Home Depot Case Analysis

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 (Ticker: HD) is the world’s largest home-improvement retailer along with being an American Fortune 50 company. The company operates 2,259 retail building supply/home improvement “warehouse” type stores all across the United States, Canada and Mexico. The Home Depot has over 340,000 team members and is based in Atlanta, Georgia. The average store size is just over 100,000 square feet along with an additional 24,000 square feet set aside for seasonal gardening.

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

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.

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 is also known for its high productivity. The company likes to maximize the efficiency of the space it uses. International Home Depot stores in 2014 averaged $297 earned per square foot. Lowe’s international stores only averaged $280 per square foot (Trefis Team, 2015). The growth of Home Depot’s e-commerce sales is another testament for its productivity. Home Depot’s had online sales of 500 million in 2009. E-commerce sales have grown to over 5 billion (Birkner, 2017). In 2007, the company’s store were in charge of stocking and replenishing inventory. The staff spent as much as 60% of their time working with inventory instead of working with customers. To solve this problem the company created algorithms that autonomously kept track of the inventory for the management (Bond, 2017). The company also created 18 rapid deployment centers from 2007 to 2015. These centers move products between stores in a more efficient rate utilizing a for just-in-time replenishment model. Lowes also has rapid deployment centers, but has only built 15 in the same amount of time. The high productivity of Home Depot is one of the reasons it continues to outperform its competition.

The home improvement sector of the economy is large with two major players in the industry and with many smaller local and regional competitors. These two major competitors are Home Depot and Lowe’s. These two companies account for over $110 billion in total sales each year. Even though sales have gone down over the past few years due to the downturn in the economy they have not gone down nearly as much as home sales and this is due to more people deciding to do more home improvements to their own home then buying a new home. Both of these companies have been able to keep up sales and increase them year over year by improving current

Robert L. Nardelli was born in May, 17 1948 and earned Masters in Business Administration from University of Louisville. Nardelli started his professional carrier in GE where he worked for 27 years. He took the job as CEO of Home Depot from his predecessor Bernie Marcus in the year 2000. Employees had laid back approach and independence under

Organizational overviewBeginning in 1978, The Home Depot was founded by Bernie Marcus and Arthur Blank. , the founders' vision of one-stop shopping for the do-it-yourselfer came to fruition with the help of investment banker Ken Langone and merchandising guru Pat Farrah. The first two Home Depot stores opened on June 22,

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.

Lowe’s serve DIY customers and also provides installation services and other services such as electricians, painters, plumbers and landscapers. Average Lowe’s has two kinds of stores, a 117,000 square-foot and the other one is a 94,000 square –foot. This remodeling of the stores layout was done in 1980s, after the arrival and success of the biggest rival “Home Depot”. A typical Lowe’s store carries approximately 40,000 items. These items include other brands too such as allen + roth, Kobalt and Utilitech. Lowe’s product line includes products for home decoration, house maintenance, repairing, remodeling & redesigning, and constructing a new house or office. Items that may not be available in the stores are still available to customers by placing special orders. The installation services of Lowe’s are available for more than 40 product categories. Installation services contribute to the net sale too with the greatest sales coming in flooring, millwork, and

Lowe’s Companies, Inc. is averaging the opening of about two stores per week. This is part of

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 '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