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Home depot business model strategy
Home depot and its operation strategy
Home depot business model strategy
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Home Depot is the household home improvement retailer that we all know today but it wasn’t easy to get to where they are now. The powerhouse had to go through many ups and downs before it was able to become what it is today. Before starting in Atlanta, Home Depot’s had to go through the four P’s of marketing to decide what company they wanted to be. When Arthur Blank, Benard Marcus, Kenneth Langone and Pat Farrah decided to start home depot they wanted it to be a bigger version of the mom and pop store (Handy Dan) they had previously worked for. The group decided that their products would be home improvement supplies. The second P (price) is what separated them from the competition, they prided themselves on their low prices, which would bring customers in the door. Promotion in the 70’s wasn’t easy but they did what they could, through paper ads and radio shows they were able to promote their stores and products. Their place was decided upon Atlanta because of it large population and potential for home improvement needs. Through all of the growth and success of Home Depot there have been many failures that the company has endured in its life. …show more content…
Even though they lost one million after the first year, Home Depot went on to profit one million dollars after the second year. They are also pride themselves on paying their employees very well and creating a great work environment. After just a few years of opening up shop they cracked the one billion dollar mark. When the Olympics was in the United States, Home Depot sponsored the games and provided jobs for the athletes who could not afford training. After the games were through, Home Depots employees won a total of 58 medals. Home Depot has been through many successes and failures on it climb to the top of the Home improvement retail industry. However going through these challenging and thriving times has made them who they
Internally the strategy moving forward was unclear. The chance to address 25,000 dealers demanded the new leadership had a clear picture of their mission moving forward. With a very narrow scope of product offerings and the slowing sales of their high-end speakers, the decision to expand into additional products, or stay focused on their main revenue source would determine the future of the company. Offering their product in the large retailer market and pulling away from the independent installers had already damaged their brand equity. Furthermore, engaging with the production home builders, while generating the necessary revenues for survival, alienated the custom installer and their referral clients. (Kerin & Peterson, 2013). Considering the relatively small size of the company combined with the dangers associated with brand extension could overstress the resources necessary to launch and maintain a new line. One of the keys to a successful concentric diversification is close coordination with existing customers and distributors. Unfortunately, the dealers that had made them successful were not pleased with their recent brand dilution. (Gordon,
In the early 2000’s Lowe’s was rapidly intensifying its presence nationwide. The company carried a varied assortment of home improvement products and catered to the needs of retail as well as commercial business customers. Lowe’s expanded their reach by acquiring a 41-store chain, Eagle Hardware and Garden, and engaging in a strategic alliance with HGTV to obtain a more profound existence in their market (Rouse, 2005). By 2004, Lowe’s operated almost 1,000 stores with plans to continue expansion across the nation (Rouse, 2005). The company has a core competency in helping customers meet their home improvement needs at a low price. In order to use this core competency to gain a competitive advantage, the company has focused on key functional strategies. To continue their success, Lowe’s must specifically focus on marketing, logistics, and human resource management strategies.
Lowe’s Companies, Inc. is averaging the opening of about two stores per week. This is part of an unprecedented two billion dollar store expansion, which is the most aggressive expansion in the company’s fifty-five year history; thus, magnifying Lowe’s locality and customer convenience in the United Sates home improvement marketplace. Lowe’s new superstores are currently the largest in the home improvement marketplace, averaging a retail space of about 150,000 square feet. (http://www.lowes.com)
Bianchi, C. (2006). Home Depot in Chile: Case study. Retrieved January 10, 2011, from http://www.carlospitta.com/Courses/Gestion%20Financiera%20Internacional/Cases/Home%20Depot%20Case.pdf
Their stock prices have continued to rise even during recessions and the data breach. The Home Depot continues to surpass its competitors such as Lowes, and is widely known for their diversification in the industry. I shop at Home Depot for this reason - buy anything online & pick it up in stores.
Best Buy’s History & Main Characters: Best Buy is Minneapolis-based and is North America's leading specialty retailer of consumer electronics, personal computers, entertainment software and appliances. Throughout Best Buy's 37-year history, the company has maintained the tradition of making life fun and easy for customers and employees, while providing a significant return to partners and investors. It has 80,000 employees and over 550 stores in the U.S., in addition to the brands Best Buy Canada, Future Shop and Magnolia Hi-Fi. Their leadership is led by Dick Schulze, Founder and Chairman, Brad Anderson, Vice Chairman and CEO, Al Lenzmeier, President and COO, and Darren Jackson, Executive Vice President of Finance and CFO. Chairman Dick Schulze founded Best Buy in 1966 with the Sound of Music, an audio component systems store in St. Paul, Minn. In 1973, Vice Chairman and CEO Brad Anderson joined Sound of Music as a salesperson. The company quickly expanded into video products and computers, was renamed Best Buy in 1983, and became a public company in 1985. Best Buy’s revenues for fiscal year 2003 were $20.9 billion and net earnings of $622 million. It was ranked number 91 on the Fortune 500 in 2003 (Bestbuy.com). Best Buy stores are redefining the way customers shop by offering an unparalleled assortment of affordable, easy-to-use entertainment and technology products and services available through its network of more than 550 retail stores in 48 states and online at BestBuy.com. Best Buy is scheduled to open 60 new stores in fiscal 2003 and is on track to have 650 stores by fiscal 2005. Magnolia Hi-Fi is a high-end electronics retailer specializing in audio and video solutions for homes, ...
And so the company may face trouble with strong ecological forces and they need to make lots of innovation and research in order to gain product improvisation which would take lots of time. When it comes to The Home Depot, the ecological forces might not be making a huge impact as they produce many other products which include not just the household products but also the lumber and gardening tools (Choi, 2012, p. 1).
The Home Depot’s mission statement is “to provide the highest level of service, the broadest selection of products, and the most competitive prices." (Homedepot.com) In order for the company to follow through with their mission they provide their consumers with expertly trained associates who are able to teach customers how to handle power tools, change a valve, or lay tile. It is not enough to tell or sell their customer’s the product, the associates have to be able to show them out to complete their tasks through DIY clinics or one-on-one workshops offered by The Home Depot.
The Home Depot learned the hard way that you must hire a leader that will stay true to the core values. The leader’s ethics and values will play a huge role in determining if the company will succeed or fail. The founders of The Home Depot built a culture on the foundation of respect, integrity, and compassion. The culture and customer service under the influence of the admired founders prospered.
The customers are the top priority. Next are the front-line associates, then field support, and then corporate support. The CEO comes last. In this prioritization, Home Depot’s organizational culture ensures that corporate values are inculcated among all employees, especially the front-line workers at the stores. In addition, this feature of the organizational culture highlights the value and contributions of front-line workers, translating to Home Depot’s managerial approach that recognizes idea and action contributions from
Home Depot is the world’s largest retailer for home improvement, which sales the following: building materials, home improvement, lawn and garden products. Home Depot has recognized expanded growth in revenues by 5%, and a 16% increase in earnings per share for Q1 2017 (Soni, 2016). Further, Home Depot contributes growth to the fully integrated retail channel. For example, the store offers options such as purchase online and pick up in store. . This type of shopping creates frictionless shopping across its retail channels by means of driving traffic both online and within its stores. SWOT analysis permits the creation of a plan of actions necessary for utilizing an organizations strengths and for minimizing the effect of its weaknesses
First, it acquired three flooring companies, which would make it the turnkey flooring supplier. Second, aforementioned in the earlier paragraphs, they have also made use of initiatives to attract professional customers. In line with this, they created their personal brand lines targeted towards the professional market. Third, unlike Lowe’s which established itself in the rural areas, Home Depot has long been in the metropolitan area. It’s form of expansion comes in the form of acquisition of EXPO Design Centers, retail shops in urban shops, and international branching, establishing itself in Canada and Mexico, through, yet again acquisition of existing chains in their respective locations. Their performance, however, due to numerous expansions and/or mismanagement, has declined, specifically, customer service and operating
The Article, "Renovating Home Depot," describes how, since the arrival of the new Chief Executive, Robert Nardelli, the business strategy has shifted to a more militaristic style. In the beginning, Home Depot was a "decentralized, entrepreneurial" business, and now is switching to a different management style. Nardelli loves to hire ex-soldiers, and is perhaps using the armed services as a role model for the new business structure. Under Nardelli's leadership, Home Depot is becoming more centralized and the good financial reports following this are signs that it a good strategy (Grow 50).
Black & Decker’s 9% share versus Makita’s 50% in the tradesmen segment is caused by three reasons, the brand perception, the new distribution channels and the tool’s color.
Even with all of things I’ve for mentioned, there’s so much more that goes into keeping a hardware store in business and stay afloat the 11 hours a day they are open, seven days a week, for 360 days a year. I could probably write an entire book about different things that you need to keep up with at the store, like stocking/ordering information, point of sale system, deliveries, floor cleaning, correctly counting out the cash registers…the list goes on and on. It’s a never ending cycle when it all comes down to it, but you need to stay on the ball with it. The second you fall behind in the hardware business (for any small business for that matter.), is when you’re most vulnerable to the decline of your business.