Strategic Business Analysis: Home Depot
Home Depot is indisputably the worldÆs largest home improvement retailer, topping the list with 930 stores compared with the 402 stores of its nearest competitor, LoweÆs. (ôWorld's Largest Home Improvement Retailer Names BNSF Partner of the Year;ö ôA Citizen's View of Home Depotö). Home Depot was also listed by one magazine as ôAmerica's most admired retailerö (ôA Citizen's View of Home Depotö). The companyÆs sales for the nine months ending in October 1999 were 29.26 billion, compared with $12.12 billion for its nearest competitor; its sheer size alone enables it to achieve great economies of scale (ôCompany Analysisö). A number of internal and external factors combine to make Home Depot the head of the home improvement retailer pack, and an analysis of these factors provides insight into its competitive advantage.
Home Depot has massive internal strengths that have largely originated in its eight core values:
á Building strong relationships (ôCompany Analysisö).
Making these core values a priority has enabled Home Depot to build a customer-centered business that emphasizes relationships and service, both valuable commodities for any retail enterprise that wants to rise head and shoulders above its competitors. Happy customers whose needs have been met and who feel as though they are valued by the company have catapulted Home Depot to the top of the heap, so far beyond its competitors that it is virtually unassailable. Customer satisfaction and retention are key to star-quality sales figures (ôCompany Analysisö).
Home Depot has a facility for making wise internal business decisions, as well. At a time when most companies have not yet discerned that human resources directors need to assume a strategic role within companies, Home Depot has already made its human resources director, Dennis Donovan, part of the top team (Maher). CEO Robert Nardelli hired Donov...