Transformation At Home Depot Case Study

1619 WordsApr 12, 20177 Pages
Page Break Transformation at Home Depot Case Study Introduction Home Depot is one of the few businesses that come to mind when thinking about home improvement and do it yourself projects. But, it is not necessarily the first one that comes to mind considering its competitors like Lowe 's, Ace Hardware, or True Value. In 1978 when Home Depot was founded by Bernie Marcus and Arthur Blank its growth seemed unstoppable. This is most evident by looking at financials of the organization, in 1981 stock options were opened to the public and by 1984 Home Depot was listed on the New York Stock Exchange (The Home Depot: Investor Relations). In 2000, cofounders Marcus and Blank retired and at this time the decision was made to bring in Bob…show more content…
Once Nardelli turned his attention to cutting costs the problems became apparent, especially when the workforce was drastically changed as Nardelli made the decision to cut costs by eliminating higher paid employees and replacing them with "less experienced and cheaper employees" (Brown, 2011). Members of the organization began to lose the sense of ownership that created the unique culture of Home Depot. As a result customer service and satisfaction began to decline since there were no longer "experts" to give tips and technical explanations to the Do-It-Yourself (DIY) customer base. Managers were no longer given free reign to manage the store as they felt was appropriate to the location, and instead now had "numbers" and "quotas" corporate expected them meet. Managers were no longer in control of ordering inventory which resulted in many stores having product that was not being purchased as it was ill-suited to consumer demand. According to Brown (2011) in 2007 Bob Nardelli refused to take a pay cut and left Home Depot to move on to Cerberus Capital Management (which he later left in 2009 after they filed Chapter 11 Bankruptcy protection). In 2014, Home Depot decided to promote from within and executive vice president Craig Menear became president and CEO (Home Depot: Investor Relations). Prior to 2014 Menear served as senior vice president of merchandising among other smaller roles in divisional areas. Of the different
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