Home Depot Is the Giant

Home Depot is the giant do-it-yourself home improvement chain selling a huge assortment of items. The customer driven company is known for its excellent customer service, helpful employees, professional clinics and in-store clinics building lasting relationships with customers by helping them to solve their problems. Today Home Depot is the largest in the U.S.A. with more than 355,000 employees and 2,114 stores. Competitors Lowe Companies Inc. is the direct as well as major competitor of Home Depot.

Lowe started as a regional hardware store and today has become number two home improvement chain. Lowe over the years has given stiff competition to Home Depot resulting in the resignation of its CEO Robert Nardelli this year due to stock's poor performance as compared to Lowe's. "Though Home Depot is the No. 1 home-improvement retailer, No. 2 Lowe's has been growing faster. Lowe's posted a 4% rise in third-quarter sales at stores open at least a year and expects fourth-quarter sales to rise 2% to 4%.

Meanwhile, Home Depot's same-store sales fell 2% in the third quarter, and fourth-quarter sales are forecast to be down 3% to 5%. But Lowe's has far to go to close the gap. Lowe's has 800 stores and posted $22 billion in 2001 sales. Home Depot has 1,400 stores and tallied $54 billion in 2001" (Howard, 2002). Both Home Depot and Lowe are on the Fortune 500 companies list. Other competitors for Home Depot in home imporovement market include Wolseley plc, CCA Global Partners & Menard, Inc.

Other than Lowe Home Depot also considers Wal-Mart as its major competitor as they both are in the retail market but Home Depot has its focus on home improvement. Target Market Home depot target market is do-it-yourselfers and professionals for home improvement. Other than these there are BIY or Buy it yourself customers who do not have enough time. Both Lowe and Home Depot target the same market.

The difference comes in the product line of Lowe as it also offers appliances and home electronics which Home Depot does not offer. Products wide range of goods and services are offer by home improvement chain that include construction products, building materials, gardening products, home fashion items, lumber, millwork, plumbing & electrical supplies, tools, appliances, and furniture.

Home Depot sells its products in unique big-box format stores where a wide variety of products are grouped in complementary product categories.The company maintains its uniqueness through its color startegy as its typical orange color became its brand identity, products and can be seen on signs, equipment and employee aprons. Home Depot differentiates itself from the rest by diversing and focusing on aprticular areas. They have a wide range of exclusive brands available in their sttores specifically for different purposes.

For example Hampton Bay is their brand for lighting, ceiling fans & patio furniture, Pegasus for kitchen and bath items, Glacier Bay for faucets and bath, RIDGID for power tools, Husky for tools, Vigoro for fertilizer & Ryobi for power tools, among others. Both Lowe & Home Depot hace the same style of Big-box stores to create the environment of a warehouse.

In order to differentiate and make a distinctive and better position Lowe has had the slogan of 'Improving Home Improvement.' Both Home Depot and Lowe have similar range of products where's Lowe differentiates in home appliances making it a senond largest home appliance chain after Sears. Pricing Strategy In retail business the overall pricing strategy could be high-end pricing philosophy because of unique products or wonderful customer service etc. Or low-end pricing philosophy due to low operating costs, special buys etc. Or medium pricing.

Companies like Wal-Mart Company offers low prices and when it comes to home improvement and low prices than the name of Home Depot comes to mind. It is because of their pricing that they adopted the slogan of 'The Home Depot, Low prices are just the beginning' in the early 1990's. Prices run 20 to 30% below those of local hardware stores. However, there are certain categories in which they charge premium prices for example Home Depot is expensive retailerswhen it comes to home construction supplies.

International Presence Home Depot has major presence in Canada other United States and has successfully established its business in the country. Before Home Depot Canadian home improvement market was ruled by Rona chain of stores which also has a number of branches all over the country. After penetrating the market Home Depot challenged the position of Rona and now is in cut throat competition with it as Home Depot also has branches in all of the provinces.

Lowe is also planning to enter the Canadian market this year adding competition in Canada as well. Home Depot also attained success in Mexico when it entered the market in 2001. As Home Depot became successful, they kept on opening new stores in the country. Lowe also has plans to enter the market of Mexico by 2009. Due to the proximity, Home Depot easily attained and managed success in both Canada and Mexico. Home Depot made a big decision and tried to exploit the growing market in China.

To enter the Chinese market, Home Depot adopted the strategy of acquiring an already established Chinese home improvement retailer the Home Way. "According to Home Depot, Home Way provided it with the right platform to build a business model that meets the needs of Chinese home improvement customers, while delivering profitable and sustainable growth" ('Home Depot purchases China's Home Way', 2006). With globalization affecting every business and maekets expanding from particular regions to the whole worls Home depot has eyes set on major European markets and other countries as well.

Marketing Strategy In order to avail the first movers' advantage Home Depot first adopted the slogan of 'The Home Depot: First in Home Improvement!'. Since Home Depot specializes in customer service they later adopted the slogan of 'You can do it. We can help'. Their advertisements and overall advertising startegy also revolves around the theme that you can do-it-yourself with help from Home Depot staff. Their overall budget is also distributed in a way that they give prime importance to customer service so that service remains its competitive edge.

Home Depot has believed in extensive advertisement especially when Lowe started gaining market share. "In year 2002, Home Depot spent $895 million on advertising, 9.5% more than the $817 million it spent in 2001.