Home Depot Strengths And Weaknesses

Home Depot is a leader in the home improvement retailer industry. While many companies are falling behind Amazon and Walmart, Home Depot continues to beat its earnings estimates and attract investors. This part of the report will analyze the core competencies, strengths, and weaknesses of Home Depot to give insight into its recent successes and interpret possible downfalls.

Lastly, in the highly competitive market in the United States today, Lowe’s faces a number of various threats. Obviously the main threat to Lowe’s is the competition from other home improvement retailers, with Home Depot posing the biggest threat. Technological advancement, while having the ability to better a retailer, can also pose a threat because other companies may know how to utilize technology in a more efficient way in order to promote their businesses. Government regulations and taxes also serve as a threat to the retailer. For example, products carried by Lowe’s must pass various types of tests before being put out on the market for consumers to purchase. Such regulations costs the company

Home Depot has clearly set itself up to be successful in the recent upswing in the housing markets. Their technology upgrade has proven to be successful in keeping stores stocked and employees more engaged with helping the customers.

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

Retailing building supply stores have become a popular retail industry sector due to increased public awareness and the need of many homeowners for the home improvement products. Back in the 1970s, long before warehouse stores ruled home improvement land, do-it-yourselfers shopped at “home centers.” These 30,000 square foot stores offered cheaper prices and wider selection of products, about 25,000 more than local hardware stores and eliminated the extra trip to the lumberyard. The dependence of many of these retailers upon the homebuilding industry for much of their business has also been reduced and the warehouse superstores, such as Home Depot, have become more important. The smaller companies in the

Interestingly, both also have special pricing and strategies designed for contractors. Both Lowe’s and Home Depot sell products in store, online shipping to a consumer’s home or business, and online shipping to the retail location of the customer’s choice. However, Home Depot has invested heavily into data driven and technologically improved supply chain management (Petro, 2016). This allows Home Depot to lower cost long-term, as well as improve on having the needed product to the customer as quickly and easily as possible. It does not appear that Lowe’s has used a financial strategy that has invested as heavily in this ability. The size and experience of Lowe’s and Home Depot lead to lower production costs for the retail services they provide, and both are similar in nature. However, the significant supply chain management investment by Home Depot may benefit Home Depot in production cost long term. Parnell (2014) states that HR programs are often tied to the business strategy. For Lowe’s and Home Depot, which are both utilizing a low-cost strategy, this appears to translate into low wages and low benefits for the majority of their associates. Difficulty in retaining valuable employees may result from these practices, and this will likely affect both companies’ ability to develop employees and leverage their human capital in the future

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's company stated vision is described in the case as "to be one of the most successful retailers in the next millennium" which is further defined by Home Depot's management as "the most successful retailers... will be those, among other things, can effectively profitability extend their reach to global markets". ("The Home Depot", 2004) Management at Home Depot also states that they plan to take the existing success in areas where they have a base business and use this base to expand into other markets.

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

In the early 2000’s Lowe’s was rapidly intensifying its presence nationwide. The company carried a varied assortment of home improvement products and catered to the needs of retail as well as commercial business customers. Lowe’s expanded their reach by acquiring a 41-store chain, Eagle Hardware and Garden, and engaging in a strategic alliance with HGTV to obtain a more profound existence in their market (Rouse, 2005). By 2004, Lowe’s operated almost 1,000 stores with plans to continue expansion across the nation (Rouse, 2005). The company has a core competency in helping customers meet their home improvement needs at a low price. In order to use this core competency to gain a competitive advantage, the company has focused on key

Thirdly, redefining the market Home Depot is now synonymous with home-improvement, it is done so through great customer service, knowledgeable

The first company that will be analyzed is Home Depot. Home Depot's total assets increased to $40,518 million from $40,125, an increase of 0.9%. These figures, however, are lower than the value of total assets on the books for HD for the prior three years. The 2008 fiscal year was the point where Home Depot had the highest asset levels at $44.324 billion. The recession has been the biggest culprit for the decline in the size of Home Depot. All of the firms in the building supplies industry have a strong relationship between their sales and the strength of the housing market, as home purchases are a major impetus for home renovation projects. Home Depot's size declined with the onset of slowness in the housing market, and it is expected that its size will not begin to increase until the housing market recovers. Home Depot management has noted that there are signs of life in the US housing market, and that this should be taken as an encouraging sign for the company (Isidore, 2012). Indeed, the company's balance sheet has grown in size throughout the 2013 fiscal year, so that the latest Q3 total

Founded in 1978 by Arthur Banks and Bernie Marcus, who were both fired from a local hardware store after a disagreement with their supervisor (http://founderbios.com/bernie-marcus.php), Home Depot opened its first store in Atlanta, Georgia on June 22, 1979 (www.corporate.homedepot.com). The founders had a vision to create a big-box retail chain that empowered customers to take on their own home improvement and repair projects. As the fourth largest retailer in the U.S. and the world’s largest home improvement retailer

The strengths of the Lowe’s Company include: established presence and efficient merchandising, strong logistics and distribution system, and focus on seamless multi-channel experience. Right now Lowe’s is the second largest home improvement retailer in the world and are currently number fifty-four on the Fortune 500 list. They are also number thirteen in the top fifty US retail brands list. They cater to numerous customer types through their stores and have a proficient marketing plan that they use to increase their customer base. As of this past February, Lowe’s has operated 1,745 stores with only thirty-one in Canada and two in Mexico. Each of the different stores make up specific sections to effectively target the different needs the

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