ECO 561 Week 6 Final Business Proposal

Home Depot’s retail strategy is one of reasons for its fast growth and continued leadership in the home improvement retailer industry. Its focus on speed, efficiency, and quality has made it one of the largest retailers in the world. Home Depot focuses on being a leader in “product authority.” Walmart and Costco are leaders

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 growing trend of home improvement has perpetuated a larger demand for box store home improvement shops such as Home Depot and Lowe’s. There are several types of companies that contribute to the booming renovation industry. Home Depot and Lowe’s provide all the

Home Depot is the fastest growing retailer in the U.S. by some accounts. It has a fascinating history of innovation and entrepreneurship. The company had some difficulties in the mid-2000s that some attribute to cultural clashes. However, during this period the company was able to take full advantage of the housing boom. Yet when the bubble burst, Home Depot was forced to claim substantial losses. Despite these loses Home Depot has weathered the storm fairly well and is in prime position to take advantage of an economic recovery; if it ever comes.

While Lowes and Home Depot follow similar differentiation and low cost strategies, there are a few differences in marketing due to the fact that Lowes seems to be more targeted towards women with bright and colorful displays, wide aisles and product stacking that is lower and easier to reach (Clemons, 2012). While this is a calculated decision because women make 80% of home improvement decisions, it may distract from growth in the contractor business since the vast majority of home improvement professionals are men. The advantage shifts toward Home Depot since men also spend thirty five percent more than women on home improvement supplies therefore, attracting men may actually be more efficient in terms of return of investment (Goodfellow, 2013). The ability to quickly locate products and return to work is a tremendous advantage for contractors who would prefer to be on the job instead of leisurely strolling the aisles of a store while examining multitudes of options. This may be a major component of Home Depot’s rebound since they derive a larger percentage of their sales from professionals and the rebounding housing markets and rebuilding efforts from Hurricane Sandy have introduced significant cash flow into the industry (Cheng, 2013).

The Home Depot knows that they must stay on top of technology and management must be able to organize this function in a way that surpasses the competition, pleases the customers, and keep the employees satisfied.

Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank. These founders envisioned providing one-stop shopping for the “do-it-yourselfer,” and this vision became a reality after working with investment banker Ken Lagone and merchandising expert, Pat Farrah. The first two stores were opened on June 22, 1979, in Atlanta, GA. These first stores were approximately 60,000 square feet in size each, and stocked 25,000 products, which made the stores drastically larger than any competitor or hardware store at that time. In addition to offering more products than competitors, store associates were also expected to offer the best customer service in the industry. Associates at

In order to further strengthen its holdings on the home improvement market, Lowe’s Companies, Inc. has restructured the company’s vision to conform to meet the ever-changing needs of its customers. Lowe’s extensive research has led it to include a well lit sales floor, informative in-store displays, exclusive and proprietary brands, and an ingenious store layout just to name of the few changes. This new vision is not only centered on the store itself, Do-It-Yourselfers and Commercial Business Customers have many ways to satisfy their needs conveniently though stores nationwide by placing orders over the phone, fax, or from the improved Lowe’s web site.

The Home Depot is in the home improvement business and their goal is to provide the highest level of service, the broadest selection of products and most competitive prices. They are a value driven company that abide by their 8 core values which will be discussed later in the essay.

Home Depot’s business made this how-to series of videos so successful because it focused on customer’s needs. One of the reason for their success was the campaign “do it yourself home projects”. Customer want to see how to solve issue for example wood flooring. The fact that home depot gives the option for you to repair or to send employees to assist you. In addition, these videos walk you through the whole process step by step. Without being too complicated, allowing viewers to detect different solutions. Using products

Home Depot 's target market is individual homeowners/small contractors. Even though the traditional ideology is that cost leadership and product differentiation business strategies are mutually exclusive, Home Depot was successful at using a combination strategy. First, Home Depot optimized the cost leadership strategy by offering low and competitive prices to its customers by emphasizing higher sales volumes with lower margins, while instituting a high inventory turnover. Home Depot successfully offered a warehouse product strategy to the individual consumer for the first time. Previously, this type of price discounting was only available to professional contractors who earned product price

Home Depot stores sell a wide assortment of building materials, home improvement and garden products. Twenty-six EXPO Design Center stores sell products and services primarily for design and renovation projects. Additionally, the company operates four Villager’s Hardware test stores, which offer products for home enhancement

The “do-it-yourself” market continues to grow and closely matches the professional home-improvement market. DIY market growth is credited to an increased presence of products, the personal satisfaction experienced, and the cost savings customers realize. A percentage of the DIY market is the “buy-it-yourself” market. Consumers are buying the product and arranging for someone else to do the restoration and

Home Depot has closed all 12 stores that it purchased from Home Way in 2006. In May 2009 Home Depot suddenly closed its storefront in Qingdao, Shandong Province, a coastal city in East China. The official excuse for the closure was “renovation by the landlord.” The employees of the store were disappointed with the sudden closure and actually took control of the store for a short period of time (China Business Focus, 2009). On the surface, the quickly expanding home improvement market seems to create an “ideal” opening for Home Depot.

A wide variety of products are necessary to ensure that customers have everything that they will need to conduct the equally broad range of projects required when one owns a home. Home improvement warehouses make the majority of their money from people looking to finish projects on their own, but many local contractors buy large lots of goods from The Home Depot also. Because of the variety of jobs that people undertake, the company has to keep a large number of product types available. The departments within the store are broken down accordingly.