Nardelli\'s Sweeping Initiatives, Culture Change

¶ … Nardelli's sweeping initiatives, culture change at Home Depot was inevitable. However, Nardelli underestimated the value that culture had, and its contribution to the bottom line. Nardelli felt that he could make all of his changes without dramatically altering the corporate culture, yet some of those changes such as HDTV had a strong cultural component to them. The road forward for Home Depot should focus on retaining or restoring the company's core cultural elements while simultaneously retaining many of Nardelli's business initiatives. The culture at Home Depot resulted in strong customer service that attracted customers. It was a differentiating factor for the company. With Wal-Mart already taking up some of the low end of this market, HD needs to retain strong differentiation in order to continue to attract customers. Therefore, Home Depot needs to focus on its culture, because that will continue to help drive growth, but it will also help to ward off competition from both Lowe's and Wal-Mart.

Home Depot's move to target professionals with wholesale is unusual given their competencies. Professionals do not need much staff advice -- they simply need selection and price. The core competencies that deliver these are in logistics and purchasing. Therefore, for Home Depot to effectively move into this market they need to focus on improving their performance in those areas. The company needs to cut its back-end costs. The company also needs to shift its brand image as well. This is difficult, because Home Depot cannot sacrifice the DIY market, of which it still holds a significant market share. The separate stores may help, but it would be easier if Home Depot could incorporate the professional market into its existing stores, to take advantage of its current purchasing and logistics efficiencies as well as its existing real estate holdings. The professional market should not be courted at the expense of the DIY market.