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students will prepare a 5 – 7 minute overview of the business they
selected and present it to the class on the schedule day and time. Use
a Power Point or Prezi to highlight your information. You can have as
many slides as it takes to present your information in 5 minutes.
Please dress appropriately for making a presentation – no athletic
wear. Practice your presentation at least 3 times to ensure it is no
longer than 5 minutes.
home_depot_enterprise_final.doc
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Running Head: HOME DEPOT ENTERPRISE
Home Depot Enterprise
Student’s Name
Institutional Affiliation
Course Number
Date
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HOME DEPOT ENTERPRISE
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Home Depot Enterprise
Introduction and Thesis Statement
The Home Depot enterprise is an American based firm that deals with the trade of tools,
building merchandises, and supply of home improvement materials to its clients. Importantly, the
business headquarter is located in Atlanta with an unincorporated support base spread in the
country (Erskine, Camillo, Bajada, & Holt, 2015). Moreover, the store has numerous outlets
distributed across the fifty states of America, Virgin Island, and Guam. Additionally, the
company has various openings in the ten provinces of Canada and Mexico that helps in
distribution of its products. Notably, the primary objective of Home Depot is to create one-stop
shopping for its customers, and the notion was developed by the introduction of two pioneer
stores in the year 1979 in Atlanta Georgia (Erskine et al., 2015). Currently, Home Depot is the
most significant retailer in the United States surpassing its major competitor Lowe’s since the
beginning of 1989. In essence, the corporation has been increasing its consumer base by
expanding to other countries and developing its product to suit their shoppers, hence, having a
competitive edge compared to rivals (Home Depot, 2017). Therefore, this paper precisely
examines Home Depot business profile, structure, marketing strategies, and financial analysis.
The Main analysis
Business Profile
Founders
The Home Depot Company was established in the year 1978 by Bernie Marcus and
Arthur Blank, and they were helped by an investment financier Ken Langone that aided in
securing of financial services (Erskine et al., 2015). Further, Ron Brill and Pat Farrah were
among other individuals that were involved in developing the firm with a vision of making the
HOME DEPOT ENTERPRISE
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enterprise one of the largest stores in the country. Importantly, the first two outlets were built in a
rental space leased from J Penney in the city of metro Atlanta and memorial drive in Decatur
(Erskine et al., 2015).
Mission
Home Depot strives in a mission to enhance its success such as encouraging allies to
open up and take business risks through identifying and gratifying of good performance (Home
Depot, 2017). Further, the enterprise purpose is to provide excellent consumer services by giving
their clients substantial information concerning their products. In essence, provision of
knowledge to the shoppers help in a maximum utility of products and enhance client loyalty
(Home Depot, 2017). Moreover, the firm gives back to the society by providing their talents,
energy, and resources in worthwhile activities that improve the community livelihood.
Target Audience
Home Depot is a company that has transformed the do-it-yourself market in Northern
states of America by bringing new invention in the market. The firm has created numerous job
opportunities in more than 660 outlets due to a broad range of its customer base (Pride & Ferrell,
2016). However, the business excels in its activities as its choice of market segment targets
individuals that are involved in construction industries such as contractors, builders, traders, and
renovators. Similarly, the enterprise aim at the do-it-yourself type of clients that entail household
owners since this kind of customers buy materials and install them themselves by the help of
internet resources (Pride & Ferrell, 2016). Moreover, the firm also provides services to the do-itfor-me shoppers by offering assistance like installation, cabinets, and water heaters.
Industry
HOME DEPOT ENTERPRISE
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Home Depot industry is a business that was formed by Bernie Marcus and Arthur Blank
in 1978 with the help of Ken Langone that acted as a capital provider. The enterprise offers home
improvement services to its customers across the country of America by providing them with the
opportunity to do-it-for themselves (Home Depot, 2017). Additionally, the firm offers substantial
information to its clients before they buy a product to build a consumer confidence on their
merchandise. Currently, the company is the most significant retailer in the country with its
competitor being Lowe’s.
Changes in the Last Ten Years
Home Depot has made significant changes over the last ten years in its activities to
enhance success by improving its client base through the provision of various techniques that
offer maximum satisfaction to consumers. Introduction of Frank Blake leadership facilitated the
company to realize substantial gains in the market since the CEO was able to make radical
changes in marketing, technologies, stores, and human resource (Home Depot, 2017). The
company was able to convince its customers to repaint their roofs during the recession as it was
considered cost-effective and the firm employed women personnel to help in the job.
The strategy enabled the enterprise to increase its customer base as women staffs became
appealing to other stakeholders like contractors. Significantly, the introduction of sealing floors
that looked shinier and kept down the dust became attractive to various individuals making the
firm to enhance its profits. Notably, the store extended its outlets in China and considerably
increased the number of employees to facilitate customer efficiency (Home Depot, 2017).
Importantly, the invention of black locus technology during Blake era enabled consumers to
compare prices that are offered by the company compared to that provided by its competitors.
Business Structure
HOME DEPOT ENTERPRISE
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The Home Depot business structure has transformed significantly over the previous years
as the enterprise became an international industry. In essence, a company’s organizational
structure is described as a system that associates various parts of the firm to enhance efficient
workflow (Steiger, Hammou & Galib, 2014). However, in Home Depot the arrangement helps
the shop to understand how several activities employed by the store aids in connecting the
targeted clients. Additionally, Home Depot business structure acts as a layout that facilitates
successful implementation of numerous approaches to encourage growth and expansion of the
enterprise (Home Depot, 2017). Considerably, Home Depot entails a divisional organization that
has some characters of a functional group.
Geographic Division
In essence, the company has a geographic feature that is the most noticeable division in
the business structure. The U.S business outlet is headed by an executive vice president while the
other units found in Canada and Mexico are presided by a president (Home Depot, 2017).
Global Functional Groups
Additionally, Home Depot’s business structure significantly entails functional groups
such as international human resource management group and a comprehensive product group
(Home Depot, 2017). The merchandising sector comprises of Hardline, Décor, and Construction
materials group. Importantly, this feature helps the organization to address specific
entrepreneurial functional requirements within the enterprise.
Global Hierarchy
At Home Depot Company, the hierarchy system is based on the global and store levels.
In essence, the hierarchy structure is at the lines of authority with the head of Northern and
Southern divisions reporting to the executive vice president (Home Depot, 2017). The executive
HOME DEPOT ENTERPRISE
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vice president of the U.S outlet reports to the CEO that is the overall head of the enterprise.
Every Home Depot shop entails a local organizational arrangement with the staff personnel
answerable to the store officer. The store manager considerably reports to the head of geographic
division (Home Depot, 2017).
Significantly, the divisional structure of Home Depot offers various benefit to the firm as
it allows the enterprise to maintain centralized control of the business (Steiger, Hammou &
Galib, 2014). Further, the strategy facilitates the development of merchandise and roles that
encourage an increased sale of goods through functional groups. Moreover, the company’s
arrangement supports customization of products to international and domestic markets and
promotes client preferences by improving its geographic divisions. However, the feature inhibits
the firm’s financial flexibility as the store managers have limited decision-making in the
business.
Human Resources
Home Depot understands that business associates are the significant players in enhancing
a company’s competitive edge against that of its rivals. In essence, the enterprise endeavors to
motivate and hold most of their employees that are considered to be high performing and with
significant skills (Home Depot, 2017). Currently, the firm has over 385,000 staff personnel
distributed across various stores located in the fifty states of US and ten provinces of Canada and
Mexico. Moreover, the company is the fifth largest provider of job opportunities compared to
other industries registered in the country’s S&P 500 (Home Depot, 2017). Further, the human
resource department has an employee self-service (ESS) that allows workers to view and modify
their associated materials. The technology enables the firm to have effective communication with
its staffs regarding taxes and other benefits offered by the enterprise (Home Depot, 2017).
HOME DEPOT ENTERPRISE
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Notably, Home Depot provides an opportunity for its associates to select plans and schedules
that meet their household and individual wants through their total value.
Business Marketing Strategies and also Product Development
The Home Depots marketing strategy is a transformational set of techniques incorporated
by the firm to enhance its product distribution and achieve a competitive advantage over its
competitors like Lowe’s (Steenkamp, 2017). In essence, the 4Ps employed by the company
shows the enterprise efforts to expand its client base through successful implementation of
numerous strategies. The industry majorly deals with the supply of home improvement
appliances, tools, and provision of various installation services to its consumers.
Product Strategy
Considerably, the Home Depot main merchandise includes its retail services that involve
feedbacks provided by its field officers such as carpenters and plumbers to the firm’s store
(Steenkamp, 2017). Significantly, the industry is an exclusive seller of numerous brands of home
improvement tools such as husky implements, HDX, Glacier Bay, and kilz paints.
Place/Distribution in Home Depot
The company’s primary place of selling its merchandise includes the outlets located
across the country. The strategy allows the company to distribute products to several parts of the
state, thus, enhancing customer satisfaction and reliability (Steenkamp, 2017). The approach
involves the use of a warehouse, online shopping, and mobile apps that aid consumers in making
orders. Significantly, the warehouse stores encourage large transactions of products since it
contains numerous merchandises kept in it. Additionally, development of the online system has
caused the company to have significant followers and shoppers that place orders, hence,
increasing its revenue through internet sales (Steenkamp, 2017). Notably, the industry has apps
HOME DEPOT ENTERPRISE
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that allow consumers to have an accessible location of several stores found in the region, thus,
encourages quick entry to the outlets.
Home Depot’s Promotion Mix
The company incorporates numerous marketing techniques to promote its products and
have a broad customer base. The various strategies used by the firm include advertisements on
televisions, personal selling, sales promotions, public relations, and direct selling (Steenkamp,
2017). However, the prominent method used by the enterprise is the television as it enables the
store to apply both print and online broadcasting in their ads. Further, the organization’s store
managers are vital in promoting products to its consumers as they elaborate on product utility to
the customer. Significantly, the introduction of pro extra program facilitates the provision of
product discounts and enhances purchase through an online channel by the clients (Steenkamp,
2017).
Pricing Technique
The company employs an everyday low price (EDLP) strategy to attract more customers
and promote its business in the new market such as China. The approach aligns to the firm’s
generic tactic that significantly helps in enhancing the organization’s reputation in the global
environment (Steenkamp, 2017). Considerably, the business continues to provide affordable
value to its goods and similarly offer high-quality products.
Financial Analysis
In the year 2015, the net sales of Home depot expanded from 6.4% to $88.5 billion at the
end of January 31, 2016 (Home Depot, 2017). Significantly, the company’s overall sales rose to
5.6% in the financial year 2015 that substantially expanded the firm’s comparable consumer
HOME DEPOT ENTERPRISE
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transaction. Further, the industry had a net income of $7.0 billion and diluted revenue per share
of $5.46 as equated to the net earnings of $6.3 billion and reduced wages of $4.71 per share.
The Home Depot’s fiscal year of 2016 saw the company advance its net sale from 6.9%
to $88.5 billion and $94.6 billion for the fiscal year concluded in January 2017 (Home Depot,
2017). Additionally, the firm’s total comparable warehouse sales expanded to 5.6% in the
financial period of 2016, accelerated by a 2.8% rise in the comparable customer store
transaction. In essence, the industry experienced a significant income of $8.0billion and diluted
revenues per share of $6.45 as equated to the net revenues of $7.0 billion and diluted profits for
the fiscal year of 2015 (Home Depot, 2017).
Considerably, for the second quarter of the year 2017, the enterprise acquired a net sale
of $28.1 billion from the $26.5 billion as compared to the second quarter of the 2016 financial
year (Home Depot, 2017). Additionally, the business increased its sales substantially for the first
six months of the year from $52.0 billion compared to the first six months of the year 2016.
Notably, transactions made by the US store rose to 6.6% for the second quarter of the 2017 fiscal
year.
Conclusion
In essence, Home Depot is a global company that is involved in the supply of home
improvement appliances across the US, Canada, and Mexico. The firm was established in 1978
and has significantly risen to be the largest retailer in the country surpassing its primary rival
Lowe’s. Notably, the business has a divisional form of organizational structure that helps it to
enhance various activities and compete favorably in the market. Checking on the entire analysis,
it is evident that Home Depot understands that business associates are the key players in
facilitating a competitive edge against its opponents. Considerably, Home Depot employs
HOME DEPOT ENTERPRISE
different marketing strategy such as the use of internet and print media to expand its customer
base. Conversely, Home Depot enterprise has been increasingly growing its profits from a
substantial sale of goods and venturing into new markets like China.
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HOME DEPOT ENTERPRISE
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References
Erskine, A., Camillo, A. A., Bajada, A. J., & Holt, S. (2015). The Home Depot: A Competitor’s
Strategic Audit, A Case Study. University’s library website In Global Enterprise
Management (pp. 171-189). Palgrave Macmillan US.
Pride, W. M., & Ferrell, O. C. (2016). Foundations of marketing. Cengage Learning.
Steenkamp, J. B. (2017). Global Marketing Mix Decisions: Global Integration, Not
Standardization. In Global Brand Strategy (pp. 75-109). International Journal of
marketing UK.
Steiger, J. S., Hammou, K. A., & Galib, M. H. (2014). An examination of the influence of
organizational structure types and management levels on knowledge management
practices in organizations. International Journal of Business and Management, 9(6), 43.
The Home Depot. (2017). International Journal of the Home Depot. Retrieved 17 October 2017,
from https://corporate.homedepot.com/
…
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