The Home Depot

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.

Due to the nature of its business, the company looks for technological risks generated by one or more of the following factors:

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.

impact of the identified risks to the organization based on key business drivers (loss of life, loss of

Established as the older company of the two, Lowe’s ranks forty-second as a Fortune 500 company. Established in 1946 as a small hardware business, Lowe’s has grown into a 40,000 product, global market enterprise that consist of 1,710 stores nationwide expanding into the countries of Canada, Mexico and Australia (Lowe's Internal, 2010) Home Depot, founded in 1978, is the fastest growing retailer in the United States. Ranked twenty-ninth as a Fortune 500 company, Home Depot continues to remain the number one do-it-yourself retail store in America. These two companies may sell products of the same nature, but comparing their Code of Ethics is their way of setting themselves apart. (Home Depot Internal, 2009)

Business risk evaluation – possible and moderate = medium business risk. The threat of new entrants and substitute products are very high, in addition to the high level of competition in the industry. Therefore, the business risk that MTI faces – losing customers due to lack of product differentiation, profit decrease due to increase in competition in the industry are likely possible to occur. In addition, the effects from new companies entering the industry will have a moderate effect on MTI’s revenue stream. As a conclusion, MTI faces medium business risk.

I believe that Home Depot has done an excellent job at reaching its goals in the past ten years. They have been able to expand their market by aggressively opening several store locations and using a clustering strategy. In doing this they have become a market leader and they have also been able to keep their SG&A expenses down by eliminating redundant expenses by spreading them out between stores close in proximity to each other. Home Depot is facing a few problems in order to continue reaching its stated goal(s) of becoming a global leader and expanding their existing market. There are a few established business that are in direct competition with Home Depot such as Lowe's, their number one competitor, and other companies such as Eagle Hardware & Garden of Seattle, who has been preparing for the intense competition

At the end all the risk are finance related, because the liability’s cost money and this will have an effect in the company’s earnings, so what is important is not only to try to avoid such events but also to be prepare in case they happen and have a plan, is like the saying “Hope for the best but be prepare for the worst”.

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.

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

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

The Home Depot Inc. was founded in 1978 and is the world’s largest home improvement retailer and the second largest retailer in the United States. The sales for the fiscal year 2000 were $45.7 billion, compared to $38.4 billion in fiscal 1999. As of January 2001, the company was operating 1,134 retail stores in forty-seven states, six Canadian provinces, Puerto Rico, Chile and Argentina.

Home Depot (TheHomeDepot, n.d.) began as a two store operation in Atlanta, GA in 1979. The concept was the brainchild of Bernie Marcus and Arthur Blank, with inspiration from investment banker Ken Langone and well know merchandising expert Pat Farrah. They envisioned a one stop, do it yourself store that carried most of the products needed to do common home care projects.

Generally speaking, Hampton lists three components of Enterprise Risk: Business Risk, Financial Risk, and Hazard Risk. Business Risks are those that could prevent an organization from establishing and maintaining a sustained competitive advantage. Failure to update products or services, obsolescence cause by progression of technology, a change in consumer preferences, and weakening of the market for a product or service all fall under Business Risk (Hampton, 2009, p. 5). Financial Risk is the possibility funds will be inadequate for continued operations. Inadequate initial capitalization, changes in A/R or A/P, excessive debt relative to assets, high interest rates, and liquidity issues caused by financial structure are all facets of Financial Risk (Hampton, 2009, p. 6). Hazard Risk is the least predictable and the most sever; by definition it produces loss without the possibility of gain. Hazards may include such things as fire damage to facilities, physical injury to employees or customers, or frivolous lawsuits. While most businesses insure for the physical damage, there is no way to recoupe the time lost while production is at a standstill (Hampton, 2009, p. 7).