The Home Depot was built-in on June 29, 1978, as a home improvement retailer. The Home Depot stores sells a collection of; home improvement products, building materials, and lawn and garden products. It is recognized, for its best customer care services; provides the customers with the knowledge of its products, and also directs customers through projects, such as, handling a tool, changing a valve, and laying tiles. The Home Depot stores are roughly 104,000 square feet of enclosed space, and approximately 24,000 additional square feet of outside garden area. The Home Depot stores have three categories of customers that they serve; do-it-yourself customers, do-it-for-me customers, and professional customers. It has 2,269 stores, in the United States and the neighboring countries (Hill, Jones, & Schilling, 2014). The Home Depot has established and upholds a global sourcing program to acquire products directly from manufactures around the world. In addition to its sourcing operations at its Store Support Center, the Company has also maintained seven other sourcing offices, located; in Shanghai, Shenzhen, Taipei, Gurgaon, Monterrey, Mexico and Toronto.
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It has also implemented other programs like, the Eco Options program, through which it has created product categories, that permits consumers to identify environment friendly product, stocked in its stores (Hill, Jones, & Schilling, 2014). This program has over 9,000 products that meet various specifications; water conservation, for energy efficiency, clean air, sustainable forestry and healthy home. The products sold through this program are; dish washers, ENERGY STAR refrigerators, Eco-smart LED light bulbs, compact fluorescent light bulbs, water heaters, programmable thermostats, and other products. Home depot stock is publicly traded on the New York Stock Exchange; it is under the trading symbol “HD”, and is also included in the Dow Jones Industrial Average and the Standard & Poor’s 500 Index. It has traded on the NYSE since 1984. The company also has a Direct the Stock Purchase Plan; is a low-cost, suitable way for you to purchase shares of the common stock of The Home Depot, Inc. This plan is intended for individual investors, who avoid long-term purchase, since of least amount brokerage fees.
The business-level Strategies for Home Depot
Business-level strategies are the incorporated and harmonized set of commitments and procedures company implements, in order to achieve a competitive advantage by developing core competencies in specific product markets. The Home Depot Company uses the three-legged stool as its strategic frame work. These strategic frameworks have impacted the company and also the sales of the products (Bianchi, & Arnold, 2004). The three legged stool has always been the Company’s lasting strategic plan; changing the in customers’ expectations, changing the competitive outline, and changing the business model. The Company binds these together through interrelated retail with the aim of strengthening and improving each strategy.
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Given that, the Home Depot is the world’s largest home improvement retailer, and it is amongst the ten largest retailers in the United States. The Home Depot has set its business-level strategy as to present; a wide collection of first-class products at low prices, and offer outstanding customer service through highly-skilled and conversant employees. The Company has a custom that is an important strong point for the company. It gives emphasis to decentralization of the management, and promotes industrial innovation, and sky scraping levels of; team work, commitment, and zeal from its employees. In the middle of exceptional growth, replicating stores, the necessity of efficient assistants, and store managers, who are able to train the store attendants, is necessary (Hill, Jones, & Schilling, 2014). For the Home Depot to achieve its intended strategy, it incorporated managerial skills, and trainings, to provide skills to their managers, in order to improve its vital resource. The aim of these programs, is to assist managers become more effectual leaders, through building awareness and insights in three major areas; trust, teamwork, and communication skills. The evidence shows, that these business-level strategy will work in favor of the Home Depot Company.
Analyze the – corporate level strategies for the Home Depot Company
Corporate level strategy is apprehensive with the strategic decisions a company makes, that affect the entire organization; financial performance, mergers and acquisitions, human resource management and the allocation of resources are considered part of corporate level strategy. The Home Depot Company, endeavor to stay at the top in the competition by, building numerous, huge stores in type profitable locations, and employ knowledgeable staff that can serve customers efficiently. The company employs a state of the art reordering system that upholds a satisfactorily high rate of inventory turns (Johnson, Scholes & Whittington, 2008). The Company provides high quality products that permits, incredible buying prices with the manufacturers, and maintains low prices for customers. Ever since the formation of the Home Depot in 1978, it has proved to be the largest retailer, and the most profitable in the building and construction industry. A well outlined corporate-level strategy will ensure that all stores are corporately owned, and the company continues to expand.
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The Home Depot Company has stood out in, flexibility, adaptability, and readiness to attempt new plans such as operating 24 hours, in order to target new markets. According to Ben Sharon of Value Line, Home Depot’s aptitude to accept different characteristics among the regions and markets, maintains the company on top in the building industry (Bianchi, & Arnold, S.2004).It is the amalgamation of these plans that is propelling, the Home Depot Company to the front position of the home building supply industry. On the flip side, tough competition, and market change are unavoidable. Hence the company has to consistently re-evaluate the corporate-level strategy. Corporate Strategy is primarily about the choice of direction for a firm, the Home Depot’s Strategy is, to expand the company; this is a corporate strategy of growth. In the growth strategy, a horizontal growth was selected, so as to improve the performance of the company’s Core Competencies and to spread financial risk. Horizontal Growth can is achieved by intensifying the company’s products into other geographic locations, or by increasing the quantity of products and services offered in the market. The horizontal growth strategies have been implemented for years. The Home Depot Company has realized that, in order fo
r them to beat competition; the number of stores and store locations would be critical. This strategy has been effective to the company, and as a result, other companies are now emulating the strategy.
Analyze the competitive environment to determine the corporation’s most significant competitor.
Even though, the Home Depot has had marvelous success in the home improvement industry, it should not to ride on its glory, or be at their comfort zones. Lowes and Menards are ferocious competitors, and the fast velocity changes in market trends cannot accommodate any errors and mistakes .For this company not to close down its doors, it should keep on establishing, and implementing successful strategies that will ensure they stay ahead of its competitors. The strategies implemented by the Home Depot Company, have been the most effective, and successful plans, that any company can implement (Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer, & Wood, 1997).
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As competition in the building and construction industry continue to e tough, it is very essential for the Home Depot Company to analyze, its internal strength and weakness, as well as its, external opportunities and threats. Competition sits high on any retailer’s list of worries. But Home Depot’s biggest risk is its reliance on a steady housing market since it is completely outside of the company’s control. The management has reported that the performance of the company depends vitally on the stability of the housing; home improvement markets, and residential constructions.
The difference between slow-cycle and fast-cycle markets
Market dependence is the extent to which a company’s profits are derived from a particular market. Companies that are concentrated in an industry, in which, they have competition plans to respond to their competitors (Mauboussin, & Bartholdson, 2002). While competitive rivalry concerns the continuing measures and responses between a company and its competitors for a beneficial market position, competitive dynamics concerns the ongoing actions and responses taking place among all companies competing within a market for advantageous positions. Market distinctiveness influences the set of actions and responses a company take while competing in a given market as well as the sustainability of the company’s competitive recompense. In slow-cycle markets, where competitive advantages can be maintained, competitive dynamics permits companies to take actions and responses that are intended to protect, maintain, and extend their proprietary advantages. In fast-cycle markets, competition is frantic as companies concentrate on mounting a sequence of temporary competitive advantages. This importance is necessary because company’s advantages in fast-cycle markets are not proprietary, and are subject to hasty and comparatively low-cost imitation. Innovation is imperative to competitive success in the two markets. Companies should be aware that the set of competitive actions and responses taken by all companies differs with the type of market.
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