...External Environment Analysis Kristy Sanchez MGT/488 September-Sunday 11, 2011 Jeannette Guignard External Environment Analysis Introduction This essay is written in regards to the Home Depot and the evaluation of their external environment. The Home Depot is a highly successful retail industry that has expanded globally. The Home Depot has a wide variety of supplies and materials for all home improvement projects. They even have tools, equipment, and trucks that can be rented out to assist with any larger home improvement needs. The Home Depot has made a continuity plan to assist with protection of the customers, associates, and the industry if a crisis or disaster occurs. A continuity plan is basically the instructional list or procedures for the company in the event that a crisis or natural disaster occurs and how they will handle that event. This essay will look at how the external environment affects that plan. This essay will also look at the affects of the environment in three other areas as well, including general, industry, and competitor. Finally, it will look into the business ethics and see how they play a role when gathering information for competitor intelligence. The Home Depot has a continuity plan that they follow that can be found in their code of conduct and ethics manual. That continuity plan is as follows: “We are committed to taking all reasonable steps to minimize risks to our associates, customers, facilities, information assets and supply chains...
Words: 1180 - Pages: 5
...Home Depot Failed in China Name: Chuanshi Liu ID: h701789460 Course: IB 207 Background Home Depot is the largest home improvement retailer in the world. It has about 2200 stores across the United States, Canada, and Mexican. It targets three main customer groups, which are D-I-Y customers, D-I-F-M customers and professional customers. Home depot is famous for its D-I-Y products and services. In 2006, after housing market turn down in the United States, Home Depot entered into the China home improvement market through a full M&A activity. It has twelve stores in Beijing, Shanghai, and other large cities in China. Home Depot served the similar services and products to Chinese customers, which also include the D-I-Y products. However, Home Depot did not succeed this time in China. From 2006 to 2012, the top managers in China area have been changed three times. Home Depot wanted to find out the solutions to this bad situation in local market. However, the situation was worsened when the building material market turned down in 2012, 12 main stores have been closed in local market. Top managers believe that the main reason for their failure is the cultural difference. The D-I-Y services and products do not fit the local culture. Changes and effects Business Environment There are changes in business environment for Home Depot. In United States, the biggest competitor for the Home Depot is Lowe's. They have very similar products and services. Both...
Words: 2932 - Pages: 12
...THE HOME DEPOT OVERVIEW Bernie Marcus, Ken Langone and Pat Ferrah created the Home Depot in 1978. Their main vision was “One – Stop shopping for do it your self”. The Home Depot opens its door with two large stores located in Atlanta Georgia in 1979. With operations focus on customer services, The Home Depot provide their clients with highly trained personnel, leading those customers with quality services through different kinds of constructions projects. Their philosophy of customer services “whatever it takes” means purpose on develop customer relationship instead a simple sales transaction. Since its foundation in 1978, The Home Depot has been known as a story of growth; recognized as the fastest growing retailer in United State. In 1981 the company went public and by 1984 moves to the New York Exchange Commission. This kind of financial movement allows the opening of international operations. By 1984 Home Depot was opening operation in Canada by the acquisition of the company called Aiken Heads. After Canada, Home Depot expansion took place with Mexico in 2001 and China in 2006. Through the combination of national brands and products The Home Depot sets the standard for innovate merchandise for do it yourself customers and professional contractors. MARKET SYSTEMS AND LEGAL SYSTEMS With operations in different countries around the world, Home Depot needs to be aware about the different market and legal system that...
Words: 1567 - Pages: 7
...Home improvement has become a common staple in many people’s lives. Many people don’t go a day without thinking up projects that they need to do around the house. Home Depot’s main mission they strive to achieve is that they strive to achieve is social responsibility and brand strength, along with putting their customers before their product and profit. To show this, they have their mission statement as: Our goal is to provide the highest level of service, the broadest selection of products and the most competitive prices. When Bernie Marcus and Arthur Blank opened the first Home Depot store in Atlanta in 1979, they envisioned huge warehouse-style stores stocked with an extensive selection of products offered at the lowest prices. Home improvement do-it-yourselfers and building contractors can browse among 40,000 different products ranging from carpeting, lumber, paint, tools and landscaping options. If you can’t find what you need within those 40,000 products, Home Depot offers 250,000 products that can be special ordered. Some stores are open 24 hours a day, but customers can also order products online. Additionally, the company offers free home improvement clinics to teach customers how to tackle everyday projects like tiling a bathroom. If you prefer not to “do it yourself”, most stores offer installation services. Currently, Home Depot employs more than 300,000 people and operates over 2,250 Home Depot stores in the United States, along with 6 other countries. The company...
Words: 1797 - Pages: 8
...Finba1. i. Home Depot’s mission statement is as follows: “The Home Depot is in the home improvement business and our goal is to provide the highest level of service, the broadest selection of products and the most competitive prices. We are a values-driven company and our eight core values include the following: Excellent customer service, Taking care of our people, Giving back, Doing the "right" thing, Creating shareholder value, Respect for all people, Entrepreneurial spirit, Building strong relationships.” (Home Depot, 2014). According to Exhibit 2.1 in chapter two, Top management of a company provide strategic direction after assessing the external and internal environments. Taking a look at the external environment, some of Opportunities available to Home Depot (Circa 2005) were Restructuring, to make operations more sound and profitable, provision of internet shopping facilities to customers, and expanding the market geographically and locally, as well as targeting new market segments. It should be quite important to note that during the Nardelli era, the slogan Home Depot used was “Improve everything we touch”. Threats included declining home sales and market share, a looming credit crunch, a dip in the level of customer service and product knowledge hitherto offered due to poorly trained staff, and a saturation of the markets in North America. Increasing levels of Environmental Uncertainty as more layers of management are added to achieve a more vertical structure...
Words: 3460 - Pages: 14
...one of those businesses turns into a huge corporation or is able to add a sister company in a another city. For the ones that do make it big to have multiple stores across the world leave it to each person’s imagination on how they were able to be so successful, but to the people in the business world it is know that those companies had a strategic plan and strategy that was followed for the company to be so successful. Walmart which runs as a cost leadership strategy and Home Depot which runs as a service focused strategy are two very good examples of companies that have made it big and are their strategies are easily visible and explained. Walmart seems like an everyday trip to some families around the world because it has become so big that everyone has someone in their family that dreads hearing the famous phrase “We need to go to Walmart today” in their home. Walmart is a cost leadership strategy because they are the lowest cost producer that can sell at or below industry prices and by doing this they gain a bigger market share. This gives Walmart the competitive advantage in many different areas of the market and helps to control pricing.When we look at Walmart’s internal environment we look at their strengths which include the consumer’s knowledge and understanding of low prices, their market clout, their competence in information technology, and their wide range of stores across the world. Customers know that by going to Walmart is going to save them money because...
Words: 1328 - Pages: 6
...Home Depot Patsakorn Niruntasukrat Mahidol University International College Preparation Center for Language and Mathematics February 27, 2014 Home Depot Foundation's Sustainability Obama stated that “It is not a choice between our environment and our economy; it is a choice between prosperity and decline” (“Sustainable Development Strategies”, 2009). Sustainability means the balance of three things which are steady business, society and friendly environment. In other words, businesses must show crucial responsibility in terms of environmental impacts and social responsibilities. Consequently, businesses must utilize natural resources carefully, and the economic growth and employment rate of businesses must be increased (“Understanding Sustainability”, n.d.). Therefore, sustainability is an aim of businesses. The Triple Bottom Line or TBL is a significant tool advocating sustainability goals. The concept of TBL emphasizes three things, which are healthy communities (people), clean environment (planet) and stable profitability (profit) (“Slaper & Hall”, n.d.). In contrast with the past, many businesses, nonprofit organizations and government entities tend to follow this guideline. Home Depot is one of the best examples of companies which are following the TBL standard. Home Depot is the world biggest home improvement retailer (“Did You Know”, n.d.). The company was established by Bernie Marcus and Arthur Blank in 1978. The first two stores opened on June 22...
Words: 1929 - Pages: 8
...Arthur Blank founded the Home Depot in 1978. Along with investment banker Ken Langone and merchandising guru Pat Farrah, the founder’s vision of one-stop shopping for the do-it-yourselfer came to existence when they opened the first two Home Depot stores on June 22, 1979, in Atlanta, Georgia. The first stores, at around 60,000 square feet each, were cavernous warehouses that dwarfed the competition and stocked 25,000 SKUs, much more than the average hardware store at that time. Empty boxes piled high on the shelves gave the illusion of even more product. in only one year they opened a 4th store in Atlanta and the company had annual sales of $22.3 million dollars. In only 10 years on its 10th anniversary Home Depot opened its 100th store in Atlanta. I. Current Situation The Home Depot is the fastest growing retailer in U.S. history. Home Depot is the largest home improvement retailer and the second largest retailer behind Wal-Mart in the United States based on net sales for the 2005 fiscal year. In 1981, the company went public on NASDAQ and moved to the New York Stock Exchange in 1984. The 1980s and 1990s spawned tremendous growth for the company, with 1989 marking the celebration of its 100th store opening. The company arrived in Canada with the acquisition of Aikenhead’s home improvement centers in 1994. In 2003 Home Depot opened its 100th Canadian store. Home Depot began flying its flag proudly in Mexico in 2001 through the acquisition of Total HOME. In 2006, the company extended...
Words: 2464 - Pages: 10
...Running head: STRATEGIC DIRECTION—HOME DEPOT Strategic Direction—Home Depot Keller Graduate School of Management J. Lambrou, Professor Strategic Direction Introduction What is Strategic Direction? This means taking your company in a direction related to what’s happening in the dynamic environment of what the business provides (be it in a services, manufacturing, technological, or financial area). (Olsen, 2007) Therefore, the strategy and direction the company take are defined by what established and unique value propositions the company has when compared to competitors; operations executed to provide different and tailored value to customers; clearly identifies any tradeoffs and clarifies what not to do; focuses on activities that fit together and reinforce each other; and is continually driven for improvement within the organization and while moving it toward its defined vision. I use The Home Depot (Home Depot here-out) for this paper as I have a part-time job with them. Strategy Home Depot’s simple and straightforward strategy is to ensure it diversifies its operations by having several businesses competing in the different product markets of home improvement. (Home Depot, 2008) The Home Depot has positioned itself within the industry based on a strategy of cost leadership. This operating strategy allows the company to earn above-average profitability by dictating prices from suppliers lowering input costs and minimizing distribution transactions eliminating...
Words: 3469 - Pages: 14
...The two well-known home improvement retailers are Lowes and Home Depot. The two have been the largest retailers in the industry for over a decade. There are several similarities and differences between Home Depot and Lowes regarding market, size, and strategic priorities. One similarity is the size of their stores. Lowes stores have a space of 112,000 square feet and 31000 square feet of garden space, while Home Depot has 24000 square feet of garden space and 104000 square feet of enclosed space (Fernando, 2015). Home Depot offers services to both male and female; nonetheless, it is predominantly made up of men. Home Depot offers a wide array of products to its current market. On the other hand, Lowes offers products and service for both genders. The stores are arranged in such a manner that it is a female friendly environment. This stresses the significance of improving the feel and look...
Words: 673 - Pages: 3
...External Environment Analysis Introduction This essay is written in regards to the Home Depot and the evaluation of their external environment. The Home Depot is a highly successful retail industry that has expanded globally. The Home Depot has a wide variety of supplies and materials for all home improvement projects. They even have tools, equipment, and trucks that can be rented out to assist with any larger home improvement needs. The Home Depot has made a continuity plan to assist with protection of the customers, associates, and the industry if a crisis or disaster occurs. A continuity plan is basically the instructional list or procedures for the company in the event that a crisis or natural disaster occurs and how they will handle that event. This essay will look at how the external environment affects that plan. This essay will also look at the affects of the environment in three other areas as well, including general, industry, and competitor. Finally, it will look into the business ethics and see how they play a role when gathering information for competitor intelligence. The Home Depot has a continuity plan that they follow that can be found in their code of conduct and ethics manual. That continuity plan is as follows: “We are committed to taking all reasonable steps to minimize risks to our associates, customers, facilities, information assets and supply chains and maintaining the continuity of our business when a crisis occurs. A crisis can be natural or man-made...
Words: 304 - Pages: 2
...Home Depot Stephanie Zarwasch-Weiss, Baileigh Graham, Cameron Alleman BU110 9/28/2014 Melody Evans Home Depot International Operations Home Depot operates in several different areas internationally. The United States opened up a Home Depot store in 1978 and has 2,200 local retail stores. A store opened up in Canada in the year 1994. Now, Canada has 180 retail stores along with 10 different provinces. Home Depot also expanded throughout the United Kingdom in 1999. Mexico has 107 Home Depot retail stores and the first store was built in 2001. Lastly, South America’s first Home Depot store was built in the year 1998. Scope & Capacity Home Depot has a lot of agreements and forms required in order to have a business relationship with different companies. In order to make sure that every Home Depot store is on the same page, every company has to keep an appropriate software and systems update. “Suppliers are required to setup and maintain an environment to facilitate electronic exchange based on the appropriate governing standards body. Suppliers are also required to transmit an electronic acknowledgement within the set time to support the business.” When a supplier becomes Home Depot’s supplier, they are expected to be fully engaged in the requirements of the Business to Business program within 90 days. All direct import programs for the Home Depot USA and Canada will be subject to the Direct...
Words: 491 - Pages: 2
...ZhangAlex Zurbuch | Mingle Li | | Fin 470 Oct 16, 2011 Value Line Publishing There are two leaders for retail building-supply industry: Home Depot and Lowe’s, the two companies captured more than third of the total sale of the industry. Home Depot hold 22.9% market shares of the industry and Lowe’s hold 10.8% market share. Two companies are head to head competitor but focus on different market, Home Depot focused on large metropolitan areas and Lowe’s focused on rural area. Two companies both maintained online stores. Lowe’s has its own Web site: “Accent & Style” and focused on professional customer. Home Depot developed new type of retail stores in urban area and provide products and services in a compact format. Home Depot developed its first international retailer in 1994 and 10% of Home Depot international stores were built in global area at the end of 2001. Home Depot has 1,333 stores and 256,300 employees in 2001 and Lowe’s has 744 stores and 108,317 employees in the same period time. Return on equity shows how well a company uses investment funds to generate earnings growth. Generally a return on equity between 15% and 20% are considered desirable. Home Depot’s five year returns on equity all between 15% and 20% and Lowe’s five year returns on equity mostly less than 15%. The data prove Home Depot got higher net earnings than Lowe’s. Gross margin can use to determine the value of increasing sales. The higher gross margin means the company...
Words: 1709 - Pages: 7
...Home Depot and PepsiCo Founded in 1978 by Bernard Marcus and Arthur Blank, The Home Depot is an American home improvement and construction product retailer. It operates stores in all fifty states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, Canada and Mexico. It is the largest home improvement retailer in the United States, next to Lowes. Founded in 1965, PepsiCo is an American food and beverage corporation formed between the merger of Pepsi-Cola and Frito Lay. PepsiCo has gone on to expand to include Tropicana, Quaker Oats, Gatorade and many more. Each generating sales of one billion dollars each and distributed in more than 200 countries (PepsiCo). As of 2011, PepsiCo employs approximately 297,000 people worldwide (PepsiCo). This paper will assess the above mentioned companies areas of leadership, management, organizational learning (training), and culture and compare and contrast to the structure The United States Army and Macy’s Department Store. Home Depot Leadership: In 2000 Marcus and Blank were replaced with Robert Nardelli, who pushed hard to make the company more efficient, bringing with him many new metrics to centralize operations, and to meet quarterly goals he even cut jobs of associates. Nardelli, a former General Electric top executive, arrived at Home Depot with a leadership style that was already outdated, an autocratic top –down style of command and control. Under Nardelli, Home Depot went from a retail business to a new contracting...
Words: 1739 - Pages: 7
...Business Ethics Business speculators believe that ethical leadership is all about good character of leaders. Ethical leadership is regarding raising the bar, generating value for stakeholders, assisting people to understand their dreams and expectations, and doing these duties with the intensity and significance that ethic connotes. Ethical leaders speak directly to people about their identity and life conditions and they pay special attention to developing the people. Simply I would like to say ethical leaders are common people like us, who are leading their life as examples for people to live better. In this paper, I will explore the leadership style and methods of Robert Nardelli who was named Chief Executive Office of the Home Depot in 2001 (Ries, 2009). Robert Nardelli Leadership Style Home Depot Robert Nardelli presented many latest initiatives to the corporate world such as company-wide analytics, centralized buying and better information systems, these are important for the company to remain competitive. Anyhow, most of his changes results in reduced productivity, significant dissatisfaction, low morale, and high turnover. This result was considered as the most dissatisfaction of customers in retailing history (Brabec, 2006). On the American customer satisfaction index (ACSI), home depot had customer satisfaction scores of 74 in the year 2001. In 2005 anyhow, customer satisfaction score of home depot fell to 67, which was the worst performance on ACSI that year...
Words: 841 - Pages: 4
