Home Depot's Internal Growth Strategies

More savings. More doing. Now that’s the power of Home Depot (homedepot.com). “ The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank, along with investment banker Ken Langone and merchandising guru Pat Farrah” (corporate.homedepot.com). The founders envisioned a “one-stop shop” for the do-it-yourselfer. The first Home Depot opened June 22,1979 in Atlanta, Georgia. The first stores had around 60,000 square feet that dwarfed the competition stocking over 25,000 SKUs much more than any other hardware store at the time (corporate.homedepot.com). As a facade to look like there was an abundance of merchandise The Home Depot would stack empty boxes on the shelves. Home Depot has come a long way since their humble beginnings.

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

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’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.

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.

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 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 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.

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

In 2003 Home Depot implemented a plan to remodel and refurbish all out dated stores including in-store checkout terminals, customer service call boxes, a 24-hour customer service hotline and more. After these projects were completed, Home Depot implemented new ventures that would attract new customers such as the Design Center in North Carolina that focused on women shoppers with high end merchandise design and decor. They also added a 6000 square foot Smart Home, designed to showcase new innovative products that doubled as housing for 10 engineering students that does research for Home Depot. By 2010 Home Depot had a total of 2,245 operating stores. Because of operational differences Home Depot was forced to close all its stores in China,

Home Depot started doing business in Canada with its acquisition of Aikenhead’s home improvement center and in Mexico through the acquisition of Total HOME. In 2006, they extended their reach to China by acquiring The Home Way. Today, Home Depot is the world’s largest home improvement retailer. They have more than 2,200 locations, and store inventory consists of up to 40,000 kinds of building materials, home improvement supplies, appliances and lawn and garden products. In addition, they offer 250,000 other products that can be special ordered.

Home Depot’s strategic framework focuses on creating value for their customers by connecting the business end-to-end. Under this framework, Home Depot is centered on Customer Experience, Product Authority, and Productivity (Home Depot, 2016). Thus, they have established a targeted customer base and will focus on ensuring customer service continues to evolve to mirror the changing needs and expectations of their customers (Home Depot, 2016). Ultimately, there is a fine balance between delivering an innovative product that is of premium quality at a good value, but this is their goal under product authority. Last, productivity is impacted due to their coordination with their supply chains and the stores (Home Depot, 2016).

Ghosh (2015) reports that Credit Union National Association (CUNA) is seeking at least one credit union from all 50 states to join suit again Home Depot over an estimated $ 60 million dollars in costs that credit unions incurred due to a credit and debit card breach where at Home Depot admitted to at least 56 million cards being compromised. Yet, facing legalities and having had the scrutiny of allowing the breach and not reporting it timely, Home Depot does have some brighter plans for the future. In July 2015, Home Depot announced plans to purchase Interline, which is a national distributor and markets maintenance, repair and operations products directly with 90 locations in North America (Home Depot, 2015). The acquisition is expected

As pioneers in the industry, Home Depot is granted the advantage of monetary assets and strong supplier relationships that can be used to improve product selection and customer satisfaction. 2. International Expansion Through Acquisitions Home Depot is a reputable brand that conquers the home

When The Home Depot was founded in 1978, Bernie Marcus and Arthur Blank had no idea how revolutionary this new ?hardware store? would be for home improvement and the retail industry. The Home Depot sells from building materials to furniture, everting about your home improvement. Today, the Home Depot is the world 's largest home improvement specialty retailer, with 2,274 retail stores in the United States, Puerto Rico, the territories of the U.S. Virgin Islands and Guam, Canada and Mexico. 1,977 stores of them in the U.S. about 385,000 Employees around the world. As of the end of the first quarter of 2016, The Home Depot about 298 international operations represent 13.1 percent of store base. The Company has been already the largest home improvement retailer in Mexico, in addition to the U.S. The Home Depot entered Canada in 1994 and Mexico in 2001 through a combination of acquisitions and organic growth. Both markets are examples of how The Home Depot combines its vast knowledge of the home improvement industry with the needs, shopping trends and customs of each unique geography to best serve customers.