Home Depot, The World 's Largest Home Improvement Chain

880 Words Sep 20th, 2015 4 Pages
Background
Home Depot is the world’s largest home improvement chain. The company was founded in 1978, and enjoyed successful growth decades after its first store opening. The company underwent a change in management; CEO, due to performance issues in 2000 with new metrics and business model that focused on profits and performance. This change was profitable but incongruous with the company’s culture of customer service. A later CEO with prior internal knowledge and experience would later bring the company to its glorious days again.
Issue #1: Panic (Abrupt Change in Leadership & Strategy)
Home Depot Inc. has enjoyed rapid growth since its opening in 1979 with focus on the customer service it provided to people through face-to-face personnel interactions. Entrepreneurial business model was the way business was done, and it encouraged autonomy and positive spirit. The company’s growth would be challenged by another competitor after 2 decades of success. This challenge, in addition to economic forces resulted in a steady decline in the company’s stock value. The response from the stockholders was to prepare the company for the future by adopting a business model that centralized merchandise and implemented standardization across all chains. Centralized merchandising was put in place by the newest CEO, Bob Nardelli to organize merchandise from a central point so that ordering and inventories can be managed efficiently.
My analysis on issue #1 is that the idea of centralization…

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