Saturday, June 1, 2019

The Home Depot Business Strategy

The Home Depot’s vision statement is “to create a company that would keep alive the values that were important to us. Values like respect among all people, excellent customer service and giving back to the community”. This vision statement is short and sweet, and displays an attitude of caring about the overall climate and culture of the organization. There is intention of the future of the company by using the word “create” at the beginning of the statement, this also makes it inclusive of everyone, the entire company. While the vision statement promotes a positive climate, it lacks specificity to its good business sense. There is no directional path for the long term interests of the stakeholders.
Financial and Strategic objectives that The Home Depot could set are:
  • Fully integrated and interactive customer experience- This is strategic because it strengthens their market value.
  • Overtaking Lowes in the professional and commercial market- This would be strategic because it advances their market standing.
  • Increasing shareholders value by 10% by the end of the fiscal year- clearly a financial objective due to it increasing financial performance.
  • Annual dividends and shareholder buybacks increase by 5%- a financial objective, performance related.
The core values that The Home Depot promotes and tries to live by are built on eight principles.
  • Creating shareholder value
  • Entrepreneurial spirit
  • Taking care of their people (employees)
  • Respect for all people
  • Doing the right thing
  • Building strong relationships
  • Giving back
  • Excellent customer service
The Home Depot does a good job of living up to some of their principles that make up their core values. One of the ways they have done this is my increasing shareholders value. As the US housing market has boomed over the last several years, The Home Depot has done well taking care of their shareholders with dividend buy backs, helping holders earn double digit returns on investments. Giving back to the community is priority for The Home Depot, giving back to the community by creating educational grants, donating goods to Habitat for Humanity and veterans outreach. Doing the right thing is a subjective statement in that what one person thinks is the “right thing”, could mean something totally different to another person.
One of the main largest competitors for The Home Depot is Lowes. At a glance, other than a color scheme, look the same. It’s a hardware store. The Home Depot is targeted towards industrial, professional home improvement and both the everyday home do it yourself customer. Lowes features more elaborate floor displays and more centric on home d├ęcor. One feature that The Home Depot has that helps to give them a competitive advantage is support services for professional customers. Growth of pro customers business is part of The Home Depot’s strategy, they help a small construction company order or rent equipment and help that company with maintenance of equipment and filling continued contracts.          
There are two things about The Home Depot’s strategy that can lead to sustainable competitive advantage The “Pro Referral” program is an online community where professionals who are “pro customers” can refer work to another pro. If a customer is looking for a specific job to be done, there is database of professionals that Home Depot can refer you to. The Pro customer receives discounts or specials on goods or equipment. An integrated retail is another competitive advantage. A customer can see a live inventory online of a product in a nearby store, order it and pick it up same day.         

References
Desmidt, S. (2016). The Relevance of Mission Statements: Analyzing the antecedents of perceived message quality and its relationship to employee mission engagement. Public Management Review, 18(6), 894–917.https://freemanagementresources.com/the-home-depot-strategy/
Greyser, S. A., & Urde, M. (2019). What Does Your Corporate Brand Stand For? Harvard Business Review, 97(1), 80–88. Retrieved from: https://freemanagementresources.com/the-home-depot-strategy/
The Home Depot (2018). Stores, Products, and Services.
Thompson, A. (2018) Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. Retrieved from: http://www.freemanagementresources.com

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