Home Depot Response to COVID 19

Home Depot and the Pandemic
The novel coronavirus (COVID 19) has affected business operations across the globe because of the health and safety risk it poses. As the virus continues to spread and affect many people across the globe, governments have been forced to undertake measures that seek to protect people’s lives and properties. Measures adopted by governments have not only affected people’s normal lives, but also disrupted business operations. Additionally, businesses have been forced to make a series of changes in their operations in order to enhance the health and safety of their customers, workers and associates. Home Depot is an example of a business that has transformed its operations in efforts to adjust to the impact of the global pandemic. This paper explores how Home Depot is adjusting to the pandemic through changes in its operations. The exploration is based on application of relevant management theories and business strategies.
Impact of the Pandemic on Home Depot
As previously indicated, COVID-19 global pandemic has significantly disrupted people’s lives and businesses as it continues to affect many people worldwide. Home Depot is an essential retailer to the communities it serves and is ranked the top U.S. home-improvement retailer. Throughout its operations, the retailer has experienced tremendous success reflected in its profitability over the years. However, the retailer’s operations have been significantly affected by the global pandemic despite its commitment to keep its stores open as it has always done during times of natural disaster and crisis (Home Depot Product Authority, 2020). The organization strives to keep its stores open amidst the pandemic because homeowners and businesses rely on it for various services. While the pandemic continues to affect business operations, the retailer’s customers rely on it for urgent needs/services like electrical and plumbing repairs, hot water heaters, and refrigerators. Additionally, homeowners and businesses rely on Home Depot for harsh weather products like batteries, tarps and propane.
Even though the company recognizes the significance of keeping its stores open for customers, it has been forced to make temporary changes in operations. In this regard, the pandemic has impacted Home Depot by generating temporary changes to operations. The retailer has made these changes in efforts to enhance the health and safety of its customers, workers and business associates. Moreover, the pandemic has contributed to a significant decline in the number of customers visiting the retailer’s stores. The sharp decline is attributable to various factors including the stay-at-home measures adopted by the government and changes in consumer spending. The health and safety measures adopted by the government has forced people to increase expenditure on food and health items, which has significantly reduced the number of visitors to Home Depot’s stores. On its part, Home Depot has limited the number of customers allowed inside its stores at the same time in order to promote social distancing, which is one of the protective measures against the virus (Cheng, 2020).
Home Depot’s Business Approach
The impact of COVID-19 has forced businesses, particularly retailers like Home Depot, to adopt different business approaches and strategies as they attempt to remain profitable. Businesses can no longer operate normally because of the impact of health and safety measures established by the government. For Home Depot, the adoption of safety measures is one of the steps toward demonstrating its commitment toward ensuring the health and safety of its associates, workers and customers. In addition to limiting the number of customers permitted inside its stores at the same time, Home Depot has adopted other safety measures like conducting employee temperature checks and availing hand sanitizers to people who visit its stores. This business organization considers the implementation of the safety measures as an important step toward demonstrating its social responsibility amidst the pandemic.
However, Home Depot’s measures to remain operational and profitable during the global pandemic have involved changing its business approach and strategy. Home Depot has adopted a business approach that is based on Core Competence Theory. In this regard, Home Depot capitalizes on its provision of essential products and services to keep its stores open. By providing these products and services, the company meets the needs and demands of its customers. Core Competence Theory is a management theory in which business capitalize on their strengths and key functions/areas to remain competitive. According to Kawshala (2017), a business’ core competency can assume various forms including close relationships with suppliers and customers, reliable processes, and unique products.
During this global pandemic, Home Depot has relied on two major competencies to remain operational and profitable. These core competencies has shaped the retailer’s approach to business in addition to health and safety measures. First, the company relies on its core competencies of essential products and services. The retailer has remained opened to the public at a time when other retailers/competitors have closed because of its role in offering essential products and services. For example, Home Depot provides face masks to its customers, which have become essential products in the fight against the spread of coronavirus. As part of its efforts to contribute toward the fight against the spread of this virus, Home Depot has included a “Stop Sale” sign on all N95 masks in the store (Cheng, 2020). Moreover, the firm has redirected all shipments for these products to be directed to healthcare providers, hospitals and first responders. Consequently, Home Depot continues to capitalize on this core competency of unique products and services to continue operating amidst the pandemic.
Secondly, Home Depot relies on its core competency of close relationships to domestic suppliers to continue operating. Many retailers in the United States like Walmart rely on China for inventory. On the contrary, most of Home Depot’s products are sourced locally. While some of the company’s power tools and hardware come from China, a significant number of its inventory are source locally. This gives Home Depot an advantage and key strength to remain operational and profitable during the global pandemic. The retailer is not forced to find more expensive inventory or hasten shipments from emerging markets because of its reliance on domestic suppliers for its inventory.
These two examples of Home Depot’s strengths demonstrates the significance core competencies play in the firm’s current business approach. The retailer has successfully transformed these core competencies into capabilities. Kawshala (2017) states that capabilities in strategic management refers to critical resource that a company can perform in comparison to its competitors. For Home Depot, essential products and services act as critical resources it can perform or provide in comparison to other retailers. Through these capabilities, Home Depot continues to gain competitive advantage over its rivals at a time when the virus continues to interrupt business operations and profitability.
Home Depot’s Business Strategy
Since Home Depot has leveraged its core competencies/strengths to remain operational during the pandemic, the business strategy adopted by this retailer is differentiation strategy. Putra, Sudarmiatin & Suharto (2018) states that differentiation is a critical factor for business success in today’s environment that is characterized by intense competition. Differentiation strategy entails creating products/services that are unique in certain aspects valued by the customer. Differentiation can be based on the product/service itself, how it is delivered to customers or the marketing approach. Companies that adopt differentiation strategies obtain competitive advantage through the uniqueness of their product/services, product/service delivery or marketing approaches.
Home Depot has consistently utilized differentiation strategy to obtain competitive advantages over its competitors. The retailer collaborates with supplier partners to bring exclusive innovative products in its stores (Trefis Team, 2017). This has had significant positive impacts on its profitability and market size as it attracts more customers to the business. As part of this differentiation strategy and efforts, Home Depot focuses on products that can save time and money for all its customers. During this global pandemic, the company has maintained its differentiation strategy as a key factor for continued operations and profitability. However, the company has differentiated itself from its rivals by increasingly focusing on providing essential products and services. The focus on essential products and services is a key aspect of its differentiation strategy that has helped maintain its operations amidst the pandemic. At a time when many retailers are forced to close, Home Depot’s provision of essential products and services is a major component of its differentiation strategy. This component has provided the retailer an opportunity to adjust to the impacts of the pandemic.
In conclusion, coronavirus is a global pandemic with significant impacts on people’s lives and business operations. Businesses across the globe have been forced to change their operations in efforts to curb the spread of this virus and mitigate its impacts. Home Depot is a retailer whose operations have been affected by this global pandemic. The company has responded to the pandemic through adopting a series of health and safety measures as it shows concern for the wellbeing of its associates, customers and workers. In addition to these health and safety measures, Home Depot has adjusted to the pandemic through adopting new approach to and strategy for business involving leveraging on core competencies and differentiation.
References
Cheng, A. (2020, April 1). Walmart, Home Depot Implement Safety Measures Amid Coronavirus Pandemic. More Companies Should Follow Suit. Forbes. Retrieved April 29, 2020, from https://www.forbes.com/sites/andriacheng/2020/04/01/walmart-home-depot-did-the-right-thing-on-this-front-to-flatten-coronavirus-curve-more-companies-should-follow/#60e61a9a24d3
Home Depot Product Authority. (2020). COVID-19 Update: How Home Depot is Responding. Retrieved April 29, 2020, from https://corporate.homedepot.com/newsroom/covid-19-update-how-home-depot-preparing-and-responding
Kawshala, H. (2017, February). Theorizing the Concept of Core Competencies: An Integrative Model Beyond Identification. International Journal of Scientific and Research Publications, 7(2), 253-256.
Putra, Y.S., Sudarmiatin & Suharto. (2018, April 23). Analysis of Differentiation Strategies to Create Competitive Advantages in Facing Global Markets. In The first international research conference on economics and business, 254-269. DOI 10.18502/kss.v3i3.1888
Trefis Team. (2017, May 30). A Closer Look at Home Depot’s Growth Strategy. Forbes. Retrieved April 29, 2020, from https://www.forbes.com/sites/greatspeculations/2017/05/30/a-closer-look-at-home-depots-growth-strategy/#6c6e177b2e76