Rona

1. The industry is worth about 34 millions in 2005 while Rona holds 15% of the market; that equals

5.1 billions dollars. The annual growth also is expected to growth 6% for future years and 9%

increase for industry total sales. These numbers are not impressive to me but they shows that

the hardware industry would be stable in long term and it’s safe to invest in.

2. A typical new owner would spend 10000$ for renovation projects in the first year of home

ownership and 70% of Canadian residential dwellings were over 20 years old and will require

major renovations in near futures. This creates an amazing opportunity for big hardware

retailers such as Rona, Canadian Tire, Home Depot, Home Hardware to exploit these potential

customers. In another word, the market is not saturated, It still has many open spaces for major

of organizations in the hardware industry to growth and guarantee their future growths are

positive. Besides, the competitions will not be severe rivalry; companies won’t sacrifice their

profit to compete.

3. The industry’s sales also are affected by weather, economic growth, unemployment rate,

interest rate, business and credit conditions. However, the Canadian economic growth is

estimated about 3% in 2006 and 2007. I consider 3% growth rate is high for a developed country

like Canada and while the increase of interest rate won’t have big impact to the economy. To

sum up, the Canadian economy will be healthy and stable in the next few years. This will reduce

further risks of investments

4. Lumber and plywood price indexes dropped in 2005 are an amazing opportunity for companies

in the hardware industry to generate higher profit through cutting down production costs.

Therefore, hardware organization such as Rona can be more appeal to the investors.

1. Any of these following will increase the risk of the investment in the hardware industry or

Rona particularly: Long winters, unstable national economy, high unemployment rate, high...