Home Depot, The World 's Largest Home Improvement Chain

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

Home Depot’s corporate-level strategy is one of internal growth. This conclusion was reached based on the increased focus that Home Depot has placed on growing its existing online and traditional retail operations. Between 2016 and 2018, Home Depot is expected to invest approximately four billion dollars into improvements in its online and physical retail locations in order to make both work more synergistically and grow sales (Petro, 2016). Home Depot hopes that these investments will continue to increase sales at both its physical and digital retail locations, thereby growing the company without adding significant numbers of physical locations.

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

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

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.

Lowe’s is the 14th largest retailer in the United States and is presently planning aggressive expansion, opening a new store on average every three days. Lowe's revenue growth is primarily a function of penetration of the market increase resulting from a burst of new locations instead of the same store sales. Although Lowe’s has grown tremendously, it remains half the size of Home Depot and has serious debt burden that increases its risk level drastically. Lowe’s is Home Depot’s largest competitor because both companies have the same products, services, and enormous warehouse formats. In this major retail market Lowe’s and Home Depot stores go toe

To analyze the home improvement warehouse store competitive environment, we use the Five Forces model to evaluate five crucial competitive aspects: selling rivalry, supplier resources, buyer power, outside industry substitutes, and the threat of new entrants to the marketplace.

However, in 1999, Lowe’s recorded very high sales growth alongside its expansion in preparation for the new millennium. From 1999 to 2001, Lowe’s began to assert itself as a worthy competitor for Home Depot, embodied in its significantly better margins and turnover ratios despite the recessionary economic environment. This improvement in ratios is indicative of positive change in the management of the

While I neither personally know nor got a chance to interview any Home Depot managers at local stores or corporate headquarters, Home Depot’s eroding market share is a clear indication that management is no longer well aligned with consumer’s perceptions, expectations and beliefs about The Home Depot brand. A May 4, 2008 article in the investor website SeekingAlpha.com entitled “Home Depot Slows Down: Still Losing Customers to Lowe’s” argues that for several years The Home Depot management invested heavily in new store openings (capital spending) at the expense of employee training, store upkeep and inventory. As a shopper I have experienced this classic compromise of quality for the benefit of top-line revenue growth. I witnessed the degradation of store caliber as my local Home Depot store became progressively dirtier and more

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

Home Depot is the world's largest home improvement retailer operating in 45 states, Canada, Chili and Puerto Rico. Home Depot stores aim to serve both do-it-yourselfers and professional contractors with home improvement superstores carrying between 40,000 and 50,000 different products. Home Depot has also been listed as one of Fortune's most admired specialty retailers for the past six years. In order for companies to succeed in the competitive current marketplace they must consider not only the bottom line and their investors but also their impacts on the community, their employees, and their customers. Home Depot was founded on the idea that treating employees well is an important responsibility. Home Depot believes employees that are

One of the differentiating factors of Home Depot was that it incorporated within its members a major aversion to any kind of beauracracy and hierarchy. It was a usual practice at the stores to ignore all kind of paperwork that was sent to them by the headquarters. They undervalued such directives to the extent that they would throw these papers in the waste basket or mark them with “BS” stamp and send it back to the headquarters. They believed that all this was a waste of time of the managers and they had more important things to address to at their stores, the most important of them being : satisfying the

Bob Nardelli, a longtime GE executive who nearly nabbed the CEO spot at the company, was brought in to run Home Depot in 2000. He was by all accounts an overpaid disaster in the role. Skills that were well-suited to GE’s culture — a place, under CEO Jack Welch, with an intense focus on performance, where people were routinely fired — didn’t fit at Home Depot, which had a more laid-back culture, as Michael Useem, a management professor at the Wharton School at the University of Pennsylvania, noted in a 2007 podcast.

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.