LNT SWOT

Strengths: Leading Market Position, Improved Inventory Management, Diversified Product Range

Weaknesses: Internal Control Issues, Decreasing Profitability, Decline in Efficient Usage of Retail
Space

Opportunities: Lifting of import quota by WTO, Growth in children's room decor market, Positive
outlook for US household linen market, New store openings

Threats: Decline in world cotton production, Wal-Mart eyes the home furnishings market, Rising
retail rental rates

Strategy of BBBY

• Able to differentiate itself from Walmart and Target

• Differentiation at store level.

• Merchandise shipped directly to stores

Strategy of LNT

• Built centralised warehouses

• Brought in direct competition with Target and Walmart

How does their strategic positioning differ?

 LNT strategically positioned itself by building centralised warehouses in North Carolina. This
is apparently a cost leadership strategy – centralisation and standardisation reduce costs.
(couldn’t differentiate product offerings – couldn’t satisfy customers)
 BBBY had some elements of differentiation – satisfied customers due to the ability of
customisation of product offerings at a store level

Why should they change (LNT) from centralisation and standardisation?

• Inflexibility

• Ability to quickly ship to different stores cannot occur

• Unable to adjust products

• LNT had to compete on price not differentiation as BBBY

• LNT cannot differentiate on the store level and satisfy the needs of the customers