Strategic Evaluation for Home Depot, Inc. Strategic

Strategic evaluation for Home Depot, Inc. strategic evaluation Validating the organizational vision, mission and values statements for Home Depot will require several different approaches. McMillan and Hausler (2011) explain that not all mission goals can be explained quantitatively, and several of HD's values will require qualitative evaluation, such as "Doing the "right" thing" or "Respect for all people" (The Home Depot, 2011).

I will evaluate these qualitative goals by analyzing the mission statements for the different divisions within the firm, to identify performance measures that can then be ranked within the units over time and between the firm and other major competitors. "Respect for all people" could be measured, for example, by comparing the number of discrimination complaints in hiring or from consumers over time, and comparing that (negative) growth rate against the industry.

"Building strong relationships" will likewise be demonstrated through percentage of return visits using consumer credit flows applied for and then utilized. This will support evaluation of "Excellent customer service." Equity growth will demonstrate shareholder value and ranking employment compensation against competitors will reveal how effective HD accomplishes these more directly qualitative values.

M3Planning (2010) point out that environmental analysis requires identification and analysis of broader market trends affecting inputs into, through and transmission from the value chain relative to appropriate competitors, but "it is easy to get bogged down in an extensive, broad survey of trends" (M3Planning, 2010). These trends range from macroeconomic and regulatory, to technology and international capital flows that drive input resources. Ultimately, environmental analysis requires internal analysis to determine positioning once potential future trends have been identified.

In the case of Home Depot, I will set up a system to monitor and predict future input commodity price moves for raw materials and distribution, where raw materials includes labor, i.e. food costs and costs of living as well as transport and energy inputs throughout the value chain. The Conference Board's index of leading economic indicators provides ten useful and concise tools to predict demand for HD's products, particularly relevant for the construction and remodeling sectors.

Likewise these indicators will help predict wage demands since labor is a major input cost to most departments. Falling unemployment claims and/or rising energy costs will predict increasing wage demands and competition, for example. These will be moderated through our own product cycle depending on current inventory and stocks ready to use, which is where environmental and internal scanning meet and interlock. The environmental scan will compare predicted effects on Home Depot against the same change effects on our major competitors in the sector.

This will reveal the opportunities arising from threats to these relative strengths and weaknesses. The internal environmental analysis identifies strengths and weaknesses within and across different departments or silos. Overall strengths can be analyzed from the top down using financial performance indicators, specifically return on assets and equity; current, debt, asset turnover and stock value ratios, with others conveniently presented through Investopedia (Loth, 2011), analyst opinion and fundamentals analysis.

These will indicate performance advantages and weaknesses for "core competencies" that Purdue (2002) argues are often difficult to quantify (slide 4), but that provide the firm's competitive advantage (Purdue, 2002, slide 6). This requires identifying the different silos through the value chain, from procurement to marketing and delivery, and support activities in procurement, human resource management and procurement. The financial ratios identify weaknesses in any of these stages in final margin, so that improvements in policy and procedure can be identified and addressed through the strategic planning exercise.

In this case these will be derived from the annual report and information available through the Home Depot corporate investor relations resources. The internal environmental scan will also develop measures to rank intangible strengths and weaknesses usually valued under "goodwill" on the 10K if at all, that are difficult to quantify but drive brand loyalty, placement or innovation for example and make up core enough competencies to show up in the HD value list.

Corporate citizenship can be measured over time as increasing or decreasing; by consumption of renewables and sustainable input and product mix, and other factors that will emerge from the research that drive customer loyalty and relationship in ways that show up in the more quantitative balance and cash flow sheet performance ratios. These components for different divisions comprise the total corporate strengths and weaknesses, which,.