. If you had a factory, for example, imagine 30

39 how much money you could save if you received an automatic warning when the materials needed to run were held up by a supplier before it slows or shuts down operations. 12. Your vision for improvement: You gain an enterprise-level view of your operations for continuous improvement. When you start implementing automation on an enterprise level, you can see processes more clearly with visibility into areas of inefficiency and latency in that are ripe for improvement. For large-scale business processes that touch every department such as the financial close this means that you can provide a smooth and consistent process across silos, platforms and applications. 2.3 Product Patents Title: Automatic Water Inlet Switching Device for an Oscillating Sprinkler Inventor: King Yuan Wang Assignee: Yuan Mei Corp Application Number: 11/ Publication Number: 7,422,162 B2 Application Date: Publication Date:

40 The present invention relates to an automatic water inlet switching device for an oscillating sprinkler that has a sprinkle control unit having a blade equipped gear transmission set housed therein, working together with a water inlet switching device having an operation unit and a movable swinging seat. The bottom of the movable swinging seat is provided with two water stop ends in opposite to two outlet holes defined on a coupling unit with a concaved bounded space placed at the center thereof. An action stick of the operation unit is operable inside the bounded space so that in the water inlet switching operation the swinging angle of the action stick is limited within the bounded space and the action stick will move against the push end thereof so as to produce a built-up force to instantaneously spring away the movable swinging seat no matter what the water pressure is high or low in operation. Figure 23 Automatic Water Inlet Switching Device for Oscillating Sprinkler 32

41 Chapter 3 Lawn & Garden Global Gardening Market Profile While it was slower than 2011, we forecast shows that the DIY & gardening market will contract again in 2012, shrinking by 1.9%. The main factors behind this remains the weak housing market and tight disposable incomes. The market remains divergent, with gardening, which is supported by events and a more frugal customer, 1.5% up in 2012 while DIY is 3.6% down (Mintel's 2012). An analysis on the U.S. lawn and garden market, which requires and consumes the most market share of hose-end products in the world, is principally presented. U.S. market for lawn and garden products is in a state of post-recession recovery, and it forecast to reach $45.1 billion in the U.S. by a 20% increase over 2011 (Mintel's 2012). The global gardening and outdoor living industry was approximately worth to USD $187 billion in 2011, reports. Market growth maintained a yearly rate of 3% in the four-year period ending Plants, shrubs and growing media represented the leading market segment reaching almost USD $105 billion, or more than 55% of the overall market ( Global gardening and outdoor living market growth is expected to increase to a yearly rate of almost 3.5% between 2011 and 2016, when it should reach 33

42 almost USD $220 billion. The market encompasses various segments including garden tools and utensils, growing media, shrubs, plants and outdoor living. Garden buildings refer to all types of garden structure including sheds, greenhouses and gazebos, along with other items such as paving and fencing ( 3.1 Lawn & Garden Store Types - USA Market In this sector will be introducing different types of stores with its profile and functionality in USA market. Furthermore, gardening catalog pictures will be illustrated on each type of stores Home Improvement Stores While "home improvement" often refers to building projects that alter the structure of an existing home, it can also include improvements to lawns, gardens, and outdoor structures, such as gazebos and garages. This type of stores is the process of renovating or making additions to one's home. Often, a professional handyman is hired to perform the improvements but, typically, most improvements are done on an amateur DIY basis by the homeowner. Home or residential renovation is a USD $300 billion industry in the United States, and a USD $48 billion industry in Canada. The average cost per project 34

43 is USD $3,000 in the United States and USD $11,000 15,000 in Canada. There are several types of companies that contribute to the booming renovation industry. Supply businesses such as, Home Depot, Lowe's, Menards, and Roan Lansing provide all the materials and tools necessary to facilitate home renovations (wikipedia.org). 1. Home Depot: The Home Depot was founded in 1978 by Bernard Marcus, Arthur Blank, Ron Brill and Pat Farrah. The Home Depot's proposition was to build home-improvement superstores, larger than any of their competitors' facilities. Investment banker Ken Langone helped Marcus and Blank to secure the necessary capital. More than any retailer among the top 10, Home Depot has weathered the roughest patch in the company s history. Sales grew roughly 3.7% to $70.4 billion and profits grew 16.3% to nearly $3.9 billion, making the company the third most profitable retailer in the top 10, behind only Walmart and CVS Caremark. The news got a lot better for Home Depot this year as the conversation about the state of the nation s housing market has shifted to speculation about the arc of the recovery and away from whether the housing market has hit bottom. Same-store sale are poised to surge at Home Depot and rival Lowe s, if only more people were able to qualify for record low rates that are sure to be the envy of future generations. (Retailing Today, 2013.) Home Depot, today, stores average 105,000 ft 2 (9,755 m 2 ) in size and are organized warehouse-style, stocking a 35

44 large range of supplies. Home Depot's two largest stores are located in Union, New Jersey, which encompasses 217,000 ft 2 of space, and in Anaheim Hills, California where it encompasses 204,000 ft 2. The company color is a bright orange (PMS 165, CMYK 60M100Y, HEX FF6600), on signs, equipment and employee aprons 2. Lowe's: Lowe's is an chain of retail home improvement and appliance stores that has retail stores in the United States, Canada, and Mexico. Founded in 1946 in North Wilkesboro, North Carolina the chain has 1,754 stores in the United States, Canada and Mexico. Expansion into Canada began in 2007, with the opening of a store in Hamilton, Ontario, in early Lowe's started the construction of two stores in the Mexican city of Monterrey officially entering the Mexican market. In 2011 Lowe's released plans to build over 150 stores in Australia (as Masters Home Improvement) over the next five years, hoping to compete with the A$46 billion industry. Lowe's Companies, Inc. is 43rd on the Fortune 500 list. As of 2010, the chain is based in Mooresville, North Carolina. Lowe's is the second-largest hardware chain in the United States, behind The Home Depot and ahead of Menards. Globally, Lowe's is also the second-largest hardware chain, again, behind The Home Depot and ahead of the European stores B&Q (United Kingdom) and OBI (Germany). Founded in 1946, Lowe s has grown from a small hardware store to the second-largest home improvement retailer worldwide. Lowe's began in North Carolina, when Carl Buchan, part owner of the North 36

45 Wilkesboro Hardware Company, envisioned creating a chain of hardware stores. He purchased the company from his brother-in-law and partner and had the foresight to anticipate a post-world War II building boom. By eliminating wholesalers and dealing directly with manufacturers, Lowe s established a lasting reputation for low prices. 3. Menards: the privately held company, headquartered in Eau Claire, Wisconsin, has approximately 285 stores in 14 states: Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, Iowa, Missouri, Nebraska, Kansas, South Dakota, North Dakota, Wyoming, and Kentucky. It is the third largest home improvement chain in the United States, behind The Home Depot and Lowe's. All Menards stores share a common structure. Each store is primarily divided by departments: building materials, hardware, electrical, millwork,, wall coverings, plumbing and housewares, floor coverings, cabinets and appliances, and groceries. Other areas of the store include the front end (cashiers, office functions, carry outs) and the receiving crew (responsible for the lumber yard, shipments between the store and the distribution centers, and other delivery and merchandise logistics). In a typical store there is a store manager, two assistant managers, a department manager and one or two assistant managers for each department, and sales floor staff. In March 2005, the company opened the first two-story, 300,000 sq ft (28,000 m 2 ) Menards megastore in St. Paul, Minnesota. It followed in November 2006 with another two-story store in Hodgkins, 37

46 Illinois. In March 2009, Menards opened its flagship megastore in Waukesha, Wisconsin, a suburb of Milwaukee. The largest Menards in the United States, it has two glass elevators, two massive industrial escalators, and a snack shop. 4. Rona: Rona (Rona Inc.) is a Canadian distributor and retailer hardware, home improvement and gardening products. Rona was founded in Rona operates a network of over 516 stores and is the leading distributor and retailer in its market with more than employees. The Rona network represents annual retail sales of almost $6.0 billion. The company holds a 19% share of its nationwide market. The corporate headquarters are located in Boucherville, Quebec. Administration centers are located in Surrey, British Columbia in Calgary, Alberta and Toronto, Ontario. In the 1990s, under competitive pressure from The Home Depot (Canada) and other big box retailers, Rona established the Rona Home & Garden stores. Rona Home & Garden stores are large, ranging from 85,000 to 150,000 square feet (14,000 m 2 ), with a warehouse-style similar to The Home Depot and Lowe's. Faced with chronic under-performance in some markets outside of Quebec, Rona closed six big boxes in 2012, five in Ontario and one in British Columbia. While The Home Depot and Lowe's stores are all company owned, Rona Home & Garden stores are a combination of corporately owned and franchised, despite the massive investment required 38

47 to build such a store. As big box home improvement stores entered the market, Rona countered by bringing together successful owners of small Rona affiliate stores in Quebec to invest in one or more big box format stores. Many Rona Home & Garden locations in that province thus have local ownership, a tradition of the family hardware store, and a great deal of flexibility to adapt to the market at store level. Most of Rona's big-box format stores in the rest of Canada are entirely corporate-owned Hardware Stores Hardware stores (in a number of countries, "shops"), sometimes known as DIY (Do It Yourself) stores, sell household hardware for home improvement including: fasteners, hand tools, power tools, keys, locks, hinges, chains, plumbing supplies, electrical supplies, cleaning products, housewares, tools, utensils, paint, and lawn and garden products directly to consumers for use at home or for business. Many hardware stores have specialty departments unique to its region or its owner's interests. These departments include hunting and fishing supplies, plants and nursery products, marine and boating supplies, pet food and supplies, farm and ranch supplies including animal feed, swimming pool chemicals, home-brewing supplies and canning supplies. The four largest hardware retailers in the world are The Home Depot, Lowe's (both of the United States), Kingfisher of the United Kingdom, and OBI of Germany. 39

48 Larger hardware stores may sell small amounts of building supplies including lumber, flooring, roofing materials and fencing. Such stores are often referred to as home improvement centers or home centers. There may be fewer hardware stores in the U.S. now than in years past, but according to the U.S. Census Bureau, there were still 14,300 hardware stores in the U.S. in 2005, employing on average 10 employees each. Even in the face of competition from large chain stores (commonly referred to as big box or destination hardware stores; for example., The Home Depot, Lowe's and Menards). In the U.S. there are four major nationwide wholesale suppliers to hardware stores. All four report more than $1 billion (US Dollars) in sales annually. Three of them operate as retailers' cooperatives: Do It Best Corp, from Fort Wayne Indiana, True Value Company from Chicago Illinois and ACE Hardware from Oakbrook Illinois Canadian hardware retailers are: Home Hardware, Rona, BMR Group and Reno Depot. Aikenhead's Hardware became the Canadian unit of The Home Depot in Canadian Tire, Central, Kent Building Supplies, Lowe's and many smaller chains also sell hardware in Canada. In the United Kingdom, hardware shops are also sometimes known as ironmongers, and larger, out-of-town hardware shops may be called "Do It Yourself" or DIY centers. British chain stores include B&Q, Homebase, and 40

49 Wickes. European and the Middle East stores include: baumax, Bauhaus, Brico, Brico Depot, Bricorama, Bricostore, Castorama, Clas Ohlson, EpiCentre K, Hornbach, Hubo Belgium, Hubo Netherlands, Interhome, Leroy Merlin, Mr. Bricolage, OBI, Praktiker, SACO Hardware. 1. ACE Hardware: The Ace Hardware Corporation is a retailers' cooperative based in Oak Brook, Illinois, United States. It has 4,077 (2012) hardware stores, and does over $3 billion in retail hardware sales annually. Ace Hardware was founded in 1924 by Richard Hesse, E. Gunnard Lindquist, Frank Burke, and Oscar Fisher in Chicago, Illinois. Ace Hardware, incorporated in 1928 as Ace Stores Inc., was founded to provide a centralized purchasing organization to supply the founders' and members' stores. The company was named after the ace fighter pilots of World War I, who were able to overcome all odds. Its retail network expanded to hundreds of dealers by 1949, when annual sales reached about $10 million. In 2012, Ace Hardware acquired its largest member, Westlake Ace Hardware, for $88 million. 2. Turevalue: The True Value Company is an American retailer-owned hardware cooperative with over 5,000 independent retail locations worldwide. Members of the True Value cooperative own their individual stores and operate independently of True Value Company. True Value 41

50 Company traces its roots to four hardware cooperatives and a hardware wholesaler: American Hardware & Supply (ServiStar), Coast to Coast Corporation, Cotter & Company (True Value), and the Midwest-based Hibbard Spencer Bartlett & Company. Home & Garden Showplace is the garden center store identity of the True Value Company. It was started by ServiStar to help build their lawn and garden sales. Today there are over 260 Home & Garden Showplace stores across the United States. Each store is independently owned and purchases merchandise through the True Value distribution centers and buys from many quality growers of plants through various True Value buying programs. 3. Do It Best: Do it Best Corp., formerly known as Hardware Wholesalers, Inc. (HWI), is a member-owned hardware, lumber, and building materials cooperative based in Fort Wayne, Indiana. Do it Best Corp. is the second-largest co-op in the industry with sales of $2.68 billion in FY Do it Best Corp. does not mandate store identities, so member-owners may or may not display the Do it Best brand name in their businesses. Do it Best Corp. member stores (3800) are all independently owned and typically carry their own name, but may also include the names Do it Best and Do it center as a part of the store signage. Each store is serviced from one of eight Do it Best Corp. distribution centers around the United States but can also get products directly from the manufacturer. The stores have joined together as 42

51 part of the Do it Best Corp. cooperative to buy in huge volume to offer you lower prices. 4. Home Hardware: Home Hardware is a privately held Canadian home improvement, construction materials, and furniture retailer. Co-founded in 1964 by Walter Hachborn and headquartered in St. Jacobs, Ontario, the chain is cooperatively owned by over 1000 independently owned member stores. In 1981 the Eastern-based Home Hardware merged with Western-based Link Hardware to create a national chain. Home Hardware has survived the expansion of The Home Depot into Canada, beginning in 1994, as well as the expansion of a domestic competitor, Rona, into the big box arena Discount Stores A discount store is a type of department store, which sells products at prices lower than those asked by traditional retail outlets. Most discount department stores offer a wide assortment of goods; others specialize in such merchandise as jewelry, electronic equipment, or electrical appliances. Discount stores are not variety stores, which sell goods at a single price-point or multiples thereof ( 1, $2, etc.). Discount stores differ from variety stores in that they sell many name-brand products, and because of the wide price range of the items offered. Following World War II, a number of retail establishments in the U.S. began to 43

52 pursue a high-volume, low-profit-margin strategy designed to attract price-conscious consumers. This strategy has received renewed interest from retailers and customers alike stemming from the Great Recession that began in 2009 that forced buyers to revisit the approach to the products they wanted. Currently Walmart, the largest retailer in the world, operates more than 1,300 discount stores in the U.S. Target and Kmart are Wal-Mart's top competitors. 1. Walmart: Walmart got its start in Arkansas in 1962, Sam Walton. Since then, though our company has expanded across borders and overseas, the U.S. remains the heart of our business where continues to test new ideas, learn from our customers and improve our ability to help people save money and live better. Wal-Mart Stores, Inc., branded as Walmart is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world's largest public corporation according to the Fortune Global 500 list in 2014, the biggest private employer in the world with over two million employees, and the largest retailer in the world. Walmart remains a family-owned business, as the company is controlled by the Walton family, who own over 50 percent of Walmart through their holding company, Walton Enterprises. It is also one of the world's most valuable companies. Today, Walmart employs more than 1.3 million U.S. associates at more than 4,800 stores and clubs 44

53 nationwide. Last year, we promoted about 170,000 people to jobs with more responsibility and higher pay. In the U.S., the average, full-time hourly wage is $ Small formats include Amigo, Supermercado, Walmart Express, Walmart on Campus and Super Ahorros banners. Table 2 Store Types and Store Numbers of Walmart U.S.A. United States at a glance Total Retail Units as of April 30, Walmart Supercenters 3313 Neigh-brotherhood Markets 359 Walmart Discount Stores 499 Small Format Stores 62 Sam's Club 635 Source: 2. Target: The Target Corporation is an American retailing company, founded in 1902 and headquartered in Minneapolis, Minnesota.. It is the second-largest discount retailer in the United States, Walmart being the largest. The company is ranked 36th on the Fortune 500 as of Its bullseye trademark is licensed to Wesfarmers, owners of the separate Target Australia chain, which is unrelated to Target Corporation. On January 22, 2014, Target informed workers that it is terminating 475 positions at its 45

54 offices globally. On March 5, 2014, Target Corp.'s Chief Information Officer Beth Jacob resigned, having been in the role since 2008; this is thought to be due to the company's overhaul of its information security systems. The first Target store was opened in 1962 in Roseville, Minnesota. Target grew and eventually became the largest division of Dayton Hudson Corporation, culminating in the company being renamed as Target Corporation in August In early 2013, Target expanded into Canada and now operates over 100 locations through its Canadian subsidiary. When it purchased the leaseholds for up to 220 stores of the Canadian sale chain Zellers, which is owned by the Hudson's Bay Company. The deal was announced to have been made for 1.8 billion dollars. The stores would continue to operate as Zellers outlets until Target decided which sites it will renovate and rebrand under its name and logo. The company has also stated that the company wishes to provide Canadians with a "true Target-brand experience", hinting that its product selection in Canada could vary little from that found in its United States stores. Target Canada plans to have at least stores opened in Canada by 2013 and Target currently has 273 Zellers stores. 3. K-Mart: Kmart (sometimes stylized as K-Mart) is an American chain of discount department stores headquartered in Illinois, United States. The chain purchased Sears in 2005, forming a new corporation under the name 46

55 Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in the world, behind Walmart and Target. Kmart is the second largest division of holdings and has current revenues of $15.3 billion. Kmart competes directly with stores like Wal-Mart and Target. As of January 2012, Kmart operated 1,279 discount stores, and 26 Super Centers, which carry groceries and produce similar to Wal-Mart Supercenters. Merchandise includes consumer electronics, seasonal items, outdoor merchandise, sporting goods, toys, lawn and garden, apparel, and groceries. Kmart also offers Sears proprietary brands such as Kenmore, Craftsman, and DieHard, and 22 Kmart stores offer Sears Auto Centers. Of Holdings 38 domestic warehouses, 23 primarily support Sears, 11 primarily support Kmart, and the remaining 4 support both. Operations of Kmart and Sears Domestic are far more integrated than those of Sears Canada. Besides sharing transportation and logistics, they also share a headquarters and executive management team. Public filings state that $488 million in synergies were realized in the fiscal year following the merger Warehouse Club Stores A warehouse club is a retail store, usually selling a wide variety of merchandise, in which customers are required to buy large, wholesale quantities of the store's products, which makes these clubs attractive to both bargain 47

56 hunters and small business owners. The clubs are able to keep prices low due to the no-frills format of the stores. In addition, customers may be required to pay annual membership fees in order to shop. 1. Sam's Club: Sam's West, Inc. (doing business as Sam's Club) is an American chain of membership-only retail warehouse clubs owned and operated by Walmart, founded in 1983 and named after Walmart founder Sam Walton. As of 2012 Sam's Club chain serves 47 million U.S. and Puerto Rican members and is the 8th largest U.S. retailer. As of January 31, 2008, Sam's Club ranks second in sales volume among warehouse clubs with 57 billion in sales behind Costco, despite the fact that Sam's has more retail locations. As of May 1, 2012, Sam's Club operated 612 membership warehouse clubs, the vast majority in the U.S., but also in Brazil, China and Mexico. As of January 31, 2009, Sam's Club operated 602 membership warehouse clubs in 47 U.S. states (Oregon, Fhode Island and Vermont are the only states which do not have a Sam's Club), as well as Puerto Rico (11), Brazil (13), China (1 - Shenzhen). Locations generally range in size from 70, ,000 sq ft (6,500 17,700 m 2 ), with an average club size of approximately 133,000 sq ft (12,400 m 2 ). 2. Costco: Costco Wholesale Corporation is a membership-only warehouse club that provides a wide selection of merchandise. As of July 2012, it is the 48

57 second largest retailer in the United States, the seventh largest retailer in the world and the largest membership warehouse club chain in the United States. Costco is headquartered in Issaquah, Washington, United States and was founded in 1976 in San Diego, CA with its first warehouse in Seattle. Today, Costco has a total of 635 locations. In the United Kingdom (25), Australia (5), Canada (87), Mexico (33), Taiwan (9), South Korea (9), Japan (15), Spain (1) and the United States (451) Department Stores A department store is a retail establishment with a building open to the public, offering a wide range of consumer goods. It typically allows shoppers to choose between multiple merchandise lines, at variable price points, in different product categories known as "departments". 1. Sears: Richard Sears began retailing through a catalog first published in 1888, initially targeting rural customers who had limited access to fairly priced goods. By 1893, sales had already exceeded $400,000. By 1894, the catalog had grown to 322 pages and offered sewing machines, bicycles, sporting goods, and even automobiles, in addition to numerous other items. Chicago clothing manufacturer Julius Rosenwald joined the company in 1895 and began streamlining operations. Within a year, the catalog had expanded to 532 pages and offered dolls, refrigerators, and 49

58 groceries, and Sales grew past $750,000. In 1906, Sears opened a catalog production facility in a new building, the Sears Merchandise Building Tower (Turnaround of Sears Holdings, 2013). The company opened its first retail store in 1925 in the lower levels of its headquarters. The first freestanding retail store opened later that year in Evansville, Indiana. Three more department stores opened around Chicago in Sears continued to build new stores as well as buy out other merchants, including Becker-Ryan, Holly Stores, Dunham Stores, and Schiller Millinery. Sears also formed Homart, a mall development company, in By the 1980s, Sears was becoming a major conglomerate. It entered the cafeteria business in by acquiring Furr s Cafeteria, and three years later acquired Bishop Buffets. It also acquired Dean Witter, a brokerage service, Caldwell Banker, a real estate firm, and Pay Less Drug Stores. Sears also started Prodigy, an online service provider through a joint venture with IBM in 1984, and Discover, a consumer credit card company in Retailer Overview There are vast number and type of retailers across U.S. that offer lawn and garden products. As a result it is not possible to over the full range of retailers. 50

59 Below are snapshots of select leading large home improvement stores as instance that are active in or unique to the lawn and garden products market Home Depot Home Depot is a leading retailer among large home stores in the lawn and garden market as a result of its offering a diverse range of outdoor products at a variety of price points. It serves as consumers go-to source for anything from garden tools, plants, and greenhouse equipment, to lawn turf and fertilizer and pond accessories. Home Depot also prides itself on providing how-to instructions for lawn and garden tasks. As of April 2012, consumers could visit the retailer s garden center website to access the Home Depot Garden Club s video and print how-to instructions for weekend projects such as creating a compost bin, container garden, and even a mailbox garden. In addition to instructional videos and fliers, consumers can choose to join the Garden Club to receive shopping discounts, region-specific lawn and garden ideas, and access to in-store workshops Lowe's Similar to Home Depot, Lowe s stores offer consumers a variety of lawn and garden products ranging across price points, as well as educational resources for learning how to efficiently and creatively maintain their outdoor spaces. 51

60 Print articles and videos are available on the Garden Center and Lawn Care & Landscaping sections of the websites, as are tools like a mulch calculator which uses square footage estimates to determine the amount of mulch needed for garden and landscaping projects. Lowe s also exclusively markets Growums themed box gardens designed to entice children to participate in gardening activities and offers plant subscriptions through which consumers receive a variety of seasonal or holiday-themed container plants in full bloom by delivery. As of April 2012 prices ranged from $89 for a three-month subscription to $299 for a 12-month subscription and included the following monthly plant offerings: January: Pick Me Up Kalanchoe February: Orchid March: Cyclamen April: Spring Fever Cyclamen May: Mother s Love Hydrangea June: Summer Foliage July: Succulent Summer Garden August: African Violet September: Hint of Fall Dish Garden October: Fall Indoor Mum November: Christmas Cactus December: Holiday Poinsettia 52

61 3.2.3 Menards Menards is a Midwestern home improvement supply chain markets lawn and garden products that include decorative pieces such as lawn fountains, statues, and trellises, as well as planters and window boxes. Similar to home improvement store retailers Home Depot and Lowe s, Menards also aims to provide educational lawn maintenance and gardening resources. Part of the chain s larger How-To Center, the Menards Garden Center has instructional videos and articles as well as a Vegetable Library and Garden Dictionary that can be accessed online. The library houses pictures of common vegetables to be used as an identification aid, and the dictionary defines common gardening terms ranging from types of soil and grass to different levels of sun exposure. Consumers can also join a garden center list and choose from among a variety of and promotion-specific mailings as well as lawn and garden tips, tricks, and general articles to regularly receive in their inbox. 3.3 A Growing Marketplace of Lawn & Garden Business USA Market A few perspectives to look into a growing marketplace of Lawn & Garden business, consumer demographics, trends, market size, benefits, green business, early-friendly factors, and home factors. Analyses of the market revealed the following current trends. 53

62 3.3.1 Consumer Participation & Demographics 82 million households participated in one or more types of lawn and garden activities in 2011, according to the National Gardening Association. The most popular activities included lawn care, growing indoor houseplants, flower gardening and landscaping. Category Growth Factors: A. Do-it-yourself (DIY) surge B. Baby boomers are proud of their houses and style conscious, accounting for one-third of the market C. Vegetable gardening as the consumer desire for homegrown, cost-saving produce is increasing. U.S. household retail sales for vegetable gardening supplies grew 22 percent from 2011 to 2012, and 46 percent of gardeners are 45 years of age or older. Home & Garden Television (HGTV) is one of the fastest growing cable networks in television history, channel operating in United State and Canada with its slogan "Stay At Home", launching in December 1994 with 6.5 million homes in 44 markets. Today, the network reaches more than 95 million homes and is distributed in 175 countries (Industry Study with Forecasts for 2016 & 2021). 54

63 3.3.2 Consumer Spending Trends Consumers spent an average of $428 per household on DIY lawn and garden activities in 2012, or 7 percent more than the $401 average spent in Casual gardeners spent an average of $435 on lawn and garden products in 2012, roughly 12 percent above the U.S. average. Their total spending of $14.8 billion accounts for 42 percent of the consumer lawn and garden market and represents the highest figure for any of the customer groups. Households that spent the most on their lawns and gardens in 2012 included people 55 years of age and older, college graduates, married households, households with annual incomes of $75,000 and over, households in the South, two-person households and households with no children at home (Industry Study with Forecasts for 2016 & 2021) Lawn and Garden Market Size Lawn and garden products and services are a $24 billion industry in the U.S. Sales of organic lawn and garden products increased by 64 percent between 2009 and 2012 and are expected to continue growing at annual rates of 12 to 14 percent for the next three years ( Nurseries and garden centers are beginning to respond to the needs of urban gardeners by opening garden centers. According to Nursery Retailer magazine, urban garden centers are emerging as a compelling new sector and are helping to 55

64 transform the independent garden center business. The demand for small-space gardening is expected to increase for a number of reasons: A. The amount of space available for gardening in new homes has been declining for the past 15 years, while floor space has been growing, according to the U.S. Census Bureau. B. According to the Journal of the American Planning Association, the demand for smaller homes will increase significantly in the next years. The lawn is one of America's leading crops, amounting to at least twice the acreage planted in cotton. It is estimated that there are nearly 40 million acres of turf in the United States, distributed as follows: A. 58 million residential lawns B. More than 16,000 golf-course facilities (with one or more courses each) C. About 700,000 athletic fields (National Gardening Reports, 2012, 2013) Benefits of Gardening Responses to the National Gardening Association's (NGA) 2011 survey of households with a lawn or garden show the following key benefits: A. 50% view gardening as a way for them to decorate and beautify 56

65 B. 49% view food gardening as a way to grow fresh and nutritious edibles C. 46% say gardening adds curb appeal to their homes D. 43% say gardening makes their outdoor space more livable E. 41% say gardening adds value to their home real estate investment F. 35% say gardening is a great form of exercise G. 34% say gardening helps them relax H. 33% say gardening helps them connect with nature I. 31% say gardening is a great educational tool for children J. 29% say gardening is a way to be creative (National Gardening Reports, 2012, 2013) Benefits of Green Lawns and Other Green Spaces Green lawns and other green spaces have many benefits as following: A. Lawns convert carbon dioxide into oxygen; an average lawn generates enough oxygen for a family of four B. The cooling effect of eight front lawns can equal 70 tons of air conditioning enough for 16 average homes C. Grasses in the U.S. trap an estimated 12 million tons of dust and dirt from the air annually D. An acre of grass will absorb hundreds of pounds of sulfur dioxide per year; the haze created by these pollutants can reduce the sunlight by as much as 15 percent. 57

66 E. Lawns help prevent erosion that is typically caused by runoff; the average 10,000 square-foot lawn can absorb more than 6,000 gallons of rainwater Earth-friendly factors Green spaces also bring important health benefits: Children living in inner-city neighborhoods with more green space have a lower incidence of obesity, gaining 13 percent less weight over a two-year period than those living in environments with more concrete and fewer trees. These green spaces are also helping to ensure there will be plenty to enjoy on this planet for some time to come. Lawns provide environment benefits like cooling and relief from the heat of the sun, cement and pavement. A well-maintained lawn also prevents run-off from yards into streets and storm sewers. Proper landscaping reduces nitrate leaching from the soil into the water supply and reduces surface water runoff, keeping phosphorus and other pollutants out of our waterways and preventing septic system overload. Your lawn also is providing a service to your health, too. A 2,500-squarefoot plot of turf absorbs carbon dioxide from the atmosphere and releases enough oxygen for a family of four to breathe, according to the Turfgrass Resource Center. In 58

67 addition, trees, shrubs and turf remove smoke, dust and other pollutants from the air, making the air even easier to breathe. In the end, a lawn is really a personal supply of health and tranquility, at a bargain price. Landscapes add significantly to property values and provide a calming place to unwind after a long day at work ( Lawn Service Industry Today, the $5 billion do-it-for-me lawn service industry cares for the lawns of 10.5 million single-family households in the United States, which accounts for 75 percent of the total lawn care dollars spent. Homeowners spent a record $44.7 billion in 2010 to hire lawn care and landscape maintenance services, landscape installation and construction services, tree care services, and landscape design services. 30 percent of all households nationwide, or an estimated 34.5 million households, currently hire at least one type of lawn and landscape service (National Gardening Reports, 2012, 2013) Home Investment for Additional Values People perceive that a beautiful lawn and garden can improve the value of a home by up to 15 percent. According to Money magazine, while remodeling a kitchen or bathroom may return only 75 percent and 20 percent of its cost 59

68 respectively, landscaping investments are estimated to return at least 100 percent and up to 200 percent of their costs. 95 percent of the members of the Society of Real Estate Appraisers say landscaping adds to property value, and 99 percent agree landscaping increases speed of home sales (National Gardening Reports, 2012, 2013) Outdoor Living 42 percent of Americans report using their lawn/garden for some type of entertaining at least every three months. 60 percent of Americans report engaging in gardening activities in their yards at least once a week. Several cultural trends are driving increased participation in garden activities and creating livable outdoor spaces. Chapter 4 Competitiveness Methodology The chapter presents an analysis of the lawn & garden industry of leading players and its position within U.S. market. Both the external and internal analyses are included, a brief history and the driving forces of each players, as well as the SWOT analysis and product patents analysis. There are a vast number and type of retailers across the U.S. that offer lawn and garden products. As a result it is not possible to cover the full range of retailers. Below are snapshots of select key retailers that are active in or unique to the lawn and 60

69 garden products market. To define an effective strategy, senior managers must take into account the core competences of the organizations, and they have to or even must scan the environment. They, moreover, must determine what competitors are doing, or planning to do, and take that into account. They must critically examine other factors that could have either positive or negative effects. This is sometimes referred to as the SWOT approach (strengths, weaknesses, opportunities, and threats).strengths and weaknesses have an internal focus and are typically evaluated by operations people. Threats and opportunities have an external focus and are typically evaluated by marketing people. 4.1 Key Importers Background & History Introduces a brief history and background of each key player as well as its current main customers of the lawn & garden businesses in U.S. market; furthermore, store pictures will be additionally illustrated as the reference L.R. Nelson Corporation L.R. Nelson Corporation ( was founded in 1904 by Lewen R. Nelson and taken over by CEO David Ransburg in 1972 and is headquartered in Peoria, Illinois. Since 1911, Nelson has been 61

70 following the market trend and developing products to give the solution to irrigation success. The company takes tomorrow's technologies and apply them to today's applications (Nelson 2009 Product Catalog). Nelson Corporation provides sprinkler, irrigation, and landscape products. The company offers lawn watering products, such as oscillating, stationary, whirling, impact, rotor gear drive, and traveling sprinklers. The company sells its products through retailers and distributors. Among the first sprinkler manufacturers in the United States. Nelson has been in the watering industry since 1911, after nearly a hundred years, the company was still driving the industry with innovative products for lawns and gardens. The company had sold through Home Depot, Walmart, Target, Sears, Costco, Menard, as the major vendor, and other retailers and distributors. In 2009, Bosch acquired LR Nelson, a maker of lawn and garden products, including ponds, and merges the Gilmour and Nelson brands into Bosch - Garden and Watering ( In the same year the company sold its Nelson Consumer Products business (active in the residential market) and its Sunterra subsidiary (which distributed decorative home and garden items) to Robert Bosch. L.R. Nelson intended to focus on its commercial business, but was unable to survive its financial troubles, and reorganized company organization structure with lacking in management. After the declined 62

71 businesses, Nelson started moving manufacturing from the U.S. to overseas, mainly China suppliers. One year after of outsourcing, poor quality control and unable to delivery orders on time that have seriously jeopardize its businesses, as the results. From my personal market research, Nelson currently has only sold a few items into Walmart, Home Depot, ACE, and Turevalue. Nelson has lost many businesses since 2009 Bosch acquired. Figure 24 Walmart Store Snapshot: Rowland Heights, CA / 03-May

72 Figure 25 Home Depot Store Snapshot: El Monte, CA / 05-May Gilmour Inc. Gilmour exists to meet the needs of serious gardeners and homeowners who demand the very best for their lawns and gardens. Gilmour has a combined 350 years of lawn and garden experience, providing superior quality service. The Gilmour reputation for this quality and value begins with developing new and innovative ideas for lawn and garden care products, and on-going improvements in our existing products, and its headquarters office is located Somerset, PA, U.S ( As pervious mentioned, in 2009 Bosch acquired LR Nelson, a maker of 64

73 lawn and garden products, including ponds, and merges the Gilmour and Nelson brands into Bosch - Garden and Watering. This acquisition had most likely caused the same issues as Nelson was. From market share point of view, Gilmour is largest supplier for Lowe's of lawn & garden business that means most of items are exclusive. 65

74 Figure 26 Lowe's Store Snapshot: Charlotte, NC / 28-May Orbit Irrigation Products Inc Founded more than 40 years ago by K.C. Ericksen, CEO & President, and its headquarter is located 845 N. Overland Rd. North Salt Lake, UT, U.S. Orbit ( is one of the leading manufacturers and suppliers of irrigation and watering products in the world. Orbit distributes more than 2,000 products to landscapers, gardeners, and homeowners in 40 countries across five continents. Its corporate statement is, "we meet or exceed the needs and expectations of our customers" (Orbit Product Catalog 2006). Its goal is to be the best at providing irrigation and watering products that meet or exceed each individual customer s needs. This is why Orbit continually push itself to provide better customer support and to design better products products that beautify your lawn and garden, conserve your community s water, reduce your water bill, and make your life easier(orbit Product Catalogue). 66

75 A complete line of products to include 1) underground, 2) hose-end, 3) micro-watering and drip irrigation, and 4) misting products (Hoovers, D&B Company).Orbit Irrigation believes that you should spray it and not say it. The company makes irrigation products such as sprinklers, timers, and valves for the residential and commercial markets. Orbit also makes low volume and micro irrigation products that focus on conserving water. The company's brands include SunMate, Arizona Mist, DripMaster, and WaterMaster. Orbit has manufacturing facilities in the US and in China. Products can be found in retail stores such as Home Depot, Wal-Mart, Costco, and other middle to small retailers. Holding company Pro-Mark owns Orbit Irrigation. Currently it has around half of the U.S the lawn & garden business market share, and is the biggest vendor for Walmart. Figure 27 Walmart Store Snapshot: Charlotte, NC / 28-March

76 Figure 28 Costco Store Snapshot: Sheboygan, WI / 03-March-2014 Figure 29 Costco Store Snapshot: Mississauga, ON / 01-April Melnor Inc. In 1948 Melnor introduced to gardeners the first oscillating sprinkler. Most modern oscillating sprinklers are still based on that Melnor original. More than five decades later, Melnor, Inc. is one of the leading producers of lawn and garden watering products in North America. The name 68

77 Melnor has become synonymous with innovation and high-quality (Melnor Product Catalogue, 2002). Melnor's commitment is to continue the tradition of providing exciting products that will satisfy every homeowner¹s needs. Our goal is to be the first in innovation and customer satisfaction in the lawn and garden market (Melnor Product Catalogue, 2009).The company's corporate headquarters are located in Winchester, Virginia. Products are distributed from facilities in Winchester and Sumner, Washington. Table 3 Melnor s History 1948 Metal Oscillating Sprinklers; Hose Repair Kits 1959 Multi-Pattern Turret Sprinklers 1962 Traveling Sprinkler 1966 Time-a-matic Sprinkler/Timer 1984 Low Profile Oscillating Sprinklers 1997 Front Trigger Zinc Clad AquaGun ; New Generation Electronic AquaTimers 1998 Front Trigger Zinc AquaGun 2000 Drip Capable Electronic AquaTimer 2004 Two-Zone Electronic AquaTimer 2006 World's easiest-to-program Electronic AquaTimers Melnor webpage ( Melnor product line offers digital, electronic, mechanical, and flow meter water timers; automatic rain delay products; oscillating, pulsating, turbo drive rotary, and stationery and specialty sprinklers; nozzles and spray wands; flat 69

78 soaker hoses; product and faucet adapters, couplings, hose end repair products, hose connector kits, and connector kits; and hose accessories, including hose repair products, fittings, hose connectors, and accessories. The company offers its products through online retailers. Melnor, Inc. was founded in 1946 and is based in Winchester, Virginia. Considering recently market changes, Melnor has a relatively steady business. Its products are neither particularly well designed nor unique, but they occupy a reasonably sized market. Melnor's designs have some "American" feel and are distinguished by the "three-strip trademark". Melnor has strong relationship with its customers, especially with Home Depot, Meijer, Truevalue, Sears, and ACE Hardware. Melnor, indeed, is the main supplier for prior mentioned stores. Figure 30 Home Depot Store Snapshot: El Monte, CA / 04-May

79 Figure 31 Target Store Snapshot: Rogers, AR / 26-March Patent & Innovation Analysis Competition can stimulate innovation as well as patent occurrence. Competition among firms can spur the invention of new or better products or more efficient processes. Firms may race to be the first to market an innovative technology as being a pioneer. Companies may invent lower cost manufacturing processes, thereby increasing their profits and enhancing their ability to compete with others. This following pie chart presents each leading player holds numbers of lawn and garden product patents from 1992 till

80 Source: Yuan Mei Corp. (2013) Figure 32 Main Players Hold Numbers of Hose-End Product Patents Above chart certainly illustrates Bosch is on the top of patent holders after Nelson and Gilmour were merged, Gardena its brand is the most recognized in Garden business, and Gardena is a market leader in Europe (Wikipedia); however, it is the least market shares in U.S. market, and its name is not in the leading players either. The purpose to show its patent numbers in U.S. market is to demonstrate how other players patents comparing with Gardena. Melnor will be second and Orbit is the last. Since the source came from Yuan Mei Corp (its brand name goes to Aquastar), the company, indeed, purposes to show its patent numbers matching with others. 72