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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…… [Read More]
Home Depot is one of the prominent and successful retailing companies in the United States. In particular, the company deals with the provision of home improvement supplies including tools, construction merchandises, kitchen appliances and the like. One of the key elements impelling Home Depot’s success is its financial strategy. The main financial strategy of the company is cost minimization. On the basis of the cost leadership generic strategy, the company’s financial goal is cost minimization. Moreover, the strategic goal and objective of Home Depot encompassing the development of close and special affiliations with suppliers aid the firm in accomplishing cost minimization (Smithson, 2017).
Total Assets, Total Liabilities and Total Stockholders’ Equity Comparison
In accordance to the balance sheets for the two financial years, the total assets of the company decreased from $41,164 to $40,877 whereas the total liabilities also declined from $23,387 to $21,484. I believe that the…… [Read More]
The article “Remodeling HR at Home Depot” by Robert Grossman (2008) describes the effect that Home Depot’s slashing of more than half its HR work force had on the company. 1,200 human resource managers were cut from the staff. Describing an HR manager in every store as a luxury that they simply could not afford to have any longer, Home Depot decided to take a new, low-cost approach to addressing human capital issues.
Pros and Cons
Prior to the 2008 economic crisis, Home Depot’s HR had advocated a bottom-up approach to management, with consultations, incentives and stock benefits offered routinely to employees. It had been a good approach while the firm was expanding. But when contraction hit, HR needed to trim its sails and reorganize. As such, there were pros and cons of Home Depot’s revamping of its HR function. The pros were that the reduction in staff…… [Read More]
Retail Operations Analysis
A Comparison and Analysis of Company-Specific Strategies used by Lowes and The Home Depot
The two biggest firms operating in the retail space that targets the home improvement niche are Lowes and the Home Depot. These two firms essentially dominate the industry with Home Depot accounting for nearly sixty percent of total revenues, and Lowe's capturing a bulk of the rest (about 39%), but there are number of smaller firms that also target specific market segments as well as various local markets that all compete for a smaller share of the market. In this industry there is not a great deal of opportunity to create a strategy in which product differentiation can offer a competitive advantage. For example, most stores carry either the same product mixes, or products that could be considered direct substitutes, and most of the consumer preferences will be related to price,…… [Read More]
Home Depot, Lowe's and the British company olseley are three of the major companies in the building materials retailing industry. This paper will compare the revenues of these three companies over the past five years to gain a sense of how they have been performing. The prevailing economic conditions have been negative for the industry, since the industry is heavily dependent on the health of the housing market (Isidore, 2012). ith only in recent months there having been signs of improvement in the U.S. housing market, none of these companies are expected to have enjoyed much success over the course of the past five years. This paper will, using income statement data, analyze how well each of these companies has weathered the economic downturn.
Home Depot earned revenues of $70.395 billion in FY 2012, an increase of 3.5% over the previous year. However, the current level…… [Read More]
Home Depot, Lowe's and olseley are all companies in the hardware store business. Home Depot and Lowe's are primarily American while olseley has operations in a number of different companies but has its home market in the United Kingdom. All of these companies are highly susceptible to the economic conditions surrounding the housing market and the general health of the economy overall. This paper will focus on how these companies have fared in the past few years, specifically with reference to their statements of cash flows.
Cash Flow Analysis
For Home Depot, the most significant source of cash is from operations. Cash flow from operations contributed $6.651 billion in the 2012 fiscal year. Most of this derived from the net income. In all of the past five years, the company received most of its inbound cash from operations. In FY2008, this was the only year where Home Depot…… [Read More]
Home Depot has recognized many key factors to ensure that talent is kept in their pipelines. One of these is the embedded understanding that human capital drives talent management. Human resources goals at home depot are directly tied into the overall strategic operating plans of the company with human capital at the heart of all human resource strategies. Home Depot was able to recognize that human capital was vital to their success as they were a company that relied on its employees to give the customer an exceptional experience not only ensuring a sale in the current moment but also the return of the customer for future needs (oush, 1999).
Home Depot has learned to be successful in managing an ever changing workforce by understanding the demographic changes and increasing diversity and taking advantage of these trends in the workforce. This has been accomplished through the engagement of specific labor…… [Read More]
In short, the Caterpillar organizational structure was leading the company into a less competitive position from both an operating costs and time-to-market standpoint. This immediately affected the financial performance of the company, making it less profitable. The structure of organizations often follows a highly functional path, where manufacturing is centralized and each supporting functional area is integrated at the process level to production centers. For Caterpillar, their market had grown too diverse for a centralized manufacturing-based strategy to deal with. What Caterpillar decided to do was completely redefine its organizational structure with the concepts of lean manufacturing, time-to-market and demand-driven supply chains as the cornerstone of the new organization (Kee, 2003).
Chairman and CEO Fites chose to define a more market-driven structure for the organization, while also infusing each division with profit & loss responsibility and ownership of their individual product roadmaps and production plans. Supporting the 14 product divisions…… [Read More]
Talent Practices at the Home Depot
Home Depot Questions
Discuss how the leadership at Home Depot intended to use its organizational talent to gain a competitive advantage in the Do it Yourself industry.
Home Depot has revenues of over $90 billion, is the number one home improvement retailer globally, and is the second largest retailer overall. It was founded in 1979 and is now international (www.homedepot.com). The way they have chosen to use their own organizational talent to gain a clear competitive edge is by promoting from within, 80% of their leadership placements are internal, and allow the expertise of individuals who have worked in multiple departments to grow into higher level management positions. In particular, Home Depot endeavors to hire any vacancies at the supervisor, assistant manager, and store manager level from within. They believe that this ensures that not only the company culture is served, but that the…… [Read More]
organizational approaches, it is easiest to start with the classical approach, mainly because the focus is different here: if for the two latter approaches, the focus is on the human resource, on the employee, in the case of the classical approach, the focus is on the manager and on the management process. The classical approach proposes principles of management that should guide the manager in the decision making process, as well as in the subsequent implementation phase.
The number of principles varies, depending on the different authors who have worked on this approach, ranging from the three principles proposed by Mooney and Reiley (the principle of co-ordination, the scalar principle and the functional principle) (Mooney, Reiley, 1947) and the fourteen principle that Fayol has put forward, with his own admission that there is, in fact, no limit to the number of management principles.
Perhaps the most important difference between the…… [Read More]
Culture Change & Leadership
Home Depot culture change under Robert Nardelli
Robert Nardelli joined home depot in 2000 and found an organization that was largely successful indeed it had a 20 years growth record and was beating other competitors like Wal-Mart in the market. However, there was underlying approaching financial and operational problems that would in the near future drag it downwards. Robert Nardelli had the challenge of changing the culture of the organization so as to evade these two major challenges in the future, this was worsened by the backdrop of the closely knit and freewheeling existing culture that had been installed by his predecessors.
Robert approached the culture change challenge in two major ways; personal leadership and encouraging employees as he put ultimatums. He needed to change the organizational culture and immediately brought in a former colleague at General Electricals Dennis Donovan to be his head of Human…… [Read More]
Financial esearch eport: Home Depot
For stakeholders and investors, financial analysis is of great importance as it enables them to evaluate and assess a company's performance and financial health from different perspectives. One of the important aspects is financial ratios deemed important in the financial analysis of a company. Financial ratio analysis encompasses different aspects of business performance for instance profitability, efficiency, leverage, liquidity and so on. This financial research report aims to analyze the financial performance of Home Depot, Inc. which is a publicly traded company centered in the United States. Home Depot has been selected as an investment opportunity for a client and this report seeks to provide the rationale of selecting this particular company and offering as much information as possible about this company in order to explore the merits and risks in its consideration as an investment opportunity (Home Depot, 2015).
Home Depot Inc. is…… [Read More]
The Home Depot Inventory Control
Every company that keeps a certain amount of product or raw material on hand needs a method for controlling the inventory of that good. In a retail setting, it is even more critical than it would be in a manufacturing one because of the small margins under which most retailers work. Because the inventory in a retail store is the lifeblood of the operation there needs to be a concerted effort to manage what the company has on hand and what they will need for the future. One of the largest retailers in the world, The Home Depot, has developed a system that allows them to operate at small margins while maintaining a profit. This essay will discuss the type of system that is used and how it is effective for the giant retailer.
According to Supply Chain Digest (2007), The Home Depot…… [Read More]
In order to answer the main question of the price to be paid within one year time for 100 shares of the company, it is important to know the price of one share at that point of time based upon the past performance of the shares and its' expected movements. If compared the price and performance of the Home Depot shares since 1984, which is the time since when the sahres were actively traded on the market, with the performance of the Standard & Poors index, the shares sometimes were outperforming the market while sometimes were underperforming.
Simplistic examination of the chart of the perfromance of the shares compared with the index perfomance can leas us to the conclusion that the company beta is greater than zero and in case of further positive market performance and strengthening investment opportunities, the company is expected to be doing well which…… [Read More]
The following table lists the executive employee compensation for Home Depot in for 2008.
Home Depot Executive Compensation
Source: Home Depot (2008)
It is clear from the long-term goals set out by Home Depot that the desire to build ongoing relationships with its employees is one of the primary focuses of Home Depot in terms of its business strategic goals. Home Depot believes that goals should be set and attainable although not automatically realized but requiring focus and commitment and excellence in order to reach these attainable and highly lucrative goals with cash payment and on a certain foreseeable date in the future and even in the very near future.
Home Depot has integrated and continues to integrate into the community in which it is located and employing individuals in those communities and for those employees who are committed to the organization the rewards exist and in handsome measure…… [Read More]
In the case of Home Depot, the specific reasons that cost-cutting was advisable were not functions of the devotion of excessive resources to expansion. In all likelihood, the advisability of the simultaneous foreign expansion efforts and cost cutting was unrelated to the need for cost cutting. In that case, the underlying reasons for cost cutting would have been able to be addressed largely irrespective of simultaneous expansion costs.
Was Home Depot's corporate strategy (both domestic and abroad) a success?
One could argue strongly that certain aspects of Home Depot's strategy have been much more successful than others but that even some of the organization's efforts that failed do not necessarily militate against the conceptual value of those efforts. With respect to expansion into new markets, the apparent approach adopted to research new potential markets through pilot stores would appear to have been highly successful. Meanwhile, the failure of ides such…… [Read More]
HOME DEPOT'S BLUEPINT FO CULTUE CHANGE
Start reading Harvard Business eview (HB) article: Charan, . (2006). Home Depot's Blueprint Culture Change. Harvard Business eview, April, Vol 84 Issue 4 p. 60-70. Assignment Expectations (Content) Based HB article Charan (2006),pages paper
Home depot's blueprint for culture change
Steps the team took to make the change
The Home depot team undertook four main steps to ensure that the company changed its mechanisms are metrics, processes, programs, and structures. Metrics involved describing the company values and making it clear what each person would be accountable for Charan, 2006.
This way each employee and manager would understand their role within the company and work as a team. Metrics also provided measurement data in areas that had never been measured before. The data revealed some discrepancies towards the company's held beliefs. Employee performance reviews were not standardized. Using the metric system the team implemented a…… [Read More]
These are subordinated, however, to the primary functional units within HD's organizational structure are Merchandising, Human Resources, Enterprise Program Management, Retail Finance, it, and Investor Relations. After these functional breakdowns, there are several sub-breakdowns, but the bureaucratic, hierarchical structure is maintained.
Home Depot's management team is in a state of transition. The bulk of their Board and Executive group have been brought into their current positions within the past two years. The longest-serving member of Home Depot's executive team is Ricardo Saldivar, President of Home Depot Mexico, who ascended to that position in 2006. The group is overwhelmingly white and male, but each team member has significant experience in the corporate world. Thirteen of 15 Board members are independent, and each has substantial business experience.
The competitive profile matrix vs. The main competitor, Lowe's, illustrates Home Depot's strong market position. Smaller competitors were not included because they are simply not…… [Read More]
Home Depot Products
hat motivated producers to create the products that Home Depot sells? Author Lexis Higgins explains that when it comes to creating new products to market, there is what he calls an "ideal climate" for "new product development" (NPD). The motivation must be there in order to follow these guidelines: a) "goal clarity" (well understood objectives for the product); b) "resources" (there must be adequate economic and other forms of support for the project); c) "encouragement" (emotional support for the launch must be a driver); d) "freedom" (the flexibility and ability to take the project in any direction); and e) "integrity" (management does what it says it will do) (Higgins, 2007).
The company involved in developing the product needs more than motivation and vision to make their product successful. To start with there should be "idea generation" (an informal session can come up with ideas; it doesn't have…… [Read More]
Tapping into consumer needs, wants, and purchasing tendencies could present a challenge due to the country's size and diverse population in terms of taste, preferences, and purchasing power. The need for more interior home products is going to be critical to the company's growth
Driving up square footage growth globally. According to DataMonitor (2006) Home Depot's weaknesses include a declining sales per square foot, which is forcing the company to look at smaller-store footprints during acquisition strategies. The focus on driving up same-store sales internationally is critical for Home Depot, and this is another major motivation for the company to pursue a more joint-venture based approach to acquisition than a pure buyout.
Accentuating global strength in supply chain and logistics. Third party logistics service suppliers are still relatively underdeveloped in China, and as a result, Home Depot will need to focus on bringing their significant expertise in supply chain management,…… [Read More]
com TV, a station accessible by Internet that would present clients with viable information on the company and their products. More importantly, the television station would offer advice and demonstrations on how to install the items purchased on your own, without the assistance of home improvement specialists.
The desired consequence of all these opportunities, as well as other strategies, is to increase the market share and revenues. However, all options include a certain level of risk that could generate unfortunate results. That is why, prior to making a decision, management, marketing and financial departments need to analyze the opportunity from several view points.
3. Long-term objectives on profitability, competitive activities, technological and market leadership, as well as the social and environmental responsibilities of the company
Aside from the general long-term objective of increasing their market share and revenues, the managers at Home Depot desire to become among the strongest international…… [Read More]
Home Depot is a retailer of home improvement supplies, and Lowe's is its biggest rival. Both are very large companies, and they have a lot of similarities. Both companies competes only in this one industry, focused on big box retailing of home improvements and home finishings. These are considered to be category killers, in that once they enter a market few other firms can exist in that market selling the same items. Both companies compete with low prices, and Home Depot especially tries to deliver a high standard of service as well. Home Depot is the larger of the two, and it also has international operations, something that Lowe's does not have at this point. This paper will compare the financials of these two companies. The income statements and balance sheet data will be attached in Appendix A.
It should be noted that all -- all -- financial data used…… [Read More]
Home Depot and Management Tool
• Company background -- must include sales and employment data. Products or services provided. ize vs. major competition.
The Home Depot (NYE: HD) is the world's largest home improvement chain and the fourth-largest retailer of home improvement and construction products and services. Founded in 1978, Home Depot has about 2,500 locations in each of the 50 states as well as in the 10 provinces of ten provinces of Canada and in Mexico and China. It also operates an online company. The company's headquarters are in Cobb County, Georgia, in Greater Atlanta and its CEO is Francis Blake.
Home Depot targets the do-it-yourself (DIY) and professional markets with its selection of some 40,000 items, including lumber, flooring, plumbing supplies, garden products, tools, paint, and appliances. Home Depot also offers installation services for carpeting, cabinetry, and other products. (Hoover.com)
According to Forbes.com:
The Home Depot stores sell…… [Read More]
Stocks have fluctuated in exactly the same way. The Home Depot went up 1.46% during the first week, while Lowe's managed to go even further: 1.74%. The situation was quite the same during the second week: 1.41 for the Home Depot, and 1.11% for Lowe. The upward trend was maintained for three weeks, but the growth ratio was only 0.5-0.57. The fourth week was not so good for the two companies. Stocks went down 0.6% and 0.86%, respectively. The fifth week was not better, as the downward trend continued, but the percentage change was not that significant: 0.5%-0.6%. The stocks are currently at higher levels: $41.06 for Home Depot and $65.22 for Lowe's. Morningstar analysts estimate the fair value of the two stocks at $44 and $62 respectively.
1. Morningstar Analyst report on the Home Depot www.morningstar.com
2. Morningstar Analyst report on Lowe's www.morningstar.com
3. Information on the business…… [Read More]
Audit Planning Control
The American Institute of CPAs (AICPA) has published guidelines for preparing an audit plan. The first step is the preliminary engagement activities, which is focused on establishing an understanding of the terms of engagement for the audit. The steps in the planning process are to identify the scope of the audit; to determine the reporting objectives; to consider the results of the preliminary engagement and to determine the resources that are going to be required to conduct the audit -- and the timing of when those resources will be needed (AICPA, 2015).
To audit Home Depot, it is important first to determine what the scope will be, as this will help to determine the resource requirements. A preliminary meeting with the company will help to determine this -- for example is it necessary to visit stores? Conduct inventory? Talk to Canadian HQ? Or is a visit to…… [Read More]
Strategic evaluation for Home Depot, Inc.
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 "espect 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. "espect 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…… [Read More]
At the same time, this has led to a search by customers for low priced material.
It is clear that every person is interested in stretching their investment in these matters as far as possible, and for this there are many methods. However for this to be done well, the concerned person has to spend a lot of time in searching for true items of value and not just buy any item that the person finds in the shop as ready purchases may be regretted later. Thus there has to be a lot of visits to different stores and proper judgment of the material that one intends to buy later. The places for such purchases are for interior design and most likely to be found in second hand furniture stores, seconds depots, and discount stores. If an individual goes around in a substantial number of these stores, then the person…… [Read More]
The other competitors of the company are Corporate Express, Inc.,IKON Office Solutions, Inc., Wal-Mart Stores, Inc. And United Stationers Inc.
3. Analysis of potential new entrants
Threat of new entrants (Source: Datamonitor,2007)
The threats of new entrants into new entrants in this industry are noted to be very string. This is because most of the supplies are in the form of commoditized products that never benefit greatly from the brand loyalty. This when coupled with the low end-user switching costs as well as easy access to the suppliers and distribution channels makes it very conducive for new players to come into the market. The market is however very stagnant at the moment and this reduces its attractiveness to the potential new players.
4. Analysis of substitute products
Substitute products (Datmonitor,2007)
An analysis of threat of substitutes within this sector is moderate. This is because most of the modern companies are…… [Read More]
25 per share on the initial offering date in 1961 and held as a long-term investment. The original 100 shares has grown to 48,000 shares through stock splits and stock dividends. And this does not include the reinvestment of cash dividends.
Bought 100 Shares
100% stock dividend
2 for 1)
2 for 1)
3 for 2)
33 1/3% Dividend
4 for 3)
3 for 2)
3 for 2)
5 for 3)
2 for 1)
2 for 1)
2 for 1)
2 for 1)
Lowe's has been a publicly owned company since October 10, 1961. Its stock has been listed…… [Read More]
New Product Development
Nanda Home, in 2011, is starting to struggle. The company basically has a single product, Clocky, that has been on the market for several years. The company has in this time introduced some variants on the alarm clock theme, but has yet to be successful in any other business. The founder, Gauri Nanda, is unsure of what the next step should be, given that she is unsure of what the issues are with the company.
The current situation is that the flagship product, Clocky, is nearing the end of the normal product life cycle in this category, something that is evidenced by the fact that prices are falling to spur demand, and that the company is frequently selling to existing clients. The two newer products also seem to appeal the most to existing clients. Nanda Home had introduced a line of bags, but this venture failed for…… [Read More]
Home Depot: Training and Skills Needs Assessment
Training Needs Assessment Process
The objective of this work is to conduct a Training Needs Assessment on Home Deport. Included in this will be an organization, task and person analysis. The techniques used will be related as well as will be the individuals involved in the process. Conclusions will identify the desired training outcomes.
According to one report training practices assist companies in gaining a competitive advantage. Stated as issues that affect companies and influence training practices are such as: (1) customer service; (2) employee retention and growth; (3) doing more with less; and (4) quality and productivity. (Noe, 2005) It is reported that training practices have enabled Home Depot to: (1) grow the business; (2) improve customer service; by making provision of employees with the necessary knowledge and skills to become successful. (Noe, 2005) It is reported that Home Depot…… [Read More]
(Morningstar "Office Depot" at (http://quicktake.morningstar.com/stocknet/Snapshot.aspx?Country=USA&Symbol=ODP)
One option could be for office depot to streamline sales to just a few online locations, linking market seekers to a few key websites that offer a very large product base for sale. Yet, to continue domestic market growth and potentially increase domestic sales OD must focus on impulse shoppers seeking to purchase small quantities for small business, and offer items for individual sales, in very simple formats. The inventory of a large one stop brick and mortar store must be expanded, without the loss of key, potentially outdated supplies, while still offering competitive prices on staple supplies. OD must continue to aggressively market the convenience and ease of their stores, with highly effective and informed sales associates that can easily step away from their post to rapidly find the items the customer is seeking. It is crucial to the domestic market that OD offer…… [Read More]
Home Depot is a "category killer" retailer, selling supplies for home and garden. Home Depot operates with a cost leadership strategy, as it seeks to use its buying power in particular to offer customers a low price. Home Depot also incorporates a service element to its business model, something it hopes will give it a competitive advantage. Home Depot is currently undergoing a change in terms of its structure and culture, and this has caused some disruption. That said, Home Depot is the second-largest retailer in America behind Wal-Mart and has experienced strong sales improvements during the Nardelli years.
The competitive situation is intense. Home Depot is a dominant competitor in the industry, but faces strong competition from Lowe's, which is almost the same size. These two competitors operate as something of a duopoly, although in other businesses there are specialist firms that are strong competitors.…… [Read More]
social media plan a company organization. There restrictions company choose. The organization a small company (a local company a modest web presence ) a larger company, plan replicate company, choose a company room improving social media strategy.
Social media plan for Home Depot
Home Depot is one of the favorite stores of the American population, having established a powerful name within the communities. The company also operates outside the United States, through stores located in Mexico, Canada and China. The format of Home Depot is that of large size stores, where customers can buy virtually any home related products, including gardening tools, furniture or remodeling materials.
The success of the organization is due to a multitude of elements, such as the positive relationship established with the customer, the strong financial results obtained by the firm, the powerful managerial model, the strength of the brand or a powerful internal culture (Davila,…… [Read More]
5%; Shares Fall (Update11)) Thus the company Home Depot is for serving both the new construction and maintenance/repair/upgrade necessities from lumber to carpeting to light bulbs to lawn care in the year 2005. (a Case for Home Depot) Home Deport is required to search out if there is any after sales consideration. There should be a scope of concentrating on smaller stores that are more consumer-friendly. That would also permit them to expertise in the niche categories like lawn or business. (How to evive Home Depot: The nation's second-largest retailer needs to jump-start growth)
3) Buy suppliers - Eliminate middle man supply chain example lumbar
The brokers and middle-men are conveniently been avoided by the Home Depot with direct purchasing from manufacturers and supplying the wares to various stores on their own. This assists in reducing the price of the ultimate sale a little. This process is considered to be…… [Read More]
Non-Price Competition BETWEEN HOME DEPOT AND LOWE'S
The Home Depot was founded by Bernie Marcus and Arthur Blank. They opened the first Home Depot stores in Atlanta on June 22, 1979. The first few stores were later attached to Treasure Island stores, stocking around 25,000 products. Today, on average, Home Depot stores are large covering an area of approximately 130,000 square feet, and offering between 40,000 and 50,000 products. While the initial motto of the company was to provide the products at the cheapest price, later on the company began to provide hands-on training for attracting the customers from various walks of their lives (Howell, 6).
The Home Depot grew to encompass stores in Georgia, Florida, Louisiana, Texas, and Alabama within the first 5 years and this growth continues to this day.
Home Depot's approach is simple. It opens massive stores (130,000 square feet, on average) at different locations and…… [Read More]
The firm's balance sheet, however, is very healthy, with great liquidity and no long-term debt.
The fourth largest company in the industry by market cap is Builders FirstSource. This company has a stock price of $5.31. It has no P/E, since it is losing money. The company is focused on products for residential construction in the southern and eastern states, so the housing recovery needs to be in those regions for this company to benefit. The consistent losing of money, however, makes this company a risky investment, as does the high level of long-term debt. The beta is 2.3, which is highly volatile.
The fifth-largest company by market cap is Orchard Supply Hardware Stores, which is a California-based competitor to Home Depot and Lowe's. Its stock is priced at $10.11. The company lost $8.08 per share last year and is on a downward trend in revenue, gross income, operating income…… [Read More]
Talent Practices in HR
Home Depot has long recognized the value of talent management, for a number of reasons. This has led them to a policy of promoting from within, especially for their front-line managers. The company believes that its front-line managers and staff give it a competitive advantage in the do-it-yourself industry because this talent increases the talent level of the workers, improves customer service, and allows the corporate culture to be better disseminated through the organization.
The company's hiring policies, in particular with respect to the talent pipeline, are focused on hiring and retaining the workers that are best able to meet the challenges and objectives of the human resources department. Home Depot believes that if it provides a high level of service to its customers, for example, that this will give it a competitive advantage in the industry. It found that certain types of workers (older, ex-military)…… [Read More]
The company needed greater agility in managing how it responded to customer demands, and also needed to have much greater control over inventory management as a process as well. In responding to these strategic weaknesses in the company, Mr. Nardelli invested $1B in new information systems and created entirely new information systems platforms for the more efficient sharing of sales data between stores and with regional and worldwide headquarters in Atlanta. As a result of this system, Home Depot was able to capitalize on the building boom of the 1990s that lasted into the 21st century, and soundly beat their financial estimates of performance as a result. These systems were also directly responsible for the company gaining market share over Lowes' and other do-it-yourself chains globally as well (eingold, 2008). The use of it as a strategic advantage, combined with its reporting accuracy of key metrics, was used by Mr.…… [Read More]
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…… [Read More]
Customer Service Triage at Home Depot
Despite the self-service checkout lanes being staffed by an associate to manage all four of the self-service locations, with custom orders and big-ticket items they had to inevitably get the store manager involved to alleviate the conflicts with customers. The time required to resolve both the custom orders and big-ticket purchases actually took more time for customers than it would have taken to just go through the traditional checkout lanes. The lack of information workflow, process, pricing, and employee knowledge of the processes was evident by watching the series of transactions completed. The triage or problem solving of the store manager took an inordinate amount of time to troubleshoot the pricing discrepancies on the service contracts alone would have made it much simpler to have also gone through the traditional check-out lanes. The more complex the transaction the greater the need for Home Depot…… [Read More]
Change Management Scenario
The contemporary business environment is rapidly evolving. Globalization has taken over the organization environment, and with this business is forced to undergo continuous and rapid change driven by increasing stakeholder expectations, new technological advances, and competition that is not only global, but viral (Bendell, 2005). This has resulted in a dramatically different business environment in which the modern business, in order to survive and prosper, is forced to evolve and regularly revise their internal and external business processes. Typically, aggressive and rapid change management systems germinate within the private sector -- only after trial and error, testing, and numerous permutations did they become standard within the public sector organization. This paradigm, however, changed in the late 1990s with a combination of rising client expectations to effectively address major socio-culture, economic, and demographic issues, and change in governmental oversight and minimal requirements pushed management in the public sector…… [Read More]
Over the last several years, Home Depot has been through a number of different challenges. Part of the reason why this was occurring, is because of shifts in the housing market with consumers dramatically cutting back on their spending. This had a negative impact on the earnings of the company and it has resulted in the former CEO Robert Nardelli being forced to resign. The reason why is because, the needs of various shareholders were not being taken into account. ("Home Depot CEO," 2007) Once this occurred, it meant that there would be new management who were attempting to address all of these different needs. To fully understand how this is taking place requires looking at: the various stakeholders for Home Depot, how the CEO manages the demands of stakeholders and the way they are presently addressing these needs. Once this occurs, it will provide the greatest insights…… [Read More]
Employee Training Program: Home Depot
The following training program is partially fashioned on that developed by Lowe's and integrates the ADDIE Instructional Design Model as process to help plan and implement the training program.
Home Depot will structure a comprehensive training program to introduce new employees to its cultural environment and to familiarize them with job requirements, objectives and strategic initiatives for enhanced work performance and customer support skills. The training program will also instruct employees in Home Depot's history, mission and values.
The entire training program will be based on the ADDIE instructional design Model and will last 6 weeks. Throughout those 6 weeks, new recruits will participate in a series of meetings and training sessions whereby they will become acquainted with fellow workers, managers, and leaders in the organization, as well as receiving hand-on practice in future job tasks and activities.
The ADDIE Model
The ADDIE model revolves…… [Read More]
Initially, the Home Depot strove to turn its flagging profits and image around through product innovation, although it has never been as rigorous in its self-examination as Toyota. Still, after expanding to the point that industry analysts worried that it had overextended itself, and after the more female-friendly Lowes stores with their superior store layout threatened its dominance, the Home Depot "sanded down its rougher product edges a little to make itself much more appealing to a broader consumer demographic," including women (Casey, 2004, p.1). However, the Home Depot's success over competitors like Lowes has not been nearly as complete as Toyota's dominance over Detroit and while Toyota enjoys status as the most successful and respected car company in America, the Home Depot's ability to survive at the top is far more uncertain. Initially, the Home Depot focused more on product reform, rather than changing its company structure. To keep…… [Read More]
obert Nardelli -- a Controversial Leader
Leadership landscape has evolved greatly over the last few decades. Where there has been an extensive research performed in this area, major emphasis has been levied on distinguishing managers from leaders. And, in today's robust and diversified workplace, leaders with exceptional motivating power and business management ability is what every organization needs. This is the reason why obsolete leadership styles when exercised, tend to bring out disastrous results. This is precisely what happened when obert Nardelli of General Electrics was made CEO of Home Depot, a leading store with a glorious history of excellent customer service and major customer satisfaction. Although Nardelli brought a rich experience to Home Depot but the ideology he was following had major clashes with the original vision of Home Depot which later on made him declared as one of the worst CEOs in the history of United States.
Before…… [Read More]
The major problem that exists in this scenario is a difference of opinion regarding the appropriate level of managerial control over employees' hours and work schedules, with Accord feeling that the need to repeatedly take time off in order to care for one's aging parents needs to be more carefully managed and controlled, while Munger (and others) feel that there should be a great deal of flexibility and employee determination when it comes to these issues. This centra problem has been clouded by accusations of ageism on one hand and a lack of principled work ethic or efficiency on the other, neither of which are elements that can be proven as motives for any of the individuals involved. These problems create a major opportunity for the clarification and codification of policies regarding time taken to care for ageing relatives and general efficiency and scheduling issues.
Task B1: Generic…… [Read More]
Competing for the Future: Komatsu and Home Depot
Komatsu is now one of the leading earth moving equipment manufacturers in the world, however, it wasn't always so. Komatsu began in 1921, as a specialized manufacturer of mining equipment. Yet, even in those early years, before information technology began to eliminate geographical and cultural borders, Mr. Takeuchi, Komatsu's founder, had a globalized and customer-centric vision. He knew it was important for his management team to have "an 'overseas orientation' and a 'user orientation'" (Hamal & Prahalad 3) if they were to compete against much larger corporations.
Komatsu has managed to grow from these very modest beginnings to a multi-billion dollar industry-leading competitor, in only two generations.
It this success has been fraught with challenges. From intensified local competition when American companies were allowed to partner with Japanese companies for joint ventures in Japan, to technological weaknesses in their product line, to…… [Read More]
Valuing Common Equity
Comparison of Lowes and The Home Depot
There are different methods that firms and investors can use to value the common equity that a corporation holds. The different methods all have strengths and weaknesses in different circumstances and it is important to understand these factors in any evaluation. For example, the company's future income stream will ultimately determine the company's fundamental value; however these calculations are not always what determines a firm's market price. Although there are many factors that determine the market price, the company's net present value (NPV) of future revenue streams can be useful to both investors and internal executives relative to managerial accounting. A company's NPV can be used to compare different direct investment opportunities as well as calculating an average cost of capital to serve as an investment baseline; whereas indirect valuation are more subject and often lie on whether investors believe…… [Read More]
S. And cultural similarities. The ritish market, for the beginning, may offer a potential target for Home Depot stores.
In terms of competitors, Lowe is the strongest competitor on the market. With a revenue growth of 16.4%, compared to Home Depot's 11.3%, Lowe is a competitor to be taken into consideration. On the other hand, it is, in my opinion, less than likely that the antitrust laws in the United States will allow these two giants to merge, given the fact that the joint company is likely to hold a monopoly in the industry. As such, an acquisition of the company's main competitor, Lowe, is only likely to bring about additional problems for Home Depot.
The question is how can Home Depot enhance its value and be more competitive on the market. As presented previously, first and foremost it can diversify and improve its post-sale set of services, to include…… [Read More]
Business Society and Corporate Values
There has indeed been a great deal of discussion regarding CEO compensation, which is rightly viewed as being completely out of line. The core problem and cause of inflated CEO salaries cannot be attributed to a single reason, but is rather the result of a range of inter-connected factors. What is definitive is the fact that these salaries have inflated over time; this is in part due to the fact that greed is a progressive, boundless factor. "According to the Economic Policy Institute, in the late 1970s, total compensation of chief executives in large American corporations was 35 times that of the average American worker. In 2007, it was 275 times that" (Borger, 2007). These facts alone demonstrate that there is good reason to be in a state of alarm. The reasons for such severely inflated and remarkably unjust salaries are a result of the…… [Read More]
FINANCE -- VALUE CHAINS, PORTER'S 5 FORCES AND ECONOMIC ATTRIBUTES
The analyses of The Home Depot and Lowe's will involve value chain analysis, Porters 5 forces framework and economic analysis framework. These three perspectives complement rather than conflict with each other. Furthermore, they view a business internally and externally within a specific industry. The combination of all three perspectives will give an effective "picture" of The Home Depot and Lowe's individually, head-to-head and within their industry.
Value chain analysis -- Information and Value for Financial Analysts
Value chain analysis separates a business into a series of value-generating activities called a "value chain," often including primary and support activities. This assists a financial analyst in discerning which activities a business uses to create a competitive advantage and generate shareholder value. The activities ideally offer more value to customer than cost to the business, causing a profit margin (Internet Center for Management…… [Read More]
The one exception to these generalizations is Marlboro, but its dominant market share is publicized by a tobacco watch group. Marlboro itself perhaps does not want to emphasize the fact it is the most popular brand in the United States because this might draw greater regulatory attention regarding its advertising and distribution. That is the reason that is market share is being publicized by anti-tobacco activists.
Q3. Taste test
For my taste test, I selected three cola brands that would not be immediately recognizable, based upon their appearance (This eliminated the possibility of comparing 7-Up and Coca-Cola, for example). I did a blind taste test of Coca-Cola, Pepsi-Cola, and Dr. Pepper, labeled as a, B, and C. Almost every person in the taste test was able to pick out the distinctly sweet taste of Dr. Pepper. Coca-Cola and Pepsi were less obvious: while individuals were able to recognize that the…… [Read More]
e sure to include a description of all four basic financial statements.
The Home Depot provides four basic financial statements:
1) CONSOLIDATED STATEMENT of EARNINGS (indicates how revenue is transformed into net income to show if the company made or lost money during the period being reported)
2) CONSOLIDATED ALANCE SHEET (a summary of the value of all assets, liabilities and ownership equity on a specific date)
3) CONSOLIDATED STATEMENT of STOCKHOLDERS' EQUITY and COMPREHENSIVE INCOME (summarize the changes in the components of stockholders' equity for a period of time)
4) CONSOLIDATED STATEMENT of CASH FLOWS (shows a company's incoming and outgoing money (sources and uses of cash) during a time period)
The only footnote explains that Fiscal years ended January 28, 2007, January 29, 2006 and January 30, 2005 include 52 weeks. However, there is a summary of significant accounting policies included as a supplement that includes: usiness, Consolidation…… [Read More]
Grasso last year, contending that the $139.5 million payout that Mr. Grasso received in the summer of 2003 was exorbitant and in violation of New York's not-for-profit law, which states that executives at not-for-profit organizations, like the exchange, receive "reasonable" compensation. Mr. Spitzer has said he will seek more than $100 million back from Mr. Grasso. In his complaint, Mr. Spitzer cited the Webb report as crucial to his investigation. But until yesterday it remained confidential. The document describes some of the crucial points made in the complaint, among them that the board was misled about the size of Mr. Grasso's bonuses and that $13 million of his $139.5 million payment was vested when in fact it was not (THOMAS and Anderson 2005).
The antitrust authorities should permit Microsoft to merge with Yahoo because it will be more profitable in the end. This is due to the fact that…… [Read More]
On Friday 6/15 I went to home depot to see a speech on "How to Manage You Lawn and Garden." I had seen a flyer in the store on a previous visit and decided that this would be an interesting event to attend so that I could learn how to take care of my yard at home. This was a free event that just required showing up at the specified time. I was hoping to pick up some tips on how to better care for my flowers and grass as I always seem to have hard time making it look good all summer long.
Evaluation of Speaker
The speaker was a representative from expertvillage.com. He had been invited to speak to the audience in regards to how to manage ones yard and garden. His motivation for giving this speak came from his intense passion for sharing with others…… [Read More]
S. minimum wage standards.
As the above scenarios illustrate, it is impossible to rely upon a single moral theory when developing a corporate code of ethics. This is because each individual brings his or her own personal perspective about ethics, so that each theory is biased by personal perspective. While Kohlberg's Model of Cognitive Development attempts to incorporate these differences, it fails to answer the question of whether or not individuals can judge the morality of someone's actions when that person comes from a different ethical and cultural background. (AllPsych, 2004). Therefore, it seems like the best thing a corporation can do is to consult the cultural norms of its stakeholders and try to fashion a corporate code that respects all of those norms. Such a code would focus on individual rights, utilitarianism, and justice. Therefore, DWI's corporate code should pledge to create value and enhance quality of life for…… [Read More]
Stakeholder Analysis Ford Motor Company
Key Stakeholders Ranked by Level of importance
Corporate officers -- Responsible for establishing the goals and mission of the company and ensuring that managers and employees at all levels are properly carrying out the strategy of the company. (Luca, 2007)
Customers/Car owners -- customers make an investment when purchasing a vehicle and they expect the vehicle to be safe and reliable. Customers depend on their vehicles for work, school and general transportation. As such they have an interest in Ford's ability to develop good dependable vehicles.
Managers -- Managers carry the information received from corporate officers to employees and make certain that the goals established are realized.
The General Public -- Everyday people are killed or injured in car accidents. Because Ford cars are popular and a mainstay on roads throughout the world, the general public is interested in knowing the…… [Read More]
9 per cent market share. The article is not dated and it might easily be no longer relevant.
Finally, another situation is aroused when the sources available are specific and do not refer to the United States or to the global average. In the case of the Marlboro cigarettes for instance, the Tobacco Freedom website (2001) states that they are leaders within the Hispanic consumer segments, with a market share of 49.8 per cent. They do not however mention the overall figures.
People are reticent to the unknown -- this is a given which can be observed in various circumstances, including the taste test. While unable to associate the drink with a brand, the people drank little amounts and were always circumspect. Additionally, they tried to guess the nature of the drink. Those who consume a certain soft beverage on daily basis were able to identify the respective…… [Read More]
Best practices in the retail industry come down to ensuring that employees are well-trained, adequately motivated, and that there is a high level of quantitative management with respect to both staffing levels and with respect to merchandising. Getting to know the employees is a good start to developing best practices in the industry. Star merchandisers like Sam Walton and Jim Sinegal spend time on the retail floor. They know where things are in the store, they ensure that the employees are educated and working hard, and they consistently drill lower-level managers to ensure that those managers know their stores at the finest level of detail. Also, having specific programs for employee motivation, especially ones that can be tracked. This will ensure that the workers are giving their best to the company. That alone can drive more sales, because service levels are higher, but it can also reduce costs,…… [Read More]