Category: Home Depot

Introduction

Business scholarship is consistent that mission statements not only help focus the organization on what really matters to itself as well as its stakeholders, but also define the firms core business, its objectives and its strategy to reach those objectives (Abraham, 2012; Rigby, 2015).

Research also underscores the importance of undertaking regular evaluations of mission statements to align them with existing environmental considerations and also to proclaim the uniqueness of the organization within the context of corporate purpose and scope of operations (Sevier, 2003). The present paper assesses the mission statements of two internationally recognized business enterprises with the view to explaining the extent to which these statements have succeeded in meeting the set criteria for assessment.

Evaluation of Home Depots Mission Statement

Home Depots mission statement underscores the main purpose of the organization as well as the primary objectives that drive the company. The mission statement seems oriented to satisfying the needs of customers by providing them with the highest level of service, the widest selection of products, as well as the most competitive prices. Consequently, although the mission statement is silent on the companys targeted customers, it nevertheless identifies their needs as indicated above.

Additionally, the mission statement indicates how the company plans to serve its customers by suggesting that Home Depot is a values-driven company that achieves satisfaction by providing excellent customer service and building strong relationships with customers and other stakeholders. Such value propositions drive customer interest in Home Depots product offerings and also enhance the firms competitive advantage (Abraham, 2012; Harmon, 2006).

It can be argued that Home Depots mission statement is based on the companys core competencies of broad product differentiation, customer service, as well as low prices. These core competencies fit well into a market environment that is characteristically driven by stiff competition for market share and profitability. Furthermore, Home Depots mission statement inspires and motivates its employees as it underscores the importance of doing the right thing and taking care of staff members in the best possible way.

Home Depots mission statement is quite realistic; however, it is neither concise nor sharply focused. Such an orientation implies that it may be impossible for some stakeholders to have a clear comprehension of the goals and objectives of the mission statement.

Although the mission statement is suggestive of how the company wants to be remembered (e.g., by giving back to society and respecting all people), available literature demonstrates that communicating the mission statement in a clear, simple and precise language is important in emboldening an organizations corporate culture, values, strategy and view of the future (Rigby, 2015). Consequently, Home Depot needs to shorten and focus its mission statement with the view to achieving clarity of objectives and ease of understanding.

Evaluation of Nikes Mission Statement

Nikes mission statement is not only specific and sharply focused, but is also quite unforgettable to target customers and other stakeholders due to its succinctness, simplicity, and intelligibility. Such clarity and ease of understanding helps Nike to define its major objectives of bringing inspiration and innovation to every sports personality who uses the companys products (Rigby, 2015).

The inspiration and innovation catchwords demonstrate that the mission statement is focused on satisfying customer needs by supplying them with high-level products. Although the mission statement does not explain the particular customer needs the company is attempting to satisfy, it nevertheless demonstrates that most of Nikes customers are athletes. However, it is important for the company to work on identifying and stating the needs of its customers in the mission statement.

The mission statement is also clear that it will serve the companys customers through the use of inspiration and innovation. These principles fit into the current market environment which requires companies to be increasingly innovative and to develop highly differentiated products if they are to retain their market share and penetrate new markets (Sevier, 2003).

Additionally, the principles of inspiration and innovation help the company to not only define performance standards, but also to establish a framework for ethical behavior (Rigby, 2015). Nikes mission statement is based on the companys core competencies of design, innovation and credibility with suppliers, implying that the statement resonates well with its purpose, business objectives and goals.

This also implies that the company wants to be remembered for improving the quality of life of athletes by supplying them with innovative and highly differentiated products. Although the mission statement does not mention the companys employees, it nonetheless motivates and inspires employee commitment going by the fact that the multinational company is one of the most attractive and sought after employers in the world. However, it would have been advantageous for Nike to include a short statement on its relationship with employees and how it gives back to society through corporate social responsibility (CSR) programs.

Conclusion

This paper has evaluated the mission statements of Home Depot and Nike with the view to bringing out the strong and weak points in the statements in accordance with the set criteria.

From the evaluation and analysis, it is evident that both companies have strong mission statements that serve to focus them to their respective purposes, business goals, as well as objectives. However, these companies need to work on the indentified weaknesses to make them more competitive in a business environment that is characterized by turbulence and stiff competition.

References

Abraham, S.C. (2012). Strategic management for organizations. San Diego, CA: Bridgepoint Education.

Harmon, R. (2006). Getting a business off the ground requires soul-searching and intensive research. NJBIZ: Finance and Growth Journal, 19(1), 6-7.

Rigby, D.K. (2015). Management tools 2015: An executives guide.

Sevier, R.A. (2003). Fine-tuning your mission. University Business, 6(6), 21-22.

Home Depot Incorporation was founded in Atlanta, Georgia in the year 1978 by Arthur Blank and Bernie Marcus. Both Arthur and Bernie had been fired from a small company that dealt with home improvement products thus the decision to start a retail store providing these products. At its commencement, Home Depot had a warehouse stocked with a wide variety of home improvement products at very low prices.

From then on, the company has grown to be the largest chain offering home improvement items in the world. At the start, the company grew at a much slower pace but with time the business picked and today Home Depot is a successful enterprise.

With over 2,000stores across the globe, Home Depot is a booming enterprise with Lowe as its main competitor. With reference to the case study, this paper will assess Home depots growth strategy, its current business environment, the industry, competitors, the strategies used, and how the company can address the challenges it is facing.

The business environment of a company includes the various aspects of its surrounding which affects the operations in one way or another. In other words, Home Depots business environment is a set of conditions that cannot be controlled by nature whereby these conditions affects its normal functioning.

Just like any other company, Home Depot has internal and external environments. Its internal environment consists of factors like manpower, machinery, cash, and management which can be controlled by the business. Home Depot can make changes in the internal environment with respect to changes in the businesss functioning.

This is evidenced by changes in the top management since the companys inception and the growing number of its workforce and stores. From the year 1979 to the year 2006, the companys revenue grew from $ 22 million to $90.8 billion respectively. When Home Depot commenced its operations up to the year 2000, one of its co-founders acted as the CEO (Hess 2).

Having grown the companys revenue tremendously, the board of directors embraced change by replacing Blank with Bob Nardelli. Having served in the military, Nardelli employed a completely different strategy. He imported manpower and ideas from the military and as a result caused culture overhaul.

Previously, Home Depot had a culture that was low profiled and collaborative but Nardelli converted it to a culture of fear (Hess 3). The decline in sales experienced during the 1990s can be attributed to the form of management employed by Nardelli.

Changing the decentralized strategy that paid attention to employees and more importantly to the customers led to the low sales. This shows that changing the internal environment of the business does affect its businesss performance in different ways.

On the other hand, the external environment of Home Depot consists of factors that are beyond its control. The external environment of the business does affect its internal functioning, the strategies it employs, and its objectives as well. The operative external environment of the business consists of customers, the suppliers, competitors, market intermediaries, and the public as well.

The suppliers provide the company with raw materials therefore they must be reliable to ensure success of the business. Home Depot is a multinational company operating across the globe meaning that it has multiple suppliers. Customers are constituents of the businesss external environment.

Customers determine the success of the business therefore the need to tailor products that will provide maximum satisfaction. Home Depot is a large incorporation thus its customers range from industries, wholesalers, retailers, and governmental institutions.

Also, important to the external environment of the business are the market intermediaries who link the final consumers of the products to the business. Banks and other financial intermediaries, middle men, and marketing agencies fall under this category.

Competitors are an important constituent of the external environment of the business as well. Each and every move which a competitor makes affects the company. Home Depots competitor is Lowe; with this in mind, Home Depot has to keep on adjusting according to the strategies which its competitor employs.

Both Lowes and Home Depot compete in the Do It Yourself market for home improvement products. The merchandise offered by these two include building materials, millwork, and lumber, kitchen, plumbing, electrical, wall covering, paint, and flooring (Hess 4).

The Do It Yourself strategy was first adopted by Home Depot but Lowes has always been pushed by market forces to survive the stiff competition. After conducting SWOT analysis for both companies, it is clear that they possess the same strengths even though Lowe has never out performed Home Depot.

In this case, Lowe is found to have been the market leader and as a result has its loyal customers. On the other hand, Home Depot employed a better strategy of price leadership. The business took the strategy of offering the same product as Lowe but at a lower price.

The public which makes up the external environment of a business consists of people who have vested interest on the operations of the business.

On the macro or rather general external environment of a business, the PESTLE analysis is always carried out to establish its stand on the industry. PESTLE stands for political, economic, social-cultural, technological, legal, and environmental factors that make the external environment of a business.

The political factor determines how a change in governmental policy can affect a business. Political factors are felt in areas like labor and environmental laws, tax policies, tariffs and trade restrictions as well as the political stability of a country.

The economic environment is dynamic and it reacts to changes in politics and policies. An economy can affect a business through government spending, exchange rates, and interest rates among others. Social factors analyze how the beliefs and behaviors of the consumers affect the business. Culture, attitudes, and population constitute the social factors of the external environment.

The technological environment concentrates on the speed at which product innovations and production processes can affect the business. Ethics are important for a business for they lead the management and workforce to do what is regarded as morally right. Time and again, integrity and acting in an ethical manner have been said to be the driving forces that have contributed to Home Depots success.

Environmental factors including the aspects of climate, climatic change, and weather which are important in the external environment of a business. Legal factors include consumer laws, discrimination laws, and employment laws. All these factors are important components of Home Depots external environment for they affect its operations in the short and long terms.

Since the 1990s, the industry of home improvement has experienced a speedy growth. With the wealth effect, many people have invested heavily on expensive and prized possessions. Change of customer needs, increased housing expenditure, and the internet has made the industry what it is today.

In its current situation, Home Depot has employed successful business strategies that can be summed into its core values. The core values include: offering excellent service to customers, caring for the people, being ethical, shareholder value, respecting all people, giving back to the society, maintaining a spirit of entrepreneurship, and building strong and lasting relationships.

The vision of stores with a wide variety of assorted products at low prices and giving customers excellent services has contributed to the companys success. The greatest strength exhibited by Home Depot is its ability to listen to its customers. The companys dedication to provide customers with an excellent service contributes to its success.

The only weakness the company has is that it spends more on advertising so as to lock out its competitors. After analysis of every aspect of the company, it is clear that the situation that needs to be addressed by Home Depot concerns the growth strategy. Robert Nardellis leadership and management styles did no good to Home Depot therefore the new CEO is faced by a challenging task concerning a growth strategy.

Alternative actions to address the situation

There is need to change the GE style, human resource policies, accountability, technology, and operating efficiencies that were existent during Nardellis tenure. Nardelli significantly changed the entire culture of Home Depot through changes in merchandising, the executive, centralization, and purchasing and inventory.

The founders Blank and Marcus adopted an entrepreneurial and decentralized culture that gave first priority to employees and customers. Now that Blake is facing a huge challenge of bringing back Home Depots credibility, he can do so by using alternative business strategies.

The alternative business strategies should work on improving the current stores, diversifying services, finding new channels, and expanding the business to the global front.

The change should come from the top management then to the retailers such that they can schedule and optimize their work time. The company should put into consideration ways in which shoppers can be more efficient. This can be done through the provision of self-checkouts.

The best action which Frank Blake can take is to embrace the entrepreneurial spirit so as to settle problems regarding shareholders and employees. Rethinking the current strategies will also be a good alternative. Bringing one of the co-founders of Home Depot to the management level could work well in reorganizing the business.

Redirecting, reorganizing, and dis-positioning of the existing business strategies and some of its operations will be the best alternative. Redirecting the management from its current centralized nature to a decentralized one will enable the business to reach all the customers.

A decentralized management will allow the business time to be close to the customers and through research and development it will capture firsthand information on the needs and wants of the customers.

The information provided by the store managers will aid in decision making. Again, reorganizing the business to adopt the previously used inverted pyramid will help in overcoming the challenge. The pyramid structure recognizes the people working in the stores as very important since they are the ones in close contact with the customers.

Home Depot can employ the best cost provider competitive strategy to draw a line between the enterprise and its competitors. It is a fact that Home Depots competitors do offer installation services but the enterprise supposedly offers the services at affordable prices.

Nardelli opted for acquisitions and mergers and through them; Home Depot has been able to outdo its competitors. This trend can be used to increase the businesss market share through the opening of more retail stores across the globe.

The Do It Yourself approach coupled with differentiation and price leadership will be great alternatives which the business can take. All these alternatives will aid in satisfying the customers thus the growth of the business (Hess 6).

Recommendation

The best solution for this situation at Home Depot is reorganizing and redirecting the management style. Decentralizing the business like before will enable the business to reach and keep contact with all classes of its customers. Investing in technology will enable customers to order products online. The advancing technology also allows product innovation and production processes.

A decentralized management system, excellent customer service, and competitive prices will keep Home Depot on top. Wide range of assorted products and excellent distribution channels will be a part of the decentralization. Ensuring that the mission and vision statements are observed will keep Home Depot on top.

The core values which include: offering excellent service to customers, caring for the people, being ethical, shareholder value, respecting all people, giving back to the society, maintaining a spirit of entrepreneurship, and building strong and lasting relationships will work well in improving the situation.

The vision of stores with a wide variety of assorted products at low prices and giving customers excellent services will aid in the decentralization. The competitive strategies to use will include differentiation and price leadership (Hess 8).

The financial objectives of Home Depot include growing its revenue by a certain percentage, growing the companys market share through acquisitions and mergers, growing the return on sales and return on investment, and a strong cash flow.

Just like any other multinational company, Home Depot has an objective to be stable in the market, and having a solid balance sheet as well as a good ability to invest.

The implementation plan for Home Depot will aid in measuring the success of the business strategies employed. The implementation plan breaks down each strategy to steps that the management can identify with. These steps are then assigned to people to suggest when each can be completed.

For the implementation to be successful, the objectives should be clear, each task should be assigned with a deadline, and then progress monitored so as to achieve the intended goals and milestones (Hess 10).

In summary, the implementation plan should have: objectives, the tasks to be carried out, time allocation, and then the progress.

Conclusion

The Home Depot incorporation was founded by Arthur Blank and Bernie Marcus in Atlanta, Georgia in the year 1978. The company has been successful since its inception due to its good management and business strategies. With over 2,000 stores across the globe, Home Depot is a booming enterprise with Lowe as its main competitor.

Even though Nardelli changed the management style and culture of the business, Home Depot has always remained unmatched. In this case analysis, the key issue identified is poor growth strategy.

With decentralization of the management, this situation can be done away with since the company will be able to keep in contact with its customers. This way, products can be tailored to give the customers maximum satisfaction hence brand loyalty. An implementation plan is important for it aids in the achievement of financial objectives as well.

Works Cited

Hess, Edward. The Home Depot Inc. Virginia: Darden Business Publishing, 2007. Print.

Application Overview Project Color™

The application helps the user to complete the paint job without any additional efforts. According to the description, it “allows you to see, match, or find the perfect color for your interior or exterior paint or stain project” (“Project Color™” par. 1).

Key features of the app and overall impression

Project Color™ is created for digitally adding colors to the painted object before even picking up the brush; as a result, the user already knows which colors will best suit his project.

The target audience of the application is people who are dealing with the renovation of their flats of houses; students who are doing designer projects and possibly artists in order to make their job easier. In my opinion, the application was created out of good intentions, as it is free. Moreover, the Project Color™ is used primarily by amateurs; skilled designers hardly would use an application for an iPhone to fulfill their work.

Positive characteristics

The application has a list of practical features that make the using of it more efficient and pleasant. The major positive attribute is usability: the consumer only needs to take a photo of the room to be painted, or it could be uploaded from the iPhone library.

Moreover, there even is a ‘live view’ of the room. Another feature that makes the application enjoyable is the variety of dye and stain shades; every person is guaranteed to find a color to his taste.

Negative characteristics

I experienced only one unfavorable feature. While taking the photo in the live view, the application sometimes crashes.

Impact on society

To my opinion, the Project Color™ will help the consumers to capture the perfect color or shade, thus making the repair job easier and less stressful.

Application Overview Google Calendar

The Google Calendar allows the consumer to save time efficiently and allocate his business in order of importance and urgency. It was released by Google, Inc. and fully meets the company name. It can be used not only for business but for personal purposes as well.

Key features of the app and overall impression

The application can provide a schedule connected with Gmail; moreover, “flight, hotel, concert, restaurant reservations and more are added to calendar automatically” (“Google Calendar” par. 3). The application is designed for audiences of any age and employment with an iPhone available. Google Calendar is free, so to my opinion, it hardly was created for making money.

Positive characteristics

Google Calendar is quite comfortable in use, especially with a renewed schedule view added. It allows getting familiar with the images and maps of the place accumulated to the calendar. The application also suggests titles and headlines for different events and places of attendance. The calendar provides an opportunity for distinctive ways of outlook: switching from day to day or observe several days at once.

Negative characteristics

I have experienced one crucial negative feature while using Google Calendar. It has failed to assign an event to calendars of different users. For example, it was impossible for me to add the members of my family via Google Calendar for an event that is meant to be for several people. The application should be able to provide the observing of collective events to its members without giving access to a calendar of the organizer.

Impact on society

Google Calendar is an efficient application for those who value their time. It is meant to improve the distribution of events and business timetable, so its impact on society is quite considerable. This is one of the applications that will make your life better.

Works Cited

Google Calendar 2015. Web.

Project Color™ by The Home Depot2015. Web.

Background

The Home Depot Foundation was established in 2011 as a public charity that works in cooperation with the U.S. government initially to address the housing conditions of military veterans and provide help to communities that had gone through a disaster (“The Home Depot Foundation,” 2018). Today, the Foundation’s operations are divided into the following categories:

• National Partner Grants Program;
• Veteran Housing Grants Program;
• Community Impact Grants Program;
• Disaster Relief Program;
• Team Depot.

Partners and Resources

The organization cooperates with a small group of the United States’ of the most engaged non-profit partners in general community improvement work as well as addressing the challenges that veterans and populations impacted by natural disasters face (“The Home Depot Foundation,” 2018). Key partners include the American Red Cross, Convoy of Hope, Habitat for Humanity International, Meals on Wheels America, Operation Blessing, and several others.

Since community impact is a large part of the Foundation’s operations, it will be examined in greater detail. Up to $5,000 is given out in grants to designated organizations and public services agencies exempt from paying taxes to fund projects targeted at community improvement. In general, grants are financed through Home Depot gift cards that organizations can use to buy materials, tools, or fund services they need to complete. The target population of the community improvement programs are veterans, with more than 37,000 homes and public facilitates updated to improve the lives of those who served the United States in the battlefield (“Honoring our veterans,” 2018). The need for the veterans-based community improvement programs emerged because of the decreased quality of their lives associated with posttraumatic stress disorder, unemployment, poor adjustability in the society, the lack of financial support and others (Oppezzo et al., 2016). Based on the report from the Home Depot Foundation, veteran support is conducted through a volunteer force, with all people, interested in the participation of community improvement projects, welcomed to devote their time and energy.

Impact

The impact of community improvement programs that the Home Depot Foundation implements is expected to be long-term and sustainable, especially given the increasing number of partners that collaborate with the organization to provide localized aid to veterans. Accomplishments and goals for the upcoming years that the Foundation reported include:

• More than 37,000 homes and facilities improved since 2011;
• 3,840 cities improved through the organization’s support since 2011;
• The goal quarter of a billion dollars in commitment to veteran causes reached two years earlier (in 2018 instead of 2010);
• $50 million committed to training 20,000 tradespeople by 2028 (“Community,” 2018).

The Foundation has a strong online presence, which aligns with its mission to engage as many people as possible into giving back to their local communities and helping veterans in particular. The organization has accounts on Instagram, Youtube, Twitter, and Facebook, enabling followers and subscribers to engage in the conversation about community improvement programs. Also, there is a dedicated web resource that has the latest news on the Foundation’s accomplishments and reports on its future goals.

Conclusion

Overall, the Home Depot Foundation is a valuable contributor to community improvement initiatives implemented on the US-wide level. The Foundation collaborates with respected non-profit organizations that have proved their trustworthiness on a global scale. The specific focus on veterans’ life improvement should be noted because this target population is continuously struggling with various emotional and socioeconomic problems that can be improved through the provision of adequate housing and supplementary facilities.

References

Community. (2018). Web.

The Home Depot Foundation. (2018). Web.

Honoring our veterans. (2018). Web.

Oppezzo, M. A., Michalek, A. K., Delucchi, K., Baiocchi, M. T. M., Barnett, P. G., & Prochaska, J. J. (2016). Health-related quality of life among veterans in addictions treatment: Identifying behavioral targets for future intervention. Quality of Life Research : An International Journal of Quality of Life Aspects of Treatment, Care and Rehabilitation, 25(8), 1949-1957.

Charts

The graph presented below shows the 6-month chart for the stock prices.

The graph presented below shows a comparison of the 6-month chart for the Home Depot Company, NASDAQ, S&P 500, and Dow Jones Industrial Average.

Discussion

In the graph above, it can be noted that there was a general rise in the value of the stock for Home Depot and the market as represented by the trend for NASDAQ, S&P 500, and Dow Jones Industrial Average. It can be observed that the trend for the three market indices moved in the same direction throughout the six months. The trend for Home depot was similar to the market trend until August. However, from August, the stock price for Home Deport rose faster than the market indices.

Profitability

The table presented below shows a summary of the total revenue, gross profit, operating income, and net income.

Based on the table above, it can be observed that there was a general increase in the value of the total revenue and income. Total revenue increased by 11.96% during the three years. The gross profit rose by 12.89%. The operating income and net income increased by 37.61% and 38.68% respectively. The rise in the values shows that there was an improvement in profitability. This also indicates the growing inefficiency of management in managing sales and pricing. The trailing profit margin (ttm) for the company for the year ended 2^nd February 2014 was 7.18%, while the trailing operating margin (ttm) was 12.12%. The values are quite high and it is an indication of high profitability.

Analyst Opinion

The mean recommended by the analysts this week is 2.0 while for last week was 2.0. This implies that an investor should buy the stock because they anticipate earning a positive return. Further, the upgrade and downgrade history show that the company had 5 upgrades and 3 downgrades. It shows that the company performs well financially.

Analyst estimates

The analysts estimate that revenue for the year 2014 will be $82.65billion. They expected the revenue to grow to $86.30billion in 2015. Further, the expected earnings per share for 2014 is $4.50 while in 2015, the analysts expected the earnings per share to increase to $5.21. Finally, this year, the company is expected to grow by 19.70% and by 15.80% next year. The industry in which the company operates is expected to grow by 9.90% this year and 21.60% next year, while the sector is expected to grow by 7.80% this year and 17.60% next year. Finally, the performance of the S&P 500 index is expected to grow by 7.90% this year and 10.90% in 2015. Thus, analysts expected that the growth of the company in 2014 will surpass that of the industry, sector, and S&P 500 index. Generally, analysts anticipate that the company will report growth in performance in 2014 and 2015.

Summary

On 5^th November 2014, the closing price for the stock of Home Depot was $95.78. The price was 0.18 points down. This is equivalent to a 0.19% decrease. The 6-month chart presented above shows that there was a general rise in the price of the stock as indicated by the upward trend. Further, it can be pointed out that there was less volatility because the range of price movement as a percentage of the average of high and low prices was dismal.

Reference

Yahoo Finance. (2014). The home depot, inc. (HD). Web.

The Home Deport was founded in 1978 as a self service shop to ease shopping activities for consumers who were forced to travel for longer time to find retail shops to acquire goods for consumption (Hitt, 2010).

The first shop consisting of a warehouse was established in Atlanta, Georgia thus reducing transportation cost and availing goods to customers whenever there ware in need (Roush, 2009). The associates achieved this through rigorous product knowledge training and clinics for their customers.

Controlling aspects in an organization

Controlling is an act of verifying whether the organizational activities are conducted in relation to the plans developed and according to supervisor’s instructions (Roush,2009).It enhances effectiveness and efficiency in utilization of resources in order to achieve the organization goals by measuring the deviation of actual performance from the standard performance and suggesting the corrective measures (Hitt,2010).

Controlling function is achieved through the following aspects. To start with, it is achieved through delegation, which entails assigning responsibility to the employees and granting them the authority to utilize available resources to accomplish the jobs (Hitt,2010).

The supervisor shares accountability by ensuring the task is accomplished, he assists the worker in establishing goals ,granting him the authority and responsibility to work and achieve set goals(Hitt,2010).In addition, the supervisor avails resources to the worker as well as recommending him for reward to the top management(Roush,2009).

Secondly, controlling involves evaluation. This is a careful collection and analysis of information in order to make and amends decisions within various departments in an organization focusing on goals, production processes and the final goods or services (Hitt, 2010).

The management evaluates the previous goals set and introduce new measures for improving quality of production of the company products (Hitt, 2010).Similarly, controlling entails leading roles that require the management give direction the junior workers on how the duties are carried out in terms of job requirements in order to increase the profit level of the company (Davenport, 2007).

Steps taken by Nardelli in renovating Home Depot

The arrival of Chief Executive Robert Nardelli noted series of developmental programs to business that for a long time had been a decentralized business enterprise by recruiting military personnel to participate in the management of various departments(Davenport, 2007) He believed in the kind of discipline and maturity soldiers get during military training and claimed the background is instrumental in the management of a business organization (Roush,2009).

The importation of military ideas gave the competitors such as Wal-Mart Company an opportunity to improve sales promotion techniques in order to convince Home Deport customers to change to their products(Roush,2009). Nardelli concentrated in building a disciplined corps capable of operating under high-pressure environment and producing high quality goods and services (Davenport,2007).

Secondly, he ensured cultural overhaul in promoting sales of the goods and services from Home Depot by safeguarding autonomy of the workers in all departments thereby creating a sense of belonging in all workers of the company (Roush,2009).This led to the rise in profit made by the company from $46 billion in the year 2000 to $81.5 billion in the year 2005 when annual growth was announced(Davenport,2007).

Similarly, Nardelli launched a move to expand the company and provide goods and services to consumers out side the United States (Davenport, 2007).

The company achieved this by reducing the growth of new stores in the United States leading to excess resources within the Home Depot Supply which is a sales unit hawking pipes and building materials for the company hence constructed a branch in China (Davenport, 2007).

In order to raise the company’s profit, Nardelli made both Saturday and Sunday normal working day and ensured all workers were available. He introduced the program immediately after taking over from his predecessor William Conaty giving him an uphill against the workers (Roush, 2009).

Moreover, the deport introduced a ranking system where workers were grouped according to the financial gain to the company, area of operation and skill possessed in for handling customers, he claimed that the value addition of an employee is equivalent to the quality of service offered to the customers (Davenport, 2007).

Lastly, Nandelli emphasizes on the recruitment of senior citizens into the company hence making the local people in an area in which company is located feel appreciated and purchase goods from the Home Depot (Davenport, 2007).

Applying Nardelli’s approach in health care setting

Nardelli’s approach is capable of improving service delivery in an organization; its application into health sector would reflect tremendous improvements in health institutions (Davenport, 2007).

To start with, trained military personnel should be recruited among the service providers in the hospitals and other health departments since they acquire high level discipline during their training and posses skills in disaster management relevant to health sector (Hitt,2010).

Similarly, the provision of medical services should be done through out the week since it involves the provision of essential services required every time by the citizens thus all health workers should attend to serve the sick and emergency cases (Davenport,2007 ).

Similarly, the approach applies on locating hospitals in areas closer to the citizens where they can easily acquire the health services at the right time (Hitt, 2010). For example the Home Depot Company established its branches in China, Mexico and Canada to avail the goods and services to consumers outside the United States (Davenport, 2007).

Lastly, the health sector should apply the Nardelli’s approach by recognizing and appreciating industrious workers within the sector and motivating them for the excellent performance as well as employing individuals who are acquainted to the climatic and environmental conditions of the area in which the business is located (Davenport, 2007)

In conclusion, Home Deport Company though started as a small retail shop by Bernie Marcus and Arthur Blank has grown into a multinational company that serves a larger market within and outside United States.

Its high level management introduced by Don Ray and latter adopted and improved by Nardelli promoted the company into world class level with unique system of management (Hitt, 2010).

Currently, Home Depot is the largest retail shop in the world with its branches in Canada, China, Mexico and United Kingdom hence able to supply its products to many consumers all over the world (Hitt, 2010).

References

Davenport, T. (2007).Strategic management in the innovation economy: strategy approaches and management. Maryland: Johns Hopkins University.

Hitt, M. (2010).Strategic management: competitiveness and globalization: concepts & cases‎ .New York: Norton and company.

Roush, C. (2009).Inside Home Depot: how one company revolutionized an industry through the relentless growth? Loss Angeles: Prentice Hall.

Introduction

This article discusses an online retailer (eBay.com) and a traditional physical retailer (The Home Depot). In comparing the two, the organizational structure of the retailers will be discussed, the management challenges facing the two reviewed and lastly suggestions are drawn to assist those wishing to embrace the online method of retailing as an alternative retailing method.

Organizational Structure

eBay: The eBay organizational structure places the CEO (John Donahoe) at the top followed by the chairman of the board (Pierre Omidyar) and the directors below them. There are six directors: William Ford, David Moffett, Richard Schlosberg, Thomas Tierney, Marc Andreessen, and Dawn Lepore. There are other officials who assist in the management of the business (eBay, 2011).

The Home Depot: The Home Depot is headed by a Chief Executive Officer who also doubles as the Chairman (Frank Blake). Below the CEO are the Senior Leadership Team and the Board of Directors. The senior leadership team consists of twenty two officials. The Board of Directors is made up of 10 officials (Home Deport, 2011). The organizational structures adopted by the eBay and Home Deport are almost similar.

Management Challenges

There are many of management challenges that both eBay and Home Depot face. Some of these challenges are similar while others are not.

eBay: Regulations of Items sold and Competition

The greatest management challenge that eBay faces is regulating what to be sold through its system. There have been many attempts by clients to sell what is not allowed through the system. Human parts and lottery tickets are not allowed. Selling of wildlife animals is also not allowed in the site.

There are other many items which are illegal and are not allowed either in the site and include firearms, ammunitions among other illegal items. Others items such as trying to sell plots on the moon are also not allowed. The management needs to ensure that there is a thorough scrutiny of the items posted on the site as the items may draw the site into legal tussles with the law makers.

There is a need to ensure that the biddings taking place are only for those items allowed as this will help to reduce the chances of the site crashing. The second management challenge that eBay faces is competition from similar business ventures such as Taobao in China among many others.

Tough competition calls for more funds to be used to promote that site so that it can gain a favorable chance of gaining a wide market. There is a possibility that stringent competition may push some online retailers to engage in unethical strategies such hacking other sites or even accelerating traffic to a site with an aim of crashing it (eBay History, 2011).

Home Deport: Capital Requirement and Competition

Home deport equally faces many challenges. The main challenge which is typical of many traditional retail outlets is the capital required in its expansion. The retail being physical is capital intensive as it requires physical outlets. Acquiring physical outlets needs money and thus the expansion of the retail is tied to availability of capital.

Another challenge that Home Deport faces is tough competition from similar retailers both physical and online. The online retailers are particularly competitive as globalization and the World Wide Web are slowly connecting the globe such that one can get anything that he/she requires from anywhere in the globe. Home Deport also faces competition challenge when physically expanding to regions which are already occupied by other retailers.

Similarities and Differences of the Challenges

In as much as Home Deport and eBay are different, it can be argued that they are similar in some aspects. The two retailers face the same challenge of competition from partners in the same line of operation as well as from physical retailers for eBay and from online retailers for Home Deport.

The capital required to expand Home Deport can also be argued to apply for the case of eBay in the sense that if eBay has to expand it will have to upgrade its systems and site so as to avoid hacking, crashing of the site as well promote the site so as to expand its market. One challenge that is distinct to eBay and may not apply to Home Deport is that of the site being hacked.

Transitioning to Online Retail

Transitioning from a traditional physical retailer to be an online retailer is a current trend. A retailer transitioning from physical to being online should engage in this process in a stepwise manner.

There is a need to assess the resource available. There is a need to develop the best site possible and make it as efficient as possible taking into consideration this is entering into a market place with already established retailers.

There need to consult suppliers and carry out more research into the product specifications. One needs to give the perfect description of a product when selling it online. There is a need to consult ones bank about the arrangement so that one is aware of the expenses involved.

Conclusion

With the advent of the World Wide Web many businesses have adopted the online system of selling goods. Online retailers seem to be on an upward growth while the physical retail stores are absorbing the shock of losing the market to these stores. Both retailers, online and physical, face many similar and different challenges.

Competition is among the biggest challenge that physical retailers face from the online retailers though equally to some extent the online stores face some competition from the physical stores. Physical stores should adopt the online system of selling their goods as it seems to carry the day.

References

eBay. (2011). About eBay. eBay. Retrieved from: https://www.ebayinc.com/

eBay History. (2001). The History of eBay. Bradeis. Retrieved from: https://www.cs.brandeis.edu/~magnus/ief248a/eBay/history.html

Home Deport. (2011). Shop All Departments. The Home Deport. Web.

Introduction

Home Depot, Inc. is one of the largest retail stores that deal with home improvement. The home Depot retail store was first launched in Atlanta, Georgia in 1978, and since then, it has grown and opened branches in various locations. The retail store aims at being the largest retailer of home improvement (Bianchi, 2009). The retailer shop has therefore employed various strategies to obtain the largest market share.

It has worked tirelessly to meet the demands of its customers across all the regions in which it operates. The home Depot retail store employs a corporate strategy that provides it with the right direction towards its success. This paper gives a stringent analysis of the core competencies, corporate structure, corporate culture, and various strategies employed by Home Depot, Inc.

Core competencies of Home Depot, Inc

Home Depot, Inc. is a one-stop shop that provides excellent products and customer services (Bianchi, 2009). The customers’ bargaining power is reduced because of the variety of products and services offered by the retail store.

Products exist in different prices and quantities and customers can choose the products according to their purchasing power. In addition to the high quality products, Home Depot, Inc. has unique strategies that value what customers purchase. It offers discounts for bulk purchases and workshop demonstrations of how to use its products.

For many years, Home Depot, Inc. had been the pacesetter of the required customer care standards for the home improvement industry. Home Depot expresses a lot of professionalism in the Do-It-Yourself (DIY) market.

Home Depot, Inc. has incorporated the latest technologies to upgrade its internal and external environment, and gain a competitive advantage by attracting professional buyers. To outdo the rest of its competitors, Home Depot employs the product differentiation strategy that enables it to supply a wide range of products and services.

Due to its massive size, Home Depot, Inc. enjoys the privileges associated with a large economy of scale. It obtains bulk discounts from the suppliers, and thus, the retail store has been in a position to share the associated advantages to its customers.

Home Depot, Inc. sells its products at considerably low prices. It is also noteworthy that Home Depot, Inc. deals with highly essential products, whether there is a recession or not, because people must buy their products to upgrade and fix their households.

Therefore, while other markets are greatly affected during tough economic conditions, Home Depot, Inc. will always enjoy massive profits because of the immense range of products it sells.

VRIO analysis

In carrying out a VRIO analysis for Home Depot, Inc., there is a need to speculate about the products and services offered at the Home Depot, and identify if they really have a competitive advantage. The VRIO analysis considers the Value, Rarity, Imitation, and Organization.

Value: Home Depot is one of the largest sellers of products and services in home improvement. Its products are highly valued and demanded even in times of difficult economic conditions.

Rarity: Home Depot is one of the many retail stores that deal with home improvement products and services. Its products are not rare as they are available in other home improvement stores. However, its rarity occurs in its price differentiation strategy as well as the esteemed customer care services.

Imitation: Home Depot obtains its products from entrusted suppliers, and its products are always original. While there could be cases of fraud due to imitated products, it is a rare occurrence. Fraudsters can imitate the products, but they cannot fake the seals. Moreover, potential customers will always purchase their products from entrusted retail stores like the Home Depot.

Organization: Home Depot, Inc. has a staunch organization and corporate culture that insists on value, rarity, and originality. It would be very difficult and very expensive for an organization to imitate the products, services, and standard of the Home Depot, Inc.

Business model

Home Depot, Inc. has employed the Environment-Strategy-Structure-Operations (ESSO) business model as shown below.

Environment: Home Depot, Inc.’s management team takes a stringent analysis of the external environment of business to identify the possible threats, as well as business opportunities. Since the competitors present the threats, the retail store has developed various differentiation strategies to have a competitive advantage over its competitors.

Business developers of Home Depot, Inc. have always worked towards ensuring that they identify new business opportunities. Moreover, the marketers have always worked tirelessly to ensure that they obtain new customers, as well as maintain the old ones.

Strategy: After accessing the external environment, Home Depot, Inc.’s managers respond by employing different strategies to respond to the identified loopholes. In case there is a market opportunity, the managers would consider making the necessary arrangements to open up new stores. If there is a customer satisfaction issue, a strategy is employed to address it accordingly.

The Home Depot retailers continuously employ the product and price differentiation strategies to maintain its customers and gain new ones. The home improvement retailer always works towards ensuring that it maintains the government standard requirements to safeguard its reputation.

Structure: Home Depot retail store has a hierarchical organizational structure, where employees have an immediate boss to address their queries. Each of the retail stores has a manager in charge that takes care of all the business activities within the store. Daily reports are sent to the central management team that monitors the progress of the various stores.

Operations: The operations department of Home Depot, Inc. takes care of all the key activities, resources, competitors, suppliers, and most importantly, the customers. The department keeps a record of all activities, identifies areas of weakness, and provides the way forward to address the issues that may arise.

Knowledge of management: The ESSO business model in Home Depot, Inc. works collectively to bring out the required knowledge of management.

Value chain

As discussed, Home Depot, Inc. is a retail store that deals with a wide range of products. The retail store experiences stiff competition from its competitors. However, the supporting quality customer-care service is what adds value to Home Depot products and services. The skilled and knowledgeable employees who are willing to serve customers to their satisfaction add value to the products of Home Depot, Inc.

In addition, Home Depot, Inc. employs the most innovative technologies that enhance the customer care services. The technology helps in reducing the common queues in the purchasing process.

An enhanced self-checkout system further hastens the purchasing process, especially when a customer purchases some enormous shopping. The discounts for bulk purchases and after-sales services are other factors that add value to customers who purchase products at Home Depot, Inc.

Corporate structure

Home Depot, Inc. is one of the largest home improvement retailers, which has many stores. To enable the effective management of the stores, Home Depot CEO has employed three main structures, the simple, multidivisional, and functional structures (Bianchi, 2009). The simple structure operates in the small business units, which has a company head and various employees.

The various employees take orders from the company manager who makes most of the decisions. The small businesses are located across several divisions and their heads report to the multidivisional structure managers. The multidivisional corporate officers monitor and compare the performance of the small business units.

Based on reports from the simple structure managers, the multidivisional corporate officers advise the functional managers accordingly. The functional structure of Home Depot, Inc. is located in the head office. The functional structure comprises of a central CEO, small corporate staff and various organizational managers as shown in the chart below.

Corporate culture

The culture that guides Home Depot, Inc. encourages its employees to have the passion to serve customers with the utmost respect (Bianchi, 2009). Home Depot culture insists on the following aspects.

1. Excellent customer care services: The employees are obliged to offer their customers with excellent value and knowledge of the products and services offered at the Home Depot.
2. Social Corporate Responsibility (CSR): Home Depot, Inc. strives to take care of the environment and the people in it. Home Depot contributes to social projects that help in the growth and development of the community.
3. Building strong relationships with customers, suppliers, and all stakeholders based on honesty, respect, and integrity.
4. Doing the right thing and accepting responsibility of all their actions.
5. Appreciating the time, talent, and energy invested by employees. Home Depot, Inc. does this by giving incentives and diversified employee benefits.

Corporate resource

Home Depot, Inc. has seen its resources transform into capabilities. The various efforts in marketing, incorporation of technology, research, and development are some of the factors that have resulted in the growing capital of Home Depot, Inc. over the years. The various corporate resource strategies are discussed below.

Marketing: Home Depot, Inc. has invested heavily in marketing. The heavy investments in advertisements have enabled the retail shop to gain a lot of popularity. This has enabled the company to obtain new customers as well as maintain the loyalty of the old customers.

Finance: Home Depot, Inc. has maintained a good relationship with all its shareholders who help in financing the whole project. Over the years, Home Depot, Inc. has maintained growing profit inventories, and this factor has encouraged the shareholders to freely buy shares and provide funds whenever the business needs to expand.

Research and development: Research plays a very great role in enabling a business to know exactly where it heads. Home Depot, Inc. has been able to identify its main competitors through research and identified the way forward to deal with the competition (Bianchi, 2009). Through research, Home Depot, Inc. identified its strengths and weakness, and employed various strategies to improve on its weak areas.

Operations and logistics: Home Depot employs logistics to ensure that there is a strong internal network structure among the employees. Moreover, the employees are entitled to considerably high wages and benefits. The satisfied employees deliver the best services that add value to Home Depot, Inc. products and services.

Human resource: The human resource department ensures that employees are satisfied with the positions they hold in the organization. Recruitment is done whenever a new store opens, and the existing employees are promoted depending on their experience level. Everything in the human resource department is done openly to everybody’s satisfaction.

Employees who qualify to be on the management team are highly skilled and experienced because they are chosen on merit. The board of directors comprises of very competent individuals who guide the company towards the right direction. The human resource department works exclusively to bring utmost value to its employees by giving them decent wages, investing in their training, and helping their families.

Information system: One of the greatest features that place Home Depot, Inc. at its high standards is the highly upgraded information system. Home Depot, Inc. has an Electronic Data Interchange (EDI) technology that enables the employees to serve thousands of customers within the shortest time possible. The highly esteemed technologies in Home Depot, Inc. enable the retail store to track inventory records, keep accuracy, and prevent fraud cases.

IFAS table

Home Depot, Inc. keeps a stringent analysis of its internal factors as shown in the table below.

From the IFAS table, it is noteworthy that Home Depot Inc. responds to its internal factors accordingly. The human resource department has done a great job in ensuring there is employee satisfaction. However, more approaches are needed to enhance further employee satisfaction.

Since Home Depot, Inc. is one of the leading retailers of home improvements, it ought to invest heavily in Research and Development (R&D). The IFAS table indicates that Home Depot Inc. doubled the amount spent on R&D, and therefore, the amount should triple in the subsequent year.

Training has the least score as indicated in the IFAS table. Home Depot, Inc. needs to recruit new staff and train the existing staff to ensure that the staff offers high quality services to the customers.

Conclusion

From the discussions, it is evident that Home Depot is one of the best one-stop shops. The retail store not only provides shoppers with quality products, but also value added customer care services. Moreover, Home Depot Inc. is one of the best dream employers that one can ever dream of, as it takes utmost care of the needs and the welfare of its employees.

The management and all the stakeholders have done such a recommendable job, which has seen Home Depot Inc. grow up from a small retail shop in the 1978 to one of the biggest retailers of home improvement. The future of Home Depot is bright, and all businesspersons who are thinking of establishing retail stores should borrow ideas from Home Depot, Inc.’s management team.

Reference

Bianchi, C. (2009). Home Depot in Chile: Case study. Journal of Business Research, 59(1), 391-393.

Corporate culture

The culture that guides Home Depot, Inc. encourages its employees to have the passion to serve customers with utmost value (Bianchi, 2009). Home depot has employed a strategy in which employees “live their values every day.” The values act as a guide to Home Depot, Inc.’s approximately 300,000 associates.

The associates have to work on the “orange-blooded” culture that insists on serving customers with utmost respect, passion, and total inclusion (Roush, 2009). These values are adopted within the organization, in the outside world, and into all the life aspects of the employees. Eight core values guide the home depot employees as listed below.

Excellent customer care services: Like any other business, the customers are the most important stakeholders of any business. At the Home Depot, the employees are obliged to offer their customers with excellent value and knowledge of the products and services they offer. Common customer-care services exist in every retail store; however, Home Depot, Inc.’s employees go an extra mile.

They work hard to ensure they offer incomparable value to their services. The employees advice their customers of the usage of different products to ensure they obtain maximum benefits from the products they purchase.

Building strong relationships: At the home depot, all stakeholders, customers, associates, shareholders, the suppliers, and the entire community are treated with utmost integrity. The Home Depot, Inc.’s employees ensure that they stick on nothing but the truth in their deals with the different stakeholders. This stand creates trust and thus, the relationship between The Home Depot, Inc., and its stakeholders strengthens day by day.

Social Corporate Responsibility (CSR): Apparently, the employees, customers, suppliers and all other stakeholders belong to the surrounding community. Home depot strives to ensure it gives back to the community, and thus, it strives to take care of the environment and the people in it. Home Depot contributes to social projects that help in the growth and development of the community.

The Home Depot Foundation coordinates all the community involvement procedures (The home depot foundation, 2009). A volunteer force invests their time, talent, resources, and hands-on services to meet the needs of the community.

Building a favorable business environment: The Home Depot, Inc. clearly understands that the business associates are the key people that contribute to the success of their business. Therefore, the Home Depot, Inc. ensures that all the associates feel valued. The organization ensures that all its stakeholders access the opportunities for their growth and development.

Home Depot, Inc. ensures that it leaves a reasonable profit margin for their suppliers. In case there is a conflict between the Home Depot, Inc. and its associates, the matter is handled in a professional manner, and this leads to satisfaction of all the involved business associates. Further, the organization helps all its associates to manage and save their money for the rainy days.

Some of the programs that Home Depot, Inc. offers to build financial security for their employees include the 401(k), the Employee Stock Purchase Plan (ESPP), the spending accounts, health saving accounts, the direct deposit accounts, and the credit unions.

Doing the right thing: The activities at the stores are structured in a way to ensure that Home Depot, Inc. does the right thing; accepting responsibility of all their actions. The business environment ensures there is mutual benefit for all involved stakeholders, and all the business associates seek to diversify and catch up with the evolving world.

Home Depot, Inc. values diversity as it paves the way to serve the increasing number of customers, suppliers, and all associates, and it is the only way to do the right thing. Moreover, the Home Depot, Inc. does some very extraordinary things that are just right.

Home Depot provides fulltime paid athlete jobs, where, the company only benefits during the athlete’s training for the Olympics. Interestingly, Home Depot, Inc. also offers aerobics trainings, dieting classes, and classes to help people to quit smoking.

Appreciating employees: It is noteworthy that Home Depot, Inc.’s employees invest their time, talent, and energy to the success of the company. Therefore, Home Depot, Inc. has the obligation to appreciate its employees. The company does this by giving incentives and diversified employee benefits. The Home Depot, Inc. offers all the company associates with a peaceful mind as they serve the company.

Firstly, the health of all the company’s associates is fully insured. Unlike other companies that will restrict the medical benefits, the Home Depot, Inc. offers full medical cover, dental and vision covers for full-time associates. The company goes ahead to offer the family with the needed protection in case of illnesses, accidents that may cause disability or even death.

Generally, Home Depot, Inc. offers a life insurance, accidental death and dismemberment Insurance, indemnity insurance, critical illness protection plan, homeowners insurance and even the veterinary pet insurance.

Home depot employees are assured of full time payments during off days, vacations, holidays, personal leaves, sick leaves, and during the bereavement leaves. This insurance covers, work and life benefits enables the Home Depot, Inc.’s employees to offer the best of services without all their might without any fear.

Creating shareholder value: Like any other business, shareholders are the most important people as they finance the entire business. The best thing that a business can do is appreciate and ensure the shareholders obtain value for their investment. The company accesses every investment opportunity to ensure they invest in worthwhile opportunities.

The managers ensure that they invest all the company’s finances wisely, and thus obtain enough profits. The profits are divided wisely to serve in re-investing, servicing the daily expenses, paying employees, and giving reasonable dividends to the company shareholders.

Entrepreneurial spirit: The Home Depot, Inc. encourages all its associates to adopt and adapt creative ideas from those companies that offer similar products and services. The associates are always urged to know of the new developments that have taken place in the world.

The new ideas enhance creativity and innovation of ideas of how to serve customers for the betterment of the business. Every stakeholder at the Home Depot possesses the entrepreneurial spirit by default because of the influence of the company-working environment.

Corporate resource

Home Depot, Inc. has seen its resources transform into capabilities. The various efforts in marketing, incorporation of technology, research, and development are some of the factors that have resulted in the growing capital of Home Depot, Inc. over the years. The various corporate resource strategies are discussed below.

Marketing: Home Depot, Inc. has invested heavily in marketing. The heavy investments in advertisements have enabled the retail shop to gain a lot of popularity. It is worth noting that Home Depot, Inc. expresses expertise in the customer care services as well as the DIY consumer.

Home Depot, Inc. achieves this marketing strategy by letting the most qualified and knowledgeable employees to provide the services. These approaches, plus the highly quality products and the considerably low prices has enabled the company to obtain new customers and maintain the loyalty of the old customers.

Finance: Home Depot, Inc. has maintained a good relationship with all its shareholders who help in financing the whole project. Over the years, Home Depot, Inc. has maintained growing profit inventories, and this factor has encouraged the shareholders to freely buy shares and provide funds whenever the business needs to expand.

The finance and top management departments have worked tirelessly to ensure that they always bring worthwhile financial figures on the table. The two departments have always made the necessary adjustments in the financial figures to ensure the stock prices are attractive to the investors.

Research and development: Research plays a very great role in enabling a business to know exactly where it heads. Home Depot, Inc. has been able to identify its main competitors through research, and it has identified the way forward to deal with the competition (Bianchi, 2009). Through research, Home Depot, Inc. identified its strengths and weakness, and employed various strategies to improve on its weak areas.

Feasibility studies enable Home Depot, Inc. to identify business opportunities. The company is able to put up new stores in strategic areas to meet the demand of the customers as well as ensure it makes maximum benefits out of the new stores.

Currently, Home Depot, Inc. has grown, and it possesses more than 1,500 stores across Mexico and Canada. These developments, expansions, adoption of new technologies, and the increase of the Home Depot stores results from the efforts employed in research and development.

Logistics issues: Home Depot employs logistics to ensure that there is a strong internal network structure among the employees. Moreover, the employees are entitled to considerably high wages and benefits. The satisfied employees deliver the best services that add value to Home Depot, Inc. products and services (Bailey, 2001).

Further, home depot employs strategies that place the company at a better competitive advantage against its competitors. Home Depot has developed direct alliances with leading manufacturers. This strategy has enabled Home Depot, Inc. to obtain its products cheaply and in an efficient manner. Home Depot, Inc.’s most interesting strategy is the one that seeks to capture all classes of customers.

The company has standard format stores and small shops that are fully equipped with Villager’s Hardware brands. These stores are able to capture the customers who are interested in buying common items instead of a huge range of items.

Operation issues: Shelf stocking is an operation that takes place frequently in a busy store like Home Depot, Inc. The Home Depot has created a SPI (Service Performance Improvement) program to combat the inconveniences created by the exercise. To make the shopping experience more convenient, the employees re-stock the shelves after the store hours.

This operation helps in reducing messes in the aisle; therefore, customers are able to move freely from one shelf to another without much difficulty. To ease their operations further, Home Depot, Inc. has opened new transit facilities and import distribution centers that have played a great role in facilitating the movement of products.

The enhanced path of the distribution of Home Depot, Inc. products ensures the availability of products wherever and whenever wanted. This very important aspect enables the business to obtain trust and loyalty from the customers. Customers are always sure that they will obtain whatever they desire to purchase at any Home Depot, Inc. store at a considerably cheap price.

Another very important operation that has placed Home Depot, Inc. at a very high position above its competitors is the self-checkout system (“Dramatic change at Home Depot,” 2002).

The system allows consumer to save much time as they self-check themselves without necessarily having to wait in the queues to be served. The self-check registers have enabled the customers to have self-empowerment and some sense of self-control.

Human resource: The human resource department ensures that employees are satisfied with the positions they hold in the organization. Recruitment is done whenever a new store opens, and the existing employees are promoted depending on their experience level. Everything in the human resource department is done openly to everybody’s satisfaction.

Employees who qualify to be on the management team are highly skilled and experienced because they are chosen on merit. The board of directors comprises of very competent individuals who guide the company towards the right direction. The human resource department works exclusively to bring utmost value to its employees by giving them decent wages, investing in their training, and helping their families.

Information system: One of the greatest features that place Home Depot, Inc. at its high standards is the highly upgraded information system. Home Depot, Inc. has an Electronic Data Interchange (EDI) technology that enables the employees to serve thousands of customers within the shortest time possible.

The highly esteemed technologies in Home Depot, Inc. enable the retail store to track inventory records, keep accuracy, and prevent fraud cases. The company’s main aim is implementing the latest technology in all their stores.

Research and development have played a great role in constructing improved technological infrastructure (Bianchi, 2009). Overall, the information system at the Home Depot has condensed the company’s operations through the implantation of a digital business system.

IFAS table

Home Depot, Inc. keeps a stringent analysis of its internal factors as shown in the table below.

From the IFAS table, it is noteworthy that Home Depot Inc. responds to its internal factors accordingly. The human resource department has done a great job in ensuring there is employee satisfaction. However, more approaches are needed to enhance further employee satisfaction. Since Home Depot, Inc. is one of the leading retailers of home improvements, it ought to invest heavily in Research and Development (R&D).

The IFAS table indicates that Home Depot Inc. doubled the amount spent on R&D, and therefore, the amount should triple in the subsequent year. Training has the least score as indicated in the IFAS table. Home Depot, Inc. needs to recruit new staff and train the existing staff to ensure that the staff offers high quality services to the customers.

References

Bailey, M. (2001). Business & Industry: The Home Depot. Atlanta, GA: Georgia College and State University.

Bianchi, C. (2009). Home Depot in Chile: Case study. Journal of Business Research, 59(1), 391-393.

Dramatic change at Home Depot: success to further success: How Nardelli sustained a culture change to keep the giant growing. (2002). Strategic Direction, 22(9), 8-10.

Roush, C. (2009). Inside Home Depot. New York: McGraw Hill.

The home depot foundation. (2009). Habitat for humanity international and the home depot foundation announce national expansion of ‘partners in sustainable building. Science Letter, 23 (5), 3349.

Introduction

The Home Depot is a famous American retail company that offers a variety of home improvement services and products. There are a number of stores in America, and several representatives in such countries like Canada and Mexico.

The company introduces itself as a powerful marketing example on how to offer, develop, and implement its services within a short period of time. The current paper contains several ideas on how to implement a strategic plan and consider the company’s weak and strong aspects in regards to the existing conditions and opportunities.

Implementation Plan

The development of an effective implementation plan is one of the most important tasks that should be considered at first. It is a kind of guide according to which The Home Depot can realize the strategies and ideas to improve and develop their services and products (Bryson, 2011). In the current paper, the idea to expand the company’s boundaries will be offered. The Home Depot has already proved its quality and gained a good reputation.

Now, it is high time to introduce its slogan “More saving. More doing” (The Home Depot, 2015) to some European countries. The company was founded by Bernie Marcus and Arthur Blank in the middle of 1978. The idea to provide people with the possibilities to repair their homes, make their own construction ideas come true, and rely on their own knowledge and abilities turned out to be possible with the help of considerable investments and financial support (“Our history: The beginning”, 2015).

The analysis of the company’s latest contributions and achievements shows that The Home Depot is able to promote its services to Europe and make more people able to do home improvements on their own. The implementation plan should clearly define the goals and tactics and pay attention to the possible milestones and challenges in order to achieve success and avoid the risks.

Objectives

The main objectives of the offered implementation plan are as follows:

1. Investigate the current European market in terms of available retailing services;
2. Compare the prices set by the company and those, expected from The Home Depot by the potential customers.
3. Consider the possible entrance barrier because of the existing European giants like the German Obi and the British Kingfisher.
4. Think about effective advertising and the abilities for the Europeans to try the American quality and support.
5. Introduce the services and products in the way it can be possible to develop real store in several European cities (still, the cities should not be the local centers or capitals as they are already full of various options; it is better to focus on some regions, where not much options are available, but the interest of the locals is high indeed).

Functional Tactics

There are many interesting steps that can be used in order to prove the necessity to spread The Home Depot services in Europe. In the current strategic management plan, it is necessary to touch upon four main aspects: the role of the customers, the effects of the competitors, the possibilities of the suppliers, and the ideas of the company’s employees.

1. The company’s employees have to be interested in the idea to develop the services and offer the products in Europe. They have to be stimulated to introduce their own unique ideas with the possibility to work in new regions and get chances to visit new countries.
2. The Home Depot has to establish appropriate relations with several delivery companies. It is possible to use the services of the well-known FedEx or DHL. There are many companies like UPS that are eager to develop their services in new regions. Contracts with such organizations should not be too expensive but effective indeed.
3. Customers have to be aware of the opportunities with The Home Depot. As a rule, people want to use the services of foreign companies to check the quality and benefit with the traditions inherent to different countries. The Home Depot should focus on promoting its values such as treating people well, doing the right things, and giving back to the communities (“The Home Depot values”, 2015).
4. Competitors may not be satisfied with a new company entering the market they have already been involved in. Still, it is necessary to understand that the presence of the competitors is one of the stimuli to improve the services and think about the customers as the main priority.

Action Items

In addition to the well-developed goals and tactics, it is important to think about the real actions and steps to be taken to achieve everything mentioned before. The beginning stage of the plan should not be overwhelmed with the activities. Each step should be properly weighted and analyzed. The following example can be followed:

1. The company should create a team of managers, who will be able to investigate the current home improvement retail and develop several analytical operations to identify a group of people, who can work abroad.
2. Consider the possible budget and the needs of the company to make sure the services will be known abroad and proved as worthwhile.
3. Define positive and negative aspects of the entering several new countries’ marketing.
4. Underline the risks that can take place in the chosen strategic management plan and think about the actions that should be taken to avoid the risks or achieve minimum challenges.
5. Start communicating with the delivery companies to discuss the conditions under which the chosen by the customers’ products can be delivered to the customers within the shortest possible time.

Milestones and a Deadline

There are several stages of the project that should be discussed in the paper:

1. One week is for the organization of a specialized team of managers to start developing the idea.
2. One month is for training employees to work with foreign customers.
3. One month is for the analysis of the foreign retail market.
4. One month is for the development of the special online services that can be available to the customers from the European countries.
5. Two months is for promoting marketing services and making the locals aware of The Home Depot. (Then, the same or even new advertising ideas should be developed during the implementation process and the next period until the company closes the campaign or opens a new separate department).
6. One month is for the analysis of the implemented ideas.

In general, the chosen strategy should be completely implemented and analyzed in 6 months.

Tasks and Task Ownership

Task ownership means the definition of the employees, who take responsibility for the work done during the project (Parnell, 2013). As a rule, there should be at least two responsible people: one is to control the process, and another is to follow how the rest completes the duties.

It is better to choose one person from the company, who knows and understands the company’s values and is able to use the already achieved goals for developing some new prospects. Another person should have the experience in promoting the company’s services abroad. Besides, there should be a team of web designers and programmers, who can control all online activities of the company and make sure that the customers abroad can reach the representatives of the company in the USA.

By the way, The Home Depot has already had the experience of promoting its services and products in Canada and Mexico. It is possible to rely on the steps taken before.

Resource Allocation

Resource allocation is the part of the project within the frames of which it is necessary to think about the methods of services’ and products’ distribution (Bryson, 2011). The most effective and interesting to the customers’ types are a lottery (customers are able to get some products for free as soon as they promote The Home Depot and use its services in their native countries).

Allocation by need like the development of special grants and additional opportunities can be also offered. It helps to promote fair and true evaluation of the work done and appreciate the choice of the customers and the efforts of the employees.

Organizational Change Management Strategies

The main change that has to be expected is the development of a new department that should aim at learning the cultural preferences of the European countries that are chosen and training employees to meet the needs and interests of foreign customers. This kind of strategy should be properly developed.

It is necessary to (1) check the readiness of the team to enter a new market, (2) make sure the intentions of the company do not contradict the already established values, and (3) think about the awards to the people, who have to work under new conditions so that they cannot feel frustrated or forced to follow a new order.

Key Success Factors, Budget, Financials

Key success factors for The Home Depot are a new base of customers and the possibilities to open new stores in the European countries.

Budget should not be too high: annual salary for a new team of managers should be equal to other members of the similar departments; $500,000 may be spent on advertising, promotion of the services, and awards for potential customers; $50,000 should be saved for the development of the relations with different suppliers and delivery companies.

In general, it is expected that a small part of the company’s assets and liabilities will be spent on the development of this new strategy because the idea is more virtual and requires people’s participation, but not some special physical investments. As soon as online shopping is approved and justified, a new strategy can be developed to create several real stores in several countries.

Risk Management Plan

There are two main risks that can take place in this strategy implementation:

1. Too serious competition from the already existing companies;
2. Too weak advertising program so that not many people learn about The Home Depot and the opportunities it offers.

These two risks may be managed by means of:

1. Properly trained team of managers;
2. Enough attention to the advertising programs;
3. A thorough analysis of the market far before the strategy is implemented.

References

Bryson, J.M. (2011). Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. San Francisco, CA: John Willey & Sons.

“Our history: The beginning.” (2015). The Home Depot. Retrieved from <https://corporate.homedepot.com/about>

Parnell, J.A. (2013). Strategic management: Theory and practice. Thousand Oaks, CA: SAGE Publications.

The Home Depot. (2011). Retrieved from <https://corporate.homedepot.com/>

“The Home Depot values.” (2015). The Home Depot. Retrieved from <https://corporate.homedepot.com/about>