Renad Kerdasi

Challenges of Integrating Lowe's and Rona in Canada: A Geographical Appraisal ©2016

On May 20, 2016, the U.S. retailer Lowe's announced that it has completed its acquisition of the Canadian retailer Rona. The acquisition is a strategy to accelerate its growth in the Canadian market. The purpose of this research is to analyze the challenges that Lowe's may face after the merger. The research has four objectives: (1) to examine Lowe's market strategy and assess its store network patterns at a national level; (2) to perform a market analysis for the Toronto CMA to estimate the demand for home improvement products; (3) to evaluate the efficiency of existing stores in the wake of the merger to determine the possibility of cannibalization; and, (4) to identify market gaps in the Toronto CMA. Through this research, it is revealed that the best market strategy for Lowe's to be successful is a dual-brand strategy. However, the study finds the possibility of cannibalization between Lowe's and Rona stores in the Toronto CMA, and therefore there is a need to perform store network rationalization.