...Control Mechanisms for Home Depot Jaclyn Fix, Kelly Gomez, William Miller, and Nicholas Johnston MGT/330 November 14, 2011 Bassam Asfoor Control Mechanisms for Home Depot The four functions of management are planning, organizing, leading, and controlling (Bateman & Snell, 2009). The four types of controls used by Home Depot significantly affect the four functions of management within the organization. Setting performance standards is a part of the planning process while measuring them is part of the control function. Managing performance standards enables the company to have more visibility on what works and what does not in both policy and product. Rectifying problems also plays into each of the functions of management, largely in leading. Home Depot’s corporate and executive levels must monitor the company and identify any potential problems or issues that need to be addressed. Four Types of Control Mechanisms The four types of control mechanisms used for The Home Depot are setting performance standards, measure performance; compare performance against the standards, and taking actions to correct deficiency. The depot sets performance standards during orientation, the standards given are what the company expects from every individual who works for the company. There are also standards given to each individual according to what department he or she works in. For example employees are sales associates, sales specialists, or operational...
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...CONFORMING LETTER Home Depot Inc. Dear Home Depot Inc. Management, As a partner of KNAM LLC, it is my pleasure to present you with the results of our initial review. Included with these results is our assessment of Home Depot Inc.’s performance is our proposition of areas we’d like to review further to determine improvements, efficiency, functionality, and health of your organization. Background Your organization’s core service is in the DIY home improvement market. You sell goods that consumers need for home improvement as well as advice on said projects, contracting services, lawn and garden, and appliances and tools. Your organization was founded in 1978 with the purpose of providing DIY one-stop shopping. Since inception, Home Depot Inc. has grown to become a multinational company with foundations strongly in the United States with roots in the Canadian, Mexican, and Chinese markets. Shortly after inception, Home Depot Inc. enlisted on NASDAQ and the NYSE. Your company has seen considerable growth in its main business as well as developments in subsidiary businesses and services. Home Depot Inc. has become one of the fastest growing retailers in America and as such, you would like to review the operations of your organization to determine areas of further growth and areas that may need to be leaner. Objectives of the Operational Review As a result of our initial review and interviews with your executive management...
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...HOME DEPOT Home Depot is the world’s largest home improvement chain and second largest retailer after Wal-Mart. The giant home improvement retailer leads the DIY industry that is followed by Lowe’s. Stores are located in the U.S, Mexico and Canada. Is it necessary for home depot to emphasize both the DIY and contractor markets to build and maintain economies of scale? Home depot continues to focus on the DIY customer. Meanwhile, contractor sales comprise one-third of the total sales. It is necessary to pay attention both markets since there are some people, who don’t have time to do the work themselves. These people want a service that will do all the installation for them. Providing this service will lead the company to differentiate themselves among their competitors. Moreover, it will maintain a strong cash flow by selling high volume of units to the contractors. However, the service provided by the contractors must fulfill customer satisfaction. Therefore, Home Depot should also provide information to the contractors about the products and their installations. These key points will build and maintain economies of scale. Is competitive pressure from Lowe’s causing Home Depot to modify its competitive strategy? Competitive pressure by Lowe’s has caused Home Depot to aggressively upgrade its old stores. Lowe’s has a store layout strategy that focuses on women customers. They see women as a decision maker of a renovation of the houses. Hence, Home Depot has to modify...
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...of the company G financials, comparing Fiscal year 11and Fiscal year 12. I have chosen to evaluate the financials through thirteen (13) key financial Ratios. Below, you will find all thirteen (13) Ratios along with an explanation of those ratios, an evaluation and justification of all thirteen (13) ratios as a strength, weakness or satisfactory condition, and I will compare (where possible) these ratios to available information from other companies within the home center industry. Any and all financial information of Home Depot, Lowes and Orchard Supply Hardware Stores was retrieved from either www.nasdaq.com, or www.morningstar.com and I did use data sets from their fiscal year 2012 numbers. The evaluation of all thirteen (13) ratios is as follows. Current Ratio: For fiscal year 12 the current ratio is 1.77, and in year 11 it was 1.86. In my opinion, this ratio is a weakness, and should be watched as it shows a downward trend from the previous fiscal year. While any ratio over one represents that the company could repay their debt if required to, it is not as stringent of an indicator as the acid test ratio. It does take into account inventory which is up approximately 32 percent, and even with the increase in inventory and an increase in net sales, gross profit and Net Earnings, the current ratio shows a decrease year over year. In comparison with comparable companies such as Home Depot and Lowes, Company G shows a slightly higher Current Ratio which is the lone positive in...
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...Statements Part 1 Accounting 497 Financial Statements Part 1 Financial statements provide investors, creditors, and employees with important information related to a company’s overall performance. Public traded companies are required by the Securities and Exchange Commission to release financial statements on quarterly and annual basis. The three main statements included in the annual report include the consolidated statement of earnings, balance sheet, and statement of cash flows. This paper will analyze Home Depot, Inc. 2008 annual report. The Home Depot, Inc. The Home Depot is a public “do-it yourself” home improvement and construction retailer. The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank (depot, 2015). The company’s website states that “today The Home Depot is the world’s largest home improvement specialty retailer, with more than 2,200 retail store in the United States (including Puerto Rico and the U.S. Virgin Islands), Canada, and Mexico” (depot, 2015). The Consolidated Statements of Earnings The consolidated statement of earnings or commonly known as the income statement is a financial statement that measures a company’s financial position over a specific accounting period. The statement includes: revenues, expenses, gains and losses. The fundamental equation used to generate the income statement is Revenues-Expenses=Profit or Loss. A consolidated statement of earnings combines all major expense accounts into broad categories to provide...
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...In our efforts to choose two of the top five companies in Consumer, Cyclical (IYC) we have chosen to evaluate Wal-Mart (WMT) which was ranked first and Home Depot (HD) ranked third in Consumer, Cyclical. You have asked our team to follow six steps based on our selection of WMT, HD, and IYC for a complete history of this sector. There appears to be many observations which contain Walmart having a large effect on the entire sector thus creating the entire market to shift. However, Home Depot has very similar movements but not as severe as Wal-Mart The market data for Wal-Mart and Home Depot is based on the information from January 31, 2003 which includes closing price, number of shares outstanding, and market capitalization. This information is tabulated on the following table ‘Market Data’. The following information is based on the most recent quarterly reports given by Wal-Mart (October 31, 2002) and Home Depot (November 3, 2002). Bond’s outstanding is shown in terms of long term debt of bond’s outstanding, this has summed the total issue of bond’s that have been given out by Wal-Mart ($18,732,000,000 ) and Home Depot ($1,250,000,000 ). The debt to equity ratio, return on assets and equity are shown on the market data table. The annual dividend per share for Wal-Mart and Home Depot is $0.08 and $0.05.The following page consists of the closing prices and trading volume from November 1, 2002 to January 31, 2003. The information is for the sector Consumer, Cyclical (IYC)...
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...Founded in 1978, The Home Depot, Inc. is the world's largest home improvement specialty retailer with fiscal 2011 retail sales of $70.4 billion and earnings of $3.9 billion. The Home Depot has more than 2,200 retail stores in the United States (including Puerto Rico and the U.S. Virgin Islands and the territory of Guam), Canada, Mexico and China. Therefore, Home Depot main focus of the annual report for 2012 will much higher than 2011. The main focus for 2012 annual report on the financial side is the statement earnings. This includes the Net Sales which includes the cost of sales. Gross Profits are the operating expenses, selling, general administrative, depreciation and amortization it also includes the total of operating expenses. Another focus for Home Depot includes interest as well as other (income) expenses. The income expense also includes interest and investment income. The least annual focus is the earnings from continuing operations before the provision for income taxes. This report only entitles the provision for income taxes. As each selected sales data, and the percentage relationship between net sales and the major categories in the consolidated statements of earnings change for each item it is still important in evaluating the performance of the business operations (homedepot). The business operations of the store had many key factors that would influence the company’s financial performance for this 2012. The four key initiatives they will focus on will be customer...
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...Lowe’s Home Improvement Executive Summary Lowe’s Home Improvement Executive Summary B&B Consulting Nicholas Baziuk Shannon Browne 3/3/2016 B&B Consulting Nicholas Baziuk Shannon Browne 3/3/2016 To: Board of Directors of Lowe’s Home Improvement From: B&B Consulting Subject: Executive Summary B&B Consulting Services was requested to evaluate, assess, analyze and make recommendations to Lowe’s Home Improvement in the areas of strategy for growth improvement. The following information will give Lowe’s a better understanding of its company and what improvements can be made in the short-term and long-term. Current Strategy Lowe’s current strategy is to differentiate itself through better customer service. Lowe’s other focus is on the changing home improvement landscapes. In recent years home owners have changed how landscaping looks and operates. Lastly, Lowe’s is looking to deliver long-term profitable growth and substantial return to its shareholders. Competitive Analysis Lowe’s will continue to develop deeper, more meaningful relationships with its customers by having strong brand value and giving support to its customers. Its main focus is “do it yourself” home owners and having larger more spacious stores compared to its competitors. Lowe’s and Home Depot have both aggressively expanded in the United States, especially in the metropolitan market. SWOT Analysis -Lowe’s Home Improvement Strengths * Brand Recognition * Distribution Network *...
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...1 In Financial Statements Paper Part 1 I will discuss The Home Depot’s annual report, to include the consolidated statement of earnings, the balance sheet, and the statement of cash flows. I will discuss some details of each sheet, the importance of the contents, business decisions associated with each sheet, and the benefits gained from the information contained in the sheets. The Consolidated Statement of Earnings-- income statement-- tells the reader about the sales and expenses applied by The Home Deport during the most recent fiscal year. An immediate analysis of this income statement indicates the company has net sales figures between $70 billion and $80 billion per year. This is a significant difference over a three year time period. The one very noticeable issue is the substantial decrease in sales from 2008 to 2009. The Home Depot´s net sales in 2008 dropped roughly eight percent compared to the previous year. Operating expenses increased by approximately 105%, while operating income decreased by about 40%. The increase in operating income helped bring the numbers up, but after it is all said and done, the bottom line is the fact that net earnings were down approximately 49% in 2008 compared to the previous year. The Home Depot attributed the significant decline in sales to the decline in the residential (new) construction and home improvement markets. In addition to the decline in sales, The Home Depot reported higher expenses during fiscal 2008. The Consolidated...
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...whether they are relayed in person, over the phone, or via email and it is crucial that everyone involved comprehends the message being relayed (2011). From the production process to the delivery and sale of the products, communication is a key instrument that will eventually cause a retail business to become profitable. In today’s society, there are many retail businesses that exist and offer a variety of products and services for a consumer to select from. Some retail businesses sell food, home improvement items, patio furniture, clothes, sporting goods, and other commodities. Kroger’s, Publix, Lowe’s, Ace Hardware, and Wal-mart are leading retailers that offer various products and services and they are located throughout the United States and in other countries. The Home Depot is a global retail business that specializes in home improvement merchandise and have stores located throughout the Unites States and other countries (Corporate). The Home Depot is the world's largest home improvement specialty retailer with stores in all 50...
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...Strategic Plan; Home Depot Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, and ensure that employees and other participants are working toward common goals. It is a disciplined effort that produces essential decisions and actions that shapes and guides what an organization is, who it serves, what it does, and why it does it. Strategic planning focuses on the future of the company. Strategic planning is building a plan that provides guidance in fulfilling a mission with maximum efficiency and impact for a company. Basically it is the Who, What, When, Where, How and How Much aspect to planning. “A company collectively tries to agree on where it is going (its vision) and how it’s going to get there (its strategy)” (Abraham, 2012). Strategic planning is a very important part of having a successful organization. Without it, the employees will not know what to do or why they are doing it and over time the company will not succeed. In order for the plan to be effective and useful, it should articulate specific goals and describe the action steps and resources needed to accomplish them. In other words, Strategic Planning is a regimented effort to analyze certain things like: the objectives of the organization, why it’s doing that and what is it going to do in the changing environment or future. I have selected Home Depot to analyze and prepare a strategic plan to grow the organization...
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...point of view of Joey de Belen, the supervisor of the cold storage depot. It is appropriate to choose him since he has a degree in business administration and he had firsthand experience of the problems in the company. It is also his decision if he will continue to work for the company. II. PROBLEM ANALYSIS Joey cannot decide whether he should go back to work after his leave or to resign because he encountered many problems and issues during his time as the supervisor of the depot. Because of the unstable financial condition of the company, the workers compromised to work half time for half the pay so that they will not lose their job and at least bring some income to their families. Everything went well at the start but then theft incidents began to happen. Joey was then assigned as the supervisor to “clean up” the depot. It can be seen that Joey is a task oriented leader, he failed to fix the relationships in the workplace and this resulted in tardiness, absenteeism, and decreased productivity. When he asked his higher ups for support they did not respond and were uncooperative. His actions made his subordinates unhappy and it worsened to the point that he was threatened by some of them. III. Problem Statement How would Joey de Belen shift his leadership style in order to improve his relationship with his co-workers under the Cold Storage Depot Section? IV. ANALYSIS OF RELEVANT CASE FACTS ...
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...statements give and why they are important. The information in these statements can also be useful in making business decisions. In this paper we will discuss the contents, the importance and the usefulness of these statements found in Home Depot 2008 Annual Report. Consolidated Statements of Earnings - Income Statement The consolidated statement of earnings or the income statement reports the companies income, expenses, and profits over a period of time, usually a year. The Home Depot uses a multiple-step income statement, this type of statement separates revenue operating revenue and expenses from all other types of revenue and expenses. The income statement includes net sales, costs of goods sold, and gross profits according to the Home Depots income statement sales and profit has decreased over the last three years. Part of this could be due to the increase in operating and non-operating expenses. Cash disbursements and cash receipts are not included in the income statement. Income statements also show the earnings per share (EPS) or how much money a shareholder would receive if the Home Depot were to distribute all of their net income for that period. The income statement can show investors and creditors the past financial performance for Home Depot, it can also predict future performance and asses the capability of generating future cash flow through income and expenses reported ("Wikepedia", 2014). Investors can use the income statement to determine if they should invest in...
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...Bringing A Product to Life When the idea of developing a new product presents itself, there is one of six categories that this “new product” will fall into. The first is new-to-the-world product, new product lines, additions to existing product lines, improvements or revisions to existing products, repositioned products, or lower-priced products. New-to-the-world products create a new market that no product has previously created. A company may create a new product line when it creates a product that allows them to enter a never before entered, established market. When a company adds products to supplement its already established lines, it has made additions to its existing product lines. Some companies may take an existing product and create a “new and improved” version. Other may try to take an existing product and target new markets or market segments through repositioning. Still other companies may just offer a product whose price is lower. Regardless of the new product that a company may offer it still faces the same challenges to bring the product to life. The marketing strategy has already been identified during the new product development process. The marketing strategy consists of the selection and description of one or more target markets and the development and maintenance of a marketing mix. Before the product has been developed, the target market has already been identified. The target market is the market segment or a group of individuals that share one...
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...A Strategic Analysis of Home Depot GM599 A Strategic Analysis of Home Depot Introduction The Home Depot (NYSE: HD) is a home improvement, construction products and services retailer operating over 2,000 big-box stores in the United States and abroad. The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank with the vision of one-stop shopping for do-it-yourself (DIY) customers, installation services for do-it-for-me (DIFM) customers and competitive products for the professional market. Their DIFM installation programs include products such as carpeting, flooring, cabinets, countertops, and water heaters. In addition, the company provides installation of various professional products like generators and HVAC systems. The Home Depot developed strategic product alliances directly with industry-leading manufacturers to deliver the most exclusive assortments to customers. Through a combination of national brands and proprietary products The Home Depot exclusively carries several major brands, including: BEHR Paint, G.E., Martha Stewart Living and Thomasville, which sets the standard for the do-it-yourselfer and the professional contractor. The Home Depot revolutionized the home improvement industry by bringing the know-how and the tools to the consumer and by saving them money. According to the founders, the customer has a bill of rights at The Home Depot, and this entitles the customer to the right assortment, quantities and price, along with trained associates...
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