Competitor Analysis: Home Depot Essay

The Home Depot’s two main customers are at home “do-it-yourselfers” and contractors. The main products and services offered help solve the wants and needs of customers involved with home construction and maintenance,

The Home Depot mission statement reads as follows: “The Home Depot is in the home improvement business and our goal is to provide the highest level of service, the broadest selection of products and the most competitive prices. We are a values-driven company and our eight values include the following: excellent customer service, taking care of our people, giving back, doing the “right” things, creating shareholder value, respect for all people, entrepreneurial spirit, and building strong relationships.”

From its roots as a vision in 1978 of a home improvement superstore The Home Depot has become a giant in this sector. Influenced by the “do-it-yourself” customer or the corporate contractors each policy and business plan is developed with a consumer stake holder emphasis. As its founders stated “We’re in the people business” (Planning), and this is maintained in its business structure today. Set up as a direct to consumer warehouse of home improvement and building products

Lowe’s community involvement is in the spirit of their community mission statement “Being a good neighbor means being committed to improving the places our employees and customers call home. We see that as an investment in our future” (Lowe 's,

Established as the older company of the two, Lowe’s ranks forty-second as a Fortune 500 company. Established in 1946 as a small hardware business, Lowe’s has grown into a 40,000 product, global market enterprise that consist of 1,710 stores nationwide expanding into the countries of Canada, Mexico and Australia (Lowe's Internal, 2010) Home Depot, founded in 1978, is the fastest growing retailer in the United States. Ranked twenty-ninth as a Fortune 500 company, Home Depot continues to remain the number one do-it-yourself retail store in America. These two companies may sell products of the same nature, but comparing their Code of Ethics is their way of setting themselves apart. (Home Depot Internal, 2009)

Lowe’s also offers several development opportunities and resources through the company’s Generous Tuition Reimbursement Program, Certified CPE course offerings, Management Development programs through the Lowe’s Leadership Institute, and skill and competence development courses (“Learning and Developing”, n.d.). The Home Depot continues to give raises, bonuses, and develop and promote employees with good work ethics. Home Depot typically promotes from within the company.

Lowe’s is continuously being threatened by Home Depot in losing market shares. It is a constant battle; Lowe’s and Home Depot are expanding substantially in attempts to take over territory claimed by the other as well as unclaimed territory. The biggest weakness for Lowe’s is its lack of customer service. Customers are leaving Lowe’s in search of credible, knowledgeable service which is found at Home Depot.

Lowe’s is part of an oligopoly type market structure. An oligopoly is a situation in which a particular market is controlled by a small group of firms with at least two firms controlling the market. The main key to behavior in an oligopoly is that companies must take into account what other companies will do. In perfect competition, firms are price-takers and can ignore other firms (Basic Economics, 2009). The home improvement retail stores are an industry that includes Home Depot, Lowe’s, Builders Square, and in other states, Menards.  Smaller companies have to try to compete with them to stay in business.

Lowe’s Companies, Inc., is a $26.5 billion company that employs 122,000 people. It is the world’s second largest home improvement retailer and the 14th largest retailer in the United States as well as the 30th worldwide. Lowe’s owns 854 stores in 44 states and serves eight million do-it-yourself and commercial customers weekly. Headquartered in Wilkesboro, N.C., Lowe’s has been in business for 57 years and publicly held for 41 with stock listed on the New York Stock Exchange under the symbol LOW. The company offers products and services in home improvement, home décor, home maintenance, home repair and remodeling and lawn and garden.

The Home Depot (NYSE: HD) is a home improvement, construction products and services retailer operating over 2,000 big-box stores in the United States and abroad. The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank with the vision of one-stop shopping for do-it-yourself (DIY) customers, installation services for do-it-for-me (DIFM) customers and competitive products for the professional market. Their DIFM installation programs include products such as carpeting, flooring, cabinets, countertops, and water heaters. In addition, the company provides installation of various professional products like generators and HVAC systems.

Home Depot and Lowe's believe in big warehouse space, an informal atmosphere and low prices. They are able to offer the lower prices to consumers due to their purchasing power. Inventory differs depending on the story type, home centers typically sock more lumber and building supplies, as their biggest customers are contractors. They pay their floor employees minimum wage, and keep overall costs down by keeping them as part time employees.

Lowe’s Companies, Inc. is the fourteenth largest retailer in America, and overall the world’s second largest home improvement retailer. They are the 108th ranked corporation on the Fortune 500 top corporations list. With an impressive in store stock of 40,000 home improvement items on hand, ranging from lumber to Home décor items, plus an additional 400,000 home improvement items available through a special order program. Lowe’s provides a onetime stop for all home improvement needs, for both the Do-It-Yourselfer, and the ever-expanding market of the Commercial Business Customer.

Lowe 's is the world 's second largest home improvement retailer and the 14th largest retailer in the U.S. Lowe 's is in the midst of an aggressive expansion plan, opening a new store on average every three days. Lowe 's is an active supporter of the communities it serves. Through the Lowe 's Heroes volunteer programs and the Home Safety Council, it provides help to civic groups with public safety projects and share important home safety and fire prevention information with neighborhoods across the country. Lowe 's has been a publicly held company since October 10, 1961. Its stock is listed on the New York Stock Exchange, with shares trading under the ticker symbol LOW.Lowe’s Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States and Canada. The company provides a range of products and services for home decoration, maintenance, repair, remodeling, and property maintenance. It offers home improvement products in various categories, such as appliances, lumber, paint, flooring, building materials, millwork, lawn and landscape products, fashion plumbing, hardware, lighting, tools, seasonal living, rough plumbing, outdoor power equipment, cabinets and countertops, nursery, rough electrical, home environment, home organization, and windows and walls. The company’s products also include boards, panel products, irrigation pipes, vinyl sidings, and ladders. It serves

Home Depot was more concerned with expanding into new markets than it was about ensuring that they maintained their position as a low cost retailer. With Home Depot’s rapid expansion, they experienced the diseconomies of scale through decentralized purchasing, multiple suppliers for the same goods and difficulty managing the number of stores, all items that Nardelli addressed. When Nardelli took over, he shifted the strategy to integrated. He implemented methods to improve the process efficiency of Home Depot to keep them as a cost leader with investments into IT and logistics and the elimination of the cash return policy. He also moved to differentiate Home Depot by adding services such as tool rentals and professional contractor services, making the stores more appealing through layout changes and an emphasis on helping customers instead of restocking.

Home Depot’s current marketing strategy includes offering low prices, quality products and services, advertising, and integrating the firm’s online presence with the brick-and-mortar experience (Home Depot, n.d., para. 2). According to Home Depot strives to be competitive with its pricing and offers a price guarantee, stating that it will meet and beat a competitor’s price. Home Depot (n.d.) states that the firm also promises to offer quality products and services and an effortless customer experience (para. 2). Finally, Home Depot improves the shopping experience and drives sales by integrating its website and application with its brick-and-mortar stores.