1. COMPANY BACKGROUND
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 stores sell a wide assortment of building materials, home improvement and garden products. Twenty-six EXPO Design Center stores sell products and services primarily for design and renovation projects. Additionally, the company operates four Villager’s Hardware test stores, which offer products for home enhancement and small projects. In mid-year, Home Depot also launched a Home Depot Floor Store, located in Plano, Texas.
Home Depot stores serve three primary customer groups: do-it-yourself (D-I-Y) customers, who are typically homeowners that purchase products and complete their own projects and installations; buy-it-yourself (B-I-Y) customers, who are typically homeowners that purchase materials themselves and hire third parties to complete the project and/or installation; and professional customers, who are professional repair re-modelers, general contractors and tradesmen.
The Company also offers products through two direct marketing subsidiaries: Maintenance Warehouse and National Blinds and Wallpaper. The Maintenance Warehouse subsidiary is one of the leading mail marketers of maintenance, repair and operations products serving primarily the multi-family housing and lodging facilities management market. The company’s National Blinds and Wallpaper subsidiary is a telephone mail order service for wallpaper and custom window treatments.
Executive Summary This report contains a marketing plan for a new and affordable repair shop in the San Antonio market. The new shop will be launched in the market and will tend to all types of customer’s needs, such as; tune-ups, engine diagnostic (free), oil change, engine cleaning, will be an exclusive high end smart watch. The gold and platinum watch with marble dial will be launched. The use ...
Home Depot stores average approximately 108,000 square feet of enclosed space, with an additional approximately 24,000 square feet in the outside garden area. The basic EXPO Design center is approximately 90,000 square feet. Newly acquired companies, Georgia Lighting Inc. and Apex Supply Company Inc., are each operated by Home Depot Inc. as a wholly owned subsidiary. Georgia Lighting, a leading specialty lighting designer, distributor and retailer, has six retail locations. Apex Supply Company is a wholesale supplier of plumbing, HVAC and other related professional products, with twenty-one locations in Georgia, Tennessee and South Carolina.
The co-founder of Home Depot Inc. retired as co-chairman on May 30, 2001. Arthur Blank, 58 years old, ran Home Depot since its inception in 1978 and was chief executive from May 1997 to December 2000. He will not seek re-election to the board. Co-founder Bernie Marcus, 71, the company’s other co-chairman, is expected to continue as chairman. Blank decided to retire sooner than he had planned, primarily because of what he called the successful transition of leadership to CEO Robert Nardelli, a former General Electric Co. executive and the first outsider at Home Depot’s helm. Nardelli, 52, replaced Blank as CEO on December 5, 2000.
When Blank was CEO, sales more than doubled to $45.7 billion last year from fiscal 1996, and the stock price almost quadrupled, helping to make Home Depot sixth on the Fortune magazine’s list of most Admired Companies in America. The magazine also ranked Home Depot as America’s Most Admired Specialty Retailer for eight consecutive years. Home Depot’s stock is traded on the New York Stock Exchange and is included in the Dow Jones Industrial Average and Standard & Poor’s 500 Index.
Home Depot Business Case Analysis Letter to CEOTo: Robert L. Nardelli, - President and CEO of Home Depot, Inc.Date: March, 04, 2004First of all, I would like to thank you for giving me the honor to analyze your well organized and developed company. In this memo, I am going to discuss the strategic factors facing Home Depot, the strategies that the company has been following for the past years, and ...
The executive officers direct the departmental, operational, merchandising, finance etc. functions, and they provide the support to all the members of staff to ensure that they follow the goals of the company and this will lead to profitability. The executive officers and directors are there to ensure that the company does not lose customers.
2. MAIN STRENGTHS
Home Depot has done many things since 1978 to lead to the success it is experiencing today. Some of these strengths will be highlighted in the following paragraphs.
1)A major strength of Home Depot is its ability to embrace change and be creative. Home Depot grew from one store in 1978, to 1,134 at the end of fiscal 2000. This was made possible by their diversified operations. Home depot has a very wide customer base in both the US and abroad. Basically, Home Depot has customers in both North and South America. Home Depot is able to be successful because they listen to their customers. Home Depot continuously analyses their operations, and based on customers’ requests and suggestions, they improve on them. Due to these strong qualities, Home Depot will be able to continue to increase the number of stores they operate, both locally and abroad. This store growth will be possible due to the extensive market research done by Home Depot’s management and staff. In addition, by having a large amount of stores, a specialty retailer can enjoy increased buying power that gives them clout in making demands on manufacturers, such as for volume discounts, co-operative advertising, and merchandise pricing and ticketing prior to shipment. These lower product costs can be passed on to the consumer in the form of lower prices. Home Depot is a case in point. With nearly $50 billion in home improvement sales, it is able to garner significant concessions from its vendors. Another way retailers seek to gain market share is by developing different store concepts that appeal to various demographic groups or income brackets, example, Home Depot has it’s upscale EXPO design centers.
2)Another strength of Home Depot is the optimism of both management and staff. Even though Home Depot is constantly changing their methods of operations and their products, they still maintain a high level of customer service. Home Depot also does not have a problem in changing its top management as they see fit, in order to keep up their success in the home improvement market. Home Depot therefore employs both management and staff from any industry, who they perceive, will add to the happiness of the customers and investors.
Home Depot was the biggest home improvement retailer which was set up in the late 1970s, to provide low price of home-improvement and construction products and services. It operates in different places in the world and follows excellent social responsibility activities in different areas. Home Depot applied new technology initiatives to satisfy the customer needs and improve its operation process. ...
3)Yet another strength of Home Depot is their ability to realize that customers are on a day-to-day lease, always with increasing needs and expectations. This means that Home Depot realizes that it is easy to gain customers, but it is just as easy (if not easier) to lose them. With this in mind, Home Depot recognizes the need to continue to listen to their customers, and constantly try to improve the level of service and products available in order to please them. Due to the increase in competition from other firms in the industry, Home Depot has implemented a program called Service Performance Improvement Program (SPI), which allows most of inventory handling to be done after the stores are closed. This makes it easier for customer service agents to make the customers’ shopping experience easier and more delightful. The SPI will be put in place in all Home Depot stores by the end of fiscal 2001.
4)Home Depot allows customers to buy products for their home at a deeper discount than from traditional hardware stores. This is a strength based on the fact that Home Depot has established a top position in the home improvement market, hence, consumers have a sense of brand loyalty towards Home Depot. They have a history of selling quality merchandise at low prices. This attribute has allowed Home Depot to have a strong history, continuous growth and innovation, strong balance sheet figures and unmatched resources. Based on the financial statements for the fiscal year 2000, Home depot was cash flow positive for the first time in history. This indicates that Home Depot is a net generator of cash, and not a net cash consumer.
Based on the strengths outlined above, Home Depot can still be expected to see positive growth. The young new CEO, Robert Nardelli, will be able to analyze Home Depot’s present success tactics and improve on them based on modern technology and the whole new globalization procedure.
... incomparable product and service combination of Home Depot and it is apparent that the company has a strong understanding of middle-class Americans as a customer ... are forced to enter the market through Home Depot stores. Customer education is a key consideration at Home Depot (Roush, 1999). This serves to protect the ...
3. MAIN WEAKNESSES
Home depot internally is at a stake of a major risk that could even get them bankrupt, if not handled carefully. This major weakness is the fact that Home Depot handles a lot of dangerous and hazardous equipment and materials. All employees and visiting customers are at a continuous risk of becoming harmed with any of these. Therefore, Home Depot is subject to many restrictions and laws needed to be adapt at all their location and at all of their equipment. If they don’t follow properly these regulations they could be easily sue or banned. The Occupational Safety and Health Act of 1970, and the Consumer Product Safety Act of 1972, play a major role in this matter. The cost of their insurances and liabilities are extremely high, and any accident can make it even higher.
Another weakness confronted by Home Depot will have to deal with their suppliers. Many of their merchandise is labeled and packed by them. Home Depot however, has some products distributed by other intermediaries. Any disagreement with any of these suppliers could cost them on an increase of their prices, or in the termination of their supply. On the other hand, Home Depot plays such an important role in the market and has such a big market share for hardware and machinery retailing, that in this cases the suppliers are at a more risk of loosing a big costumer, than Home Depot loosing a supplier. However the risk of any of these companies becoming bankrupt is another possibility, but there why the reason why they had been slowly acquiring subsidiaries, and/ or joining other companies too.
4. MAIN OPPORTUNITIES
Even tough, Home Depot entered the e-commerce business later than their competitors, it yet shows how they keep up with the latest trends. Home Depot began offering its products online, only until 5 months after Lowe’s did. However their entrance was strong. Although Home Depot launched only until April of 2001, while Lowe’s was on it since November 2000, Home Depot was able to surpass Lowe by 6,000 products sold in one month. While Lowe’s products sold online reached only up to 14,000, Home Depot was able to sell 20,000. Other data show also that Home Depot 156,000 more visitors to their website than Lowe’s, again confirming to us the great effort and success at building brand loyalty and goodwill. Customers are loyal to this aspects, and the numbers showed before confirm it. Also, the vast amount of distribution centers (over 1,000 in 5 different countries) allows them to have an advantage of delivery on time and cost. While Lowe’s has to increase their delivery costs as distance increases.
... in company history and customer service techniques then all employees including managers must undergo an hour of training each week. New Products Canadian Home Depot stores ... Allstate Insurance Company and The Home Depot have formed a unique alliance to make home insurance repairs available to Allstate customers with materials from Home Depot stores. Home Depot Home Improvement ...
The growth expected by Home Depot is backed up by their constant expansion. For the fiscal year of 2001 they plan to open 200 new stores. With 23 years in the business it is not hard for them to open this new locations. They have been doing it for a while, so they should have an already established procedure to do it. This advantage facilitates and minimizes the costs of opening new branches.
With the increasing numbers of new housing units under construction, and the increasing amount of money spent on cost of materials used for construction in the U.S., Home Depot has a great opportunity for growth of sales on future years. As per the Census Bureau there is an overall increase in the number of permits issued for construction, this means more constructions being started. In 1997 the number of permits issued was 111.100 thousands of units, while in 2000 it was 131.700 thousand. The cost of materials used for construction starts waves around the 18 billions of dollars. And the total expenditures for maintenance, repair and improvements estimates are around 616.100 millions. Also Home Depot only has 10% market share of home improvement and building materials industry sales at the time. This figures gives a prospective of the great opportunity that Home Depot has for even greater expansion.
5. MAIN THREATS
Home Depot confronts two main threats, both from the external environment of the organization: one is about environmental issues, and the other about its direct competitor. As we already described before, Home Depot stores sell a wide assortment of building materials, home improvement, lawn and garden products and provide a number of services. Precisely some of those same products represent the threat. In North America there is a large percentage of homes and other constructions that utilizes building materials made out of wood. The wood coming from the old growth forests are in danger as a result of Home Depot using that resource and being the world’s largest retailer of old growth lumber.
Many activists and shareholders had pressured to stop the sale of wood products from “endangered areas” by the end of 2002, but the company did not formally release its new timber purchasing policy until eight months after its initial announcement with the publication of its 1999 Social Responsibility Report in April 2000. The report can be found on the Home Depot web site. The company’s timber purchasing policy has five elements:
In this case analyses we have a good example of different kinds of leadership and how leaders can change their organization's preferences. This report gives a detailed example about two CEOs for Home Depot; Bob Nardelli and Frank Black. The previous Leaders for Home Depot before these two CEOs did very well by challenging the market and exploring the customer needs and the way of grabbing the ...
•Give preference to the sale of timber certified as well managed by the Forest Stewardship Council (FSC) wherever possible.
•Eliminate timber contracts from endangered forest areas by 2002.
•Find and promote ways to use wood more efficiently.
•Promote and support alternatives to wood products.
•Ensure that timber suppliers are in compliance with existing laws and regulations.
So until Home Depot doesn’t comply with these environmental policies, this will remain as a threat to the organization.
Regarding to the second threat is caused by their direct and strong rival “Lowe’s” Lowe’s Companies Inc. is a retailer of home improvement products, with a specific emphasis on retail do-it-yourself (DIY) and commercial business customers. Lowe’s specializes in offering products and services for home improvement, home decor, home maintenance, home repair and remodeling and maintenance of commercial buildings. As of February 2, 2001, Lowe’s operated 650 stores in 40 states. So as this company continues to grow bigger and bigger they become a significant threat to HD’s market share, positioning and further revenues in the long term.
6. CURRENT STRATEGIES
The most current strategies Home Depot has implemented are: acquisitions of new product lines related to home improvement to broaden their product offerings; the implementation of the new technologies and software to enhance the e-commerce to increase on-line sales; and the opening of new stores nationally and worldwide in order to expand their markets.
HD acquired a plumbing product distributor “Other” Warehouse, plans to acquire Mexico’s Total HOME, a four-store chain of home improvements and launched the Lynette Jennings Collection, a proprietary of home décor products, that will be introduced to North American stores. To complement the national brand name of the products it offers, the Company has formed strategic alliances with vendor partners to market products under brand names that are only offered through The Home Depot. The Company offers products under more than 30 proprietary and other exclusive brands, including Thomasville kitchen and bathroom cabinets; RIDGID power tools; Behr Premium Plus paint; Mill’s Pride cabinets; GE SmartWater water heaters, and Vigoro fertilizer.
Home Depot has expanded its new online sales program to all costumers living in the US. The Company’s Website offers information about projects and its products, calculations to estimate the amount and kinds of materials needed to complete a project and information about Home Depot. Last year, Home Depot began selling products over the Internet in three markets. The Company offers customers the products available at stores in their local market on its Website, and the products are priced based on the market in which the customer lives. Orders are fulfilled from its stores, and customers can either pick up their purchases or have them delivered. This year HD has begun to offer products that can be shipped by United Parcel Service for sale through the Internet in additional areas of the United States. Also plans to upload a catalog of approximately 20.000 products offered in Washington, Oregon, Idaho, Montana and Arizona.
Also HD will “realign its current merchandising structure to gain merchandising efficiencies with vendors while improving neighborhood product assortment, pricing, and service across all stores”.
Another current strategy is the new store openings to expand both national and international markets, placing the stores at strategic areas expecting to operate approximately 2300 stores in the Americas by year 2004. ‘HD currently operates in 48 states in USA, as well as in seven Canadian provinces. In 1998 they opened stores in Chile and Puerto Rico, and opened the first Argentinean store in August 2000”(8)
7. MAIN ISSUES
Home Depot is the largest do it yourself warehouse in the US today. It has over 1200 stores throughout the world. Home Depot is well known for its orange logo and catchy phrases about people doing things by themselves pertaining to home improvement.
Home Depot is an organization dedicating to serving its customers, its community and helping the environment. The main issues Home Depot faces, as an organization is: Environmental Issues, Expansion, Online, and Competition from other hardware stores. Home Depot has always been critical of the environment and has worked hard in creating programs that will help improve our environment. Home Depot has created many programs to improve its internal and external environment. Expansion is the most important issue for Home Depot; it has expanded its operation globally now. Home Depot has also recently launched its new website which is very user friendly.
Internally Home Depot has always stressed on making a better work environment for its employees. It has many programs for its employees, such as healthcare, retirement plans, and vacation plans. Those are plans that almost all organizations can provide but Home Depot went beyond these plans for its employees. Some of the plans Home Depot has for its employees are: Employee Safety initiatives in 2000 included increase use in equipment that helps safety measures throughout each of the stores. To promote health Home Depot has a representative from ‘Building a Better Health’ in every store. ‘Building a better Health’, is program that promotes healthy lifestyles through organized wellness activities. Some of the activities of this program is to have the employees walk the around the store, stretch, and perform various light exercises before their shift starts. In 1992 Home Depot and its associates worked with customers to help rebuild South Florida after Hurricane Andrew.
Externally Home Depot has been just as active in its policy. It has always strived to be very environment friendly. Home Depot has donated millions of dollars and help created many programs to help preserve the environment. On of the most recent programs was Policy for the wood it purchases. This policy certifies the wood that it purchases; this program is responsible forest management. This program has helped to sustain our forest and wood supply. Home Depot has also launched programs to help build houses for the homeless. In 1994 the first Green (environmental) Habitat for Humanity House was built. In 1996 the 100th Habitat for Humanity house was built in Atlanta.
Expansion is a very important issue for Home Depot, it started out with only 1 store in 1978, and has over 1200 stores worldwide today. Home Depot has always tried to provide the customer with as much variety of products as possible, from finding a small screw to building a whole house, a customer will have ease in their project. Home Depot even offers classes to its customers to show them how to do projects on their own. The main issue for Home Depot is Expansion it has even expanded its operations abroad. It has facilities in Santiago Chile, Argentina, Quebec and Puerto Rico. Not only opening stores in other countries but also expanding to some specialties. In Home Depot one of its largest sections is the Bedroom, Bath, patio and window sections. To expand on this it has created a store called EXPO DESIGN CENTER. This store has many showrooms that will help customers make the home of their dreams. Home Depot acquired Georgia Lighting; this is a wholly owned subsidiary, which specializes in lighting fixtures, and accessories, accents, and supplies. Villager’s Hardware is also a Home Depot project that has items for small home enhancements such as: closet organizers, cutting centers, house wares, and small gifts. It has also teamed up with Joe Gibbs NASCAR racing. In 1999 Home Depot launched Home Depot University in its stores to help its consumers do their own projects. It also acquired Apex Supply Company, a wholesale plumbing distributor. Expansion is very important to Home Depot everyday the organization is finding new ways to expand to serve their consumers.
In 1999 Home depot launched its website to help consumers view items before they even step inside of a Home Depot store. Home Depot’s website is designed for two purposes, First to utilize the Internet for online sales. Second to provide the consumer user-friendly site that will help answer many of the questions they have on home improvement. Home Depot’s website has information on all its products, all of its locations, corporate information, and credit and loan information. In fact one can even apply for a credit card and be able to purchase with that account online. Making it very easy for consumers. They also have delivery information where one can track the order they had placed.
Home Depot has many competitors, but none that are able to imitate the services that Home Depot provides. Builder Square was one of the main competitors of Home Depot, but because of the variety and the Super Size stores Home Depot has, Builder Square had to cut down on its stores because it was very difficult for it to compete with Home Depot. There are small specialty store that compete with Home Depot, and to stay competitive Home Depot has competitive prices, and offers extra services such as free delivery, Online sales, instructional classes, and a very large variety.
Home Depot’s main priority is its dedicated service to its consumers. For Home depot to provide that unparallel service to its consumers Home Depot has many strategies. The most important strategy is to provide its consumer with a service that no other competitor can offer, and that is related to expansion. With expansion whether it is through the Internet, facilities in other countries, or even environmental services, Home Depot is able to better serve its consumers. Every consumer wish is to find everything they are looking for with the least amount of work. With its strategies on expansion Home Depot is able to provide virtually everything that a consumer may need for their Do-it-yourself project.
ANALYSIS # 2
Environmental Issues (Internal and External)
As stated is Analysis #1, one of the main issues faced by Home Depot is the environment – both internal and external.
Internally, Home Depot needs to constantly upgrade its employee benefit plans. It is just as important to keep the employees happy, as it is to keep the customers happy. Listed below are a few strategies that Home Depot could adapt, in order to improve their internal environment.
1)Offer child care facilities, even for the 24-hour stores. With this is place, the employees that work on the late shifts would not have to worry about the well being of their children.
2)Have weekly meetings at which employees are able to vent their grouses and give their opinions. These meetings will boost employee morale, and motivate them to work harder.
3)Offer more incentive programs to reward hard work. These programs could come in the form of commissions.
4)Implement more social gatherings for the employees, along with management. These gatherings will allow employees at all levels to interact in an environment outside of the workplace, which will lead to better employee relations.
The first internal strategy that Home Depot needs to implement is weekly meetings. This is so because if employees are not happy for whatever reason, they will not perform to the best of their ability. When this occurs, the company will lose business. After reading employee complaints, it was realized that the employees at Home Depot were not given the opportunity to freely give their opinions. Therefore, frequent meetings with management are needed for employees to feel needed as a part of the organization.
The strategy of weekly meetings can be implemented at the end of each shift. Employees should be required to stay for a short time after one of their shifts during the week. At these short meetings, management could provide snacks for the employees and create a relaxed environment. These meetings should begin to take place before the Christmas shopping season, so that the employees will be able to give their all during this important retail season.
The feedback from these meetings is expected to be extremely positive, since they will give employees a chance to belong. If this strategy is not successful, then Home Depot will need to find a different method to use in order to involve its employees.
Externally, Home Depot faces many more challenges with the environment. Below are some strategies that can be adopted to solve this issue.
1)Have more information sessions with the members of their community. At these sessions, Home depot will inform its potential customers about their environment friendly procedures.
2)Stick to the plans of phasing out the use of wood from endangered forests by 2002. Home Depot needs to find other locations to get their wood from in order to save the environment in these endangered forests.
3)Build some Habitat for Humanity houses in the Developing countries in which it is expanding to. By doing this, Home Depot will be giving back to the environments from which they get some its lumber (e.g. Chile).
The strategy that Home depot needs to implement first is #2 above – the phasing out of wood from endangered forests by 2002. This is so because since people today are very environment conscious, the endangered forests are important. Home Depot made an announcement that it would stop using wood from these forests by 2002. This announcement needs to be upheld if Home Depot plans to keep its present customers, as well as gain new ones.
To implement this strategy, Home Depot needs to get wood from regular forests around the world. As they cut down the trees for lumber, new trees need to be replanted to replace the down trees. Home Depot will require a lot of research to find the best locations for wood, and at the cheapest price. The feedback from the public, if Home Depot upholds its announcement, will be positive since people today are all about saving our natural habitat.
If the strategy is not successful, Home Depot will lose some of their customers. To avoid this, Home Depot needs to do other things in order to preserve the forests. They might need to use fertilizers in order to preserve the remaining trees in the forests.
As we already mentioned, Home Depot launched its website only few years ago (1999).
This shows at first instance the company’s interest in growing its sales revenues by selling online, and in offering more and better services to their costumers. But at the same time, this issue shows us that Home Depot, being such a big company, needs to update faster to technological advances especially in information systems such as Internet technology. Internet technology is useful not only to reach customers, but also as powerful information tool to improve the basic or most important operations and seizing customers.
Without explaining how does all these technologies functions (the intranet, extranet, and the Internet) it is important to look at the online services as a key asset to improve the company’s performance. So it is necessary to focus on a more aggressive advertising of the company’s web page to attract online shoppers. To continue this effort it is also necessary to constantly design and offer new services and benefits to online shoppers like the one actually Home Depot has done by opening on the 5th of November “the Online Holiday Gift Center – aimed at taking some of the hassle and hurry out of the upcoming holiday shopping season… offering gift cards for shoppers who still aren’t sure what to buy”
In order to implement the strategy of a more aggressive advertisement, it is essential to include the brand name www.homedepot.com in absolutely every logo (from the store’s outside sign to the plastic bags).
Also the media advertisements should be designed in a way that viewers can gain knowledge of the new services online and its benefits it offers. Online services must go further than being just a simple virtual store. The web page should be kind of marketplace for the do it yourself market, but in a friendly way. To offer every service in a friendly way is a key issue since most of the online shoppers prefer such service for several reasons like: any time every day service, the buyer don’t need to drive to the store and neither to walk the huge store if they just need is certain things and not the entire store, also if there is any store nearby, etc. and they don’t want to have an exhausting buying experience.
Other services can be offered targeting the online buyers, like a special account for regular buyers, so they can enjoy extra benefits as they buy more online. Also, taking the advantages of this information to create databases of regular customers. With their information of regular purchases or the need of maintenance on any previous items purchased. Then reminders can be sent on a regular basis, to assure that customers are continuously replenished and that their equipment functions properly at all times. These regular-customers can be granted with discounts and coupons over time, as well as facilitate their orders by offering them delivery. Distribution is facilitated by the great amount of locations in more than 5 countries, plus their constant expansion strategy. This last implementation will be of special interest for resellers and construction contractors all over the world.
Home Depot can also design a “second hand” products catalog were customers can both offer and purchase online only. Those products must fulfill certain requirements, for example that any given product should have been or still offered in the HD stores, preferably if bought there, to qualify as offerer/seller of the product Home Depot must first approve the person, this to avoid unethical people to offer bad or stolen products. There will be two categories, one for products in store previously taken to the store and bargained the repurchase, and the other category of products that are still in hands of an offerer/seller that will bargain with the buyer directly through the web page. Both categories are subject to an auctioning style or bid selling. Home Depot here can benefit in three ways, one by attracting more users to the web page, second by repurchasing second hand products and selling them again in a profitable bargain, and third by charging a fee to the users who wants to sell their products through the HD web page.
The outcome of this effort in the online sales is to have day to day more and new customers willing to buy online so in the future Home Depot can benefit from the growing e-commerce sales, and most important of all to gain advantage of the information that can be tracked through the internet. As mentioned above the information gathered can be immediately shared with other information systems, through the intranet and extranet to tell the managers of every department and the suppliers what it is needed and at the real time. The advantages of such information tool ultimately is to improve HD’s operational performance now that they know better the consumer behavior and its changes instantly, also for inventory control aiming the just a just in time policy, etc, so to make this possible it is crucial to upgrade other basic systems (logistics, purchasing, accounting, and others) that accordingly to the Business Week magazine from Nov 26,2001 had not been updated in years.
Expansion is an issue for Home Depot, it started out with only 1 store in 1978, and has over 1200 stores worldwide today. Many corporations have failed due to expanding too fast throughout the nation. Home Depot has expanded very fast, but expansion has not hurt Home Depot. Home Depot provides the largest variety of services and products in the industry and market it is in. Home Depot has always tried to provide the customer with as much variety of products as possible, from finding a small screw to building a whole house, a customer will have ease in their project. Home Depot even offers classes to its customers to show them how to do projects on their own. It has facilities in Santiago Chile, Argentina, Quebec and Puerto Rico. Not only opening stores in other countries but also expanding to some specialties.
In Home Depot one of its largest sections is the Bedroom, Bath, patio and window sections. To expand on this it has created a store called EXPO DESIGN CENTER. This store has eight showrooms that will help customers make the home of their dreams. This store is designed for a customer to be able to design their home in any way they like. Its specialty is interior design. A person can design their home anyway they want and be able to find all they different tools, products and services needed for them to design the interior of their house.
Home Depot acquired Georgia Lighting; this is a wholly owned subsidiary, which specializes in lighting fixtures, and accessories, accents, and supplies. This company is a distributor and retailer of a large collection of lighting products to commercial and retail consumers.
Villager’s Hardware is also a Home Depot project that has items for small home enhancements such as: closet organizers, cutting centers, house wares, and small gifts. Consumers can find a whole variety of products for gardening, electrical, plumbing, and decorative lighting. Offers special seminars and technical assistant to its consumers.
In 1999 Home Depot launched Home Depot University in its stores to help its consumers do their own projects. It also acquired Apex Supply Company, a wholesale plumbing distributor.
Home Depot Commercial Direct is a company that provides services to its commercial consumers in Canada. A consumer can order almost all their tools, equipment, and services online through this division.
Expansion is very important to Home Depot; everyday the organization is finding new ways to expand to serve its consumers.
For home Depot to successfully expand and keep growing in its industry, it would need to attack its strong points and try to improve any weakness that it has. Home Depot being the world’s largest do-it-yourself warehouse store has to keep providing the highest quality products to assure dependability to its consumers. It would need to study its environment and provide products accordingly to its customer base. Make as needed improvements on its website, to make it more buyer friendly, and user friendly.
To attacks its strong points, which is the products home depot provides. A consumer’s thought when buying from Home Depot is: the product that they purchased is dependable, durable, high quality. If there is a malfunction, Home Depot will replace or refund the consumer. To make sure the consumer is happy even after the malfunction of the equipment they purchased the replacement or refund should be done immediately.
Home Depot is located in all over the US, and has stores in other countries as well. Most of its stores are located in diverse location, to provide products and services catering those specific locations will help grow its customer base in those areas. A good example would be the South Eastern region of the country; weather during the summers is almost the same. With the exception of a small variance in temperature, it’s almost the same weather. Home Depot in times of Hurricanes and storms should stock up heavily on its wood supply. During hurricane season Home Depot is very helpful, having free seminars, and providing much needed information to its consumers about the steps they can take to prevent heavy damage during storms and hurricanes.
Expanding into the international market means that Home Depot will be providing its same great customer service in places where laws, regulations, and consumers who are different from the US. Home Depot would have to provide some supplies and products built in that specific country. It would need to make sure that those products and services are dependable and will promote consumer appreciation. It can do this by only selling the highest quality supplies, and selling the excess supplies and products from its US stores. This will create more consumers to appreciate the great service they will get at Home Depot.
Expanding on the web is a very important issue for Home Depot. Having a website that a consumer can practically do anything that they would be able to do in a store is the main goal for Home Depot. Home Depot has a very buyer-friendly website. Consumers can order almost any product that Home Depot has. A way to gain consumers trust on the web would be to secure its websites with the highest security as possible. To purchase any item on the web a consumer would have to make a electronic payment. The web is very vulnerable to crimes dealing with credit frauds. Home Depot using encryption, firewalls, and 24 hour network and security administrators to review all logs to provide a safe place for consumers to shop. Taking extra precautions and making sure that credit card transactions are secured on the web site can assure a consumer that buying online is very safe.
September 6, Thursday: All members get together after class for 15 minutes to select our company.
September 18, Tuesday: Arrangements are done on meeting every Tuesday after class for 15 minutes. Print outs of Home Depot’s web site are revised.
September 25, Tuesday: Today’s meeting extended for 30 minutes while we debated on the different strengths, weaknesses, opportunities and threats Home Depot encounters.
October 2, Tuesday: Today’s topic was regarding the current strategies and main issues Home Depot is assessing.
October 9, Tuesday: After taking note of previous meetings, each member is assigned to type at least two pages with this information.
October 11, Thursday: A deadline is given by Sunday at midnight to send as an attachment the two typed pages assigned to each individual.
October 16, Tuesday: No meeting today.
October 23, Tuesday: In today’s meeting arrangements are done to meet on the days given off by Professor Blockson.
November 1, Thursday: Group meets at same time and place of regular class meetings to discuss Home Depot’s issues in more detail.
November 8, Thursday: In today’s meeting same issues are addressed. Team members are assigned one issue to be developed in more depth.
November 13, Tuesday: Meetings are changed again for Tuesday’s after class. Articles and web sites found by each member are distributed evenly for resources.
November 20, Tuesday: Deadline is given by Sunday at Midnight to submit three typed pages as an e-mail attachment. The additional team member is in charge of organizing, proof-reading, inserting articles and binding information into one whole document.
November 27, Tuesday: Congratulations Team Partners!!!!!!!!! We did it. Thanks to every one for their diligence, punctuality, and knowledge and work provided.