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Home depot and its operation strategy
Home depot business model strategy
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More handpicked essays just for you.
Home depot and its operation strategy
Home depot business model strategy
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Home Depot is a multi-million dollar industry, with over 2,000 stores around the world. They supply contractors with tools and products to build a house or supply Do-It-Yourselfers with home and business improvements. But with all the good Home Depot has done, they have their faults too. Home Depot has faced job cuts, ethical violations and the mistreatment of their customers. When a person hears job cuts, they assume that the reason for the job cuts is downsizing.
A stock price this low had some investors concerned that a hostile takeover of the retailer might become a possibility. The new CEO, Frank Blake, recognizing that the corporate culture would not sustain a profitable company, started to make changes within the organization after his hire in January of 2007. Nardelli had taken The Home Depot from 1,134 stores in 2000 to 2,000 stores in 2005, with a plan on opening another 400-500 additional stores from 2005 to 2010 (The Home Depot, 2005). Frank Blake recognized The Home Depot had become too stretched and needed to focus on rebuilding the customer service that once had made The Home Depot a strong contender among retail stores and the number one home improvement retailer. This caused Blake to stop the expansive store growth, close 15 underperforming stores, sell the newly acquired supply, and close the EXPO design centers.
This number illustrated an increase in their revenues from 2014, when the revenues were listed as being $78,812 million. According to the consolidated statement of earnings of this company stated that in 2015 their net income was six thousand three hundred and forty five million dollars $ 6,345million which was an increase of $960million from 2014. The Home Depot currently has 1.307 billion company shares outstanding as of February 1, 2015, which are all common stock.
Home Depot faced a wide range of competitors, both direct and indirect, in its pursuit of its market dominance. Among its direct competitors were well-established companies such as Lowe’s Companies Inc., Ace Hardware Company, Sherwin-Williams Company etc. Home Depot’s indirect competitors are local electrical and plumbing supply stores, independent hardware stores etc. Furthermore, the rise of e-commerce brought a new class of indirect competitors, including online retailers such as Amazon. Despite the intense competition, Home Depot maintained an edge over its closest rival, Lowe's, in the online space.
Lowe’s has the distinct recognition of being the world’s second largest home improvement company that was founded in 1952, operating 2,129 free standing stores, employing 190,000 full-time, and 100,000 part-time employees collectively in the U.S, Mexico and Canada. Last year, this impressive organization had a larger increase in sales of 10.1%, producing 65 billion in sales, as compared to the industry giant Home Depot who also increased sales by 6.9%, producing 94.6 billion in annual sales. Albeit, Lowe’s short-term liquidity current and quick ratio was very low as of February 2017, reflecting 1.0 and .1, with high long-term solvency debt/equity ratio of 244% (S & P, 2017). These, numbers are not alarming due to Lowe’s strategically
Last year, Home Depot gained 9.5% while Lowe’s added a comparable 9.1% growth in share price (Meadows, 2015). Creating a competitive advantage is key. Keeping costs down and margins up will enable the future growth and market stability The Home Depot needs. This year
Dollar Tree has actively grown both organically and through acquisitions. The strategy for growth has been based on an understanding of their industry and where they can best operate in that industry (Parnell, 2014). In 2015 Dollar Tree acquired Family Dollar which created the largest chain of discount retailers in the U.S. Operating close to 14,000 locations nationally the company’s strategy has been fairly straight forward. They strive to maintain a balance of products, variety, and value, through a minimal footprint.
Lowe’s customer base is homeowners, landscapers, painters, plumbers, electricians and professional contractors. Home improvement is a growing market and makes it competitive with low costs and high quality. The growth correlates with managers using past industry growth rates to forecast future sales and growth, by expanding into new cities and markets. Managers believe by cutting out middle man and buying direct from manufactures they can keep costs low, and they pass this on to their customer base. The two leading retailers offer similar items and services but what sets them apart is the inside appearance; Home Depot has orange and black scheme with tall shelves that only forklifts can access, gearing more toward professional customers, Lowe’s has a blue and white scheme, more elaborate floor displays, leaving the impression of a less intimidating experience for the home improvement customers (Home Depot vs Lowes, 2015).
It is known that Home Depot is the world's largest home improvement specialty retailer, with 2,263 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and
Article #1 The article I picked was “the Home Depot marketing strategy is paying off” which was posted in a business blog by Mandy at mod girl marketing http://www.modgirlmarketing.com/home-depots-marketing-strategy-paying/ , Mandy is an author and blogger at 8 ways in 8 days and also the founder of mod girl marketing. She is also a driven digital marketing consultant, has a newly released eBook that shows you eight proven ways to generate quality leads in 2015. The blog http://www.modgirlmarketing.com/home-depots-marketing-strategy-paying/ is about how The Home Depot is moving up ahead in their sales surpassing Lowes. Home depot’s store sales 5.8% beating their 4.5% estimate in sales while Lowes only saw a 4.4% increase.
Dollar General has performed well in the five years to fiscal 2016. The company’s low-priced products attracted many new customers to its stores when consumer sentiment fell. The company’s revenue is anticipated to grow at an average annual rate of 9.5%over the five years to fiscal 2016. In fiscal 2016, IBISWorld estimates that company revenue will increase 9.3% to $20.6 billion. The company’s focus on value-conscious customers drove much of its growth over the period; as unemployment soared, consumers sought new ways to save, including shopping at dollar stores for household necessities, particularly food.
Home Depot is the largest American retailer of home improvement products and services. Home Depot every year attempt to improve their services by making good operating strategy in which they try to provide a seamless shopping experience across multiple channels to their customers. Home Depot also tries to provide good Customer Service by allowing their associates to focus on customers. At most, Home Depot provides necessary things to customers in their time of need. And, most of all Home Depot provides the best shopping experience to its customers.
Through culture change, Home Depot was able to execute some required training. When senior executives Nardelli and Donavon took over he knew there was a lot of opposition in the organization towards the proposed changes he wanted to implement. The company was being hammered by the media/market because of low shares. They went from $70 in the late 1990s to $20 in the early 2000s, plus failing to increase same-store sales. Even though the company did an effective job explaining what change is necessary, they were not as successful explaining why.
In 1978, Home Depot opened their first two stores in Atlanta, GA. Their “vision was a one-stop shopping for the do-it-yourselfer” (About, n.d.). As a result, Home Depot become an instant success, which allowed them to expanded their business to other parts of the country. According to Parnell, “Home Depot were so successful because they focused on the needs of the DIY market, specializing in building materials and lawn and garden equipment” (2014, pg. 378). Another key factor, is that when Home Depot first started the company, their main focus was Everyday Low Prices, which was a cost leadership strategy according to Porter’s Model (Smithson, 2016).
The current position I am most familiar with is my previous Job at Home Depot Contact Center which is a call center where you place appliance and products orders, track order, talk to the employees and managers at the Home Depot stores and the warehouse about issues that customer may have with their products. The three factors I choose what I believe is and contribute to employees leaving the organization. One factor was a lack of opportunity for advancement or growth Home Depot hire a mostly outside the organization leaving little room to advance also a lot of politics within the company. It is more of who you know then what you know a supervisor said I needed to get to know people within the organization so I can advance I pose the question