Home Depot Mission Statement
CONTENTS
1. INTRODUCTION AND HISTORY
2. COMPANY MISSION / VISION
3. LEADERSHIP
4. THE HOME DEPOT COMPANIES
4.1 EXPO Design Center
4.2 The Home Depot
4.3 The Home Depot Floor Store
4.4 The Home Depot Landscape Supply
4.5 The Home Depot Supply
5. STORES
6. SERVICES
7. SUPPLIERS
8. CORPORATE RESPONSIBILITY
8.1 The Home Depot Foundation
9. MARKETING STRATEGY
9.1 Neighbor of Choice?
9.2 Employer of Choice?
9.3 Retailer of Choice?
9.4 Investment of Choice?
10. THE HOME DEPOT VALUES
11. COMPETITION
12. DID YOU KNOW?
13. SWOT ANALYSIS
13.1 Strengths
13.2 Weaknesses
13.3 Opportunities
13.4 Threats
14. FINANCIALS
14.1 Number of Stores
14.2 Sales
14.3 Income Statement
14.4 Balance Sheet (Current Assets)
14.5 Balance …show more content…
Sheet (Long Term Assets)
14.6 Balance Sheet (Current Liabilities)
14.7 Balance Sheet (Equity And Total Liabilities)
14.8 Growth in Selected Figures
14.9 Ratios
15.
FIVE YEAR PLAN
1. INTRODUCTION AND HISTORY
Founders, Bernie Marcus and Arthur Blank, forever changed the home improvement industry when they opened the first The Home Depot stores in Atlanta, Georgia on June 22, 1979.
The original stores stocked around 25,000 products and were attached to Treasure Island stores. Today, on average, The Home Depot offers 40,000 products and is approximately 106,000 square feet.
The Home Depot story began as a vision of warehouse stores filled from floor to ceiling with a wide assortment of products at the lowest prices. Associates were trained to give the best customer service in the industry.
The Home Depot grew to encompass stores in Georgia, Florida, Louisiana, Texas and Alabama, within the first five years. The company has expanded beyond the orange box to include EXPO Design Center and The Home Depot Supply. The growth continues to this day, with more than 2,005 stores throughout the United States, Canada and Mexico. A new store opens on average every 48 hours.
Year Milestones
1978 The Home Depot concept develops and the corporation is founded by Bernie Marcus and Arthur Blank. The original partnership is called "MB Associates" and was officially incorporated June 29, …show more content…
1978.
1980 The first regularly scheduled in-store how-to product training seminars begin.
1981 The Home Depot stock goes public on NASDAQ on September 22, and raises more than $4 million.
1982 The Home Depot is named the High Performance Retailer by Management Horizons.
1983 The Home Depot more than doubles the total number of associates to 2,400.
Computerized checkout systems are installed at The Home Depot stores.
1984 The Home Depot breaks the 30 store mark.
The Home Depot stock moves from the NASDAQ to the New York Stock Exchange in April.
1985 The Home Depot opens its 50th store and expands into eight markets, including California.
1986 The Home Depot breaks the $1 Billion mark in sales.
1987 The Day-in/Day-out pricing policy is established.
1988 The Home Depot is included in the Standard & Poor's 500 stock index.
1989 The 100th The Home Depot store opens.
The Home Depot begins its partnership with Habitat for Humanity by building homes in Atlanta, Dallas, Tampa and Miami.
1990 The Home Depot begins its partnership with the Olympics by beginning the Olympic Job Opportunities Program.
The Home Depot surpasses Lowe's to become the top seller in the home improvement industry.
1991 The company begins its employee volunteer program Team Depot.
The first EXPO Design Center opens in San Diego, California.
1992 The Home Depot announces its 1994 and 1996 Olympic Games and U.S. Olympic Team sponsorship.
The Home Depot's customers and associates work together to help rebuild South Florida after Hurricane Andrew.
1993 The Home Depot becomes the largest employer of Olympic athletes.
The Home Depot strengthens its commitment to the environment by publishing the first Environmental Greenprint for better housing and establishing the Environmental Grant program.
1994 The Home Depot continues its support of the Olympic movement by sponsoring the Canadian Olympic Team, creating the Canadian Olympic Job Opportunity Program and announcing the sponsorship of the 1996 Paralympics Games.
The Home Depot combines its commitment to the environment and Habitat for Humanity by building the first Green (Environmental) Habitat for Humanity house.
1995 The Home Depot launches Home Improvement 1-2-3® Books, a line of do-it-yourself books.
The Home Depot receives the President's National Community Service Award and corporate contributions exceed $8 million.
1996 The Home Depot marks 40 quarters, or ten years, of consecutive record financial results.
The Home Depot sponsors the Centennial Olympic Games in its hometown of Atlanta.
The Home Depot hires its 100,000th associate and opens its 500th store.
1997 The Home Depot agrees to sponsor the Olympic Games through 2004.
The Home Depot develops the Kids' Workshop® to teach building skills and safety.
1998 The Home Depot finishes the year with more than 200,000 associates.
The Home Depot enters the Puerto Rican market.
The Home Depot announces a NASCAR® partnership with Joe Gibbs racing.
1999 The Home Depot is added to the Dow Jones Industrial Average.
2000 The company launches the online store
www.homedepot.com.
The Home Depot celebrates the opening of its 1,000th store.
The company surpasses the one-week $1 billion sales mark for the first time in May.
2001 The Home Depot receives the first annual Retail Partner of the Year Award from National Home Center News.
The company acquires Total Home, a home-improvement chain in Mexico.
2002 The Home Depot Landscape Supply® opens its first store in Atlanta.
The Home Depot opens its 1,500 store.
The first Home Depot Supply store opens in Dallas.
2003 The 100th Canadian store opens in November.
Project Homefront launches to support military families repairing and maintaining their homes.
The first Home Depot Supply store opens in Dallas.
2004 The Home Depot donates $1 million in tools and materials to support the United States military in Iraq.
The Home Depot launches the first home improvement online gift registry.
2005 The Home Depot and The Home Depot Foundation donate more than $1.5 million dollars to immediate and long-term disaster relief and recovery efforts for the victims of Hurricane Katrina.
The Home Depot forms a hiring partnership with four of the country's leading national Hispanic organizations, The ASPIRA Association, Hispanic Association of Colleges and Universities (HACU), National Council of La Raza (NCLR), and SER - Jobs for Progress National.
2. COMPANY MISSION / VISION
In some ways, HD's business is very simple HD helps people improve the places where they live and work. HD's business is also large, complex and growing: HD employs approximately 325,000 associates who interact with millions of customers; HD has stores in thousands of communities in three different countries; HD sells tens of thousands of home improvement products made from a vast array of materials and natural resources; and HD sources and purchases these products from thousands of suppliers across the globe.
In all of the relationships, HD has the responsibility to lead with the highest ethical standards, to understand the impactsshort- and long-termand to consider fairly the interests of all of the touch points.
In the end, the definition of corporate responsibility is very straightforward HD seeks to be both profitable and responsible and to balance the needs of the community.
3. LEADERSHIP
At The Home Depot, dedication to serving customer and providing the ultimate shopping experience is everyone's priority. Maintaining this focus and commitment is a leadership team that believes the company values and commitment to great customer service will create value for all the stakeholders. Working in a Store Support Center, rather than a corporate headquarters, our leadership knows that the most important people in the fabric of the company are the store associates and store leadership teams.
Executive Vice Presidents Francis Blake
Executive Vice President, Business Development and Corporate Operations Joe DeAngelo
Executive Vice President, Home Depot Supply Robert DeRodes
Executive Vice President & Chief Information Officer Dennis Donovan
Executive Vice President, Human Resources Frank Fernandez
Executive Vice President, Secretary and General Counsel Carl C. Liebert III
Executive Vice President, Home Depot Stores Tom Taylor
Executive Vice President, Merchandising and Marketing Carol B. Tomé
Executive Vice President
Senior Leadership Team Diane Dayhoff
Vice President, Investor Relations Harvey Seegers
President, The Home Depot Direct Brad Shaw
Senior Vice President, Corporate Communications and External Affairs Annette Verschuren
Division President, The Home Depot Canada
4. THE HOME DEPOT COMPANIES
In HD's commitment to being the best in the home improvement business, HD wants to be sure that HD offers the widest variety of products at the most convenient locations for all of our customers. In keeping with this commitment, HD strives to expand the products and services through various subsidiaries and extensions of The Home Depot. These companies extend the service to the do-it-yourselfer, do-it-for-me and the professional customer.
4.1 EXPO Design Center
EXPO Design Center is a design and services store that takes projects from concept to completion.
EXPO Design Center offers homeowners professional design and installation services, and carries the most luxurious and innovative products picked from around the world.
Each of EXPO's 10 showrooms features unique lifestyle vignettes so that customers can walk from one to the other, visualizing full-room scenes while pulling all of the elements of an interior design project together.
Format: 90,000+ square foot showroom filled with lifestyle displays, 20' drop ceilings, carpeted and hardwood floors and curved pathways rather than straight aisles
Customer base: Buy-it-yourself (BIY). Usually have products professionally installed
Product selection: An incredible selection of rare and designer products for purchase and special order in lighting, soft and hard flooring, bath design and hardware, kitchen design and appliance, décor and patio
Type of sales: A small collection of in-stock items for quick maintenance or décor fixes, but most sales are special order and are part of a larger remodeling or design project
4.2 The Home Depot
The Home Depot is a working warehouse that stocks products for almost every home improvement project. Large floor space, high ceilings and a huge product selection contribute to an exciting environment for customers.
Format: Averages 105,000 square feet and are designed to suit the needs of each community
Customer base: Do-it-yourself, Do-it-for-me and professional
Product selection: 40,000 home improvement products in stock to maintain, repair and decorate a home
Type of sales: In-stock, special order and installed sales. The Home Depot is project-oriented, providing the necessary components for almost any type of home improvement.
There are also smaller The Home Depot stores located primarily in densely populated inner city markets and also suburban areas. HD wants to be sure that HD is catering to all markets therefore we have alternatively formatted stores to fit individual communities.
Format: 55,000 80,000 square foot stores
Customer base: DIY, DIFM and Pro
Product selection: Almost 30,000+ home improvement products in stock to maintain, repair and decorate a home
Type of sales: Off-the-shelf, special order and installed sales
4.3 The Home Depot Floor Store
The mission of The Home Depot Floor Store is to fulfill the customer's excitement of bringing a fresh, new look to their home. The Floor Store will provide the largest selection of quality products at everyday low prices in a simple and informative format. The Home Depot Floor Store's professional sales consultants will comfortably guide the customer through the entire process, so they can make their selection with confidence.
The Home Depot Floor Store offers a complete selection of Carpet, Wood, Tile, Stone, Laminate and vinyl. Flooring supplies are also available at Margate and Plano. All locations offer professional installation all backed by The Home Depot.
4.4 The Home Depot Landscape Supply
The Home Depot Landscape Supply opened in August 2002 and is a truly unique concept. The product depth and selection, enhanced services (will call, delivery, tool rental, etc.) and the expertise of the store associates caters to the specific needs of the professional customer, as well as the project-oriented do-it-yourselfer.
Format: A five to seven acre site with a 12,000 square foot heated and cooled greenhouse; a 25,000 square foot shaded area; and one to three acres of shrubs and trees. Contractors have a separate entrance, service and checkout desk, restroom and parking area
Customer base: Contractor and avid do-it-yourself garden enthusiast
Product selection: Approximately 10,000 products including interior plants, chemicals, pavers, irrigation supplies, trees, shrubs and landscaping tool rental...everything the professional landscaper and garden enthusiast needs
Type of sales: In-stock and special order
4.5 The Home Depot Supply
Together with Hughes Supply, HD Supply is now the country's leading diversified wholesale distributor. The breadth of HD Supply's product and service offerings enables us to serve the residential, commercial, infrastructure and industrial construction and maintenance markets at all stages of a project. The Hughes Water and Sewer, Plumbing/HVAC, Maintenance, Repair and Operations (MRO) and Building Materials business lines are joining with existing HD Supply businesses to expand the company's vast capabilities in serving professional customers. The Hughes Electrical, Electrical Utilities and Industrial PVF business lines provide to HD Supply a new platform for growth.
5. STORES
The Home Depot currently has 2,040 stores in the United States, Canada, Mexico, Puerto Rico and St. Thomas. HD is committed to offering the ultimate home improvement shopping experience. With up to 40,000 different products, trademark customer service and guaranteed low prices, our stores cater to every type of home improvement customer, from novice to expert.
The company also operates 34 EXPO Design Center locations, 11 The Home Depot Landscape Supply stores, two The Home Depot Floor Stores, three The Home Depot Supply stores, and eight Contractors' Warehouse stores.
6. SERVICES
Unbeatable customer service begins with HD's knowledgeable and helpful associates in the orange aprons, but it doesn't end there. HD offers a wide variety of services for customer convenience because HD wants to be sure that your shopping experience with HD is perfect every time. From truck rental to home installation to free potting, HD goes the extra mile for you with all of your home improvement needs.
7. SUPPLIERS
The Home Depot is committed to being the Suppliers' (including Service Providers') Partner of Choice. HD's Supplier Partners play a key role in our supply chain producing the quality products HD sells and ensuring that these products are available to the customers when they want and need them.
HD has renewed focus on Supplier engagement with the establishment of the Partners Council process where HD listens to Voice of the Supplier. HD is also working on driving Supplier Performance by establishing better means of communication with the supply base and putting in place robust and accurate metrics by which to measure performance.
The Home Depot currently imports products from over 40 countries. Presently, these products are housed in twelve import distribution centers around the United States ranging between 750,000 to 1.4 million square feet.
8. CORPORATE RESPONSIBILITY
The Home Depot is built on the principle of creating value for the stockholders while never forgetting the values . HD seeks to be profitable, responsible and balance the needs of the community.
Through The Home Depot Foundation, our community impact grants and associates' volunteer time, The Home Depot strives to have a positive impact on communities in the U.S., Canada and Mexico. HD also invites the community into our stores to participate in practical and educational programs that benefit children and adults. HD's commitment to environmental sustainability shows through the energy efficient and sustainable products, recycling practices, and business principles.
Protecting the environment,
Disaster preparedness, response and rebuilding,
Kids work shop,
United way partnership,
5.500 non-profit organizations supported,100 playgrounds built and refurbished with KaBOOM!, 5.300 home repairs made in partnership with Rebuilding Together.
8.1 The Home Depot Foundation
The Home Depot Foundation works to build affordable, efficient, healthy homes while promoting sustainability through the support of non-profit organizations with funding and volunteers. The Foundation supports organizations working to create, rehabilitate or finance homes for low-to-moderate income individuals and families. These homes are required to be built responsibly by adhering to construction and operating guidelines that help to ensure the efficient use of resources, improved indoor air quality and minimal environmental impact. For example, The Home Depot Foundation partnered with The Enterprise Foundation to help launch the Green Communities Initiative, an alliance of housing, health and environmental organizations created to improve the quality of affordable housing across the country.
To further promote a healthy environment and more livable communities, the Foundation also supports programs working to restore and sustain urban and wildland forests. Community trees provide numerous environmental and economic benefits including improved air and water quality, energy conservation, noise reduction, erosion control and wildlife habitat. The sustainable management of rural and wildland forests also ensures that lumber and other forest products are harvested in a responsible manner to help guarantee their existence for the use and enjoyment of futsure generations.
The Foundation also supports volunteerism and service, linking associates and suppliers of The Home Depot with opportunities to work with grant recipients in their communities. For example, in 2005, The Home Depot Foundation is the exclusive Home Improvement sponsor of the National NeighborWorks Week, a week of service celebrating the local NeighborWorks organizations' accomplishments in revitalizing communities and transforming lives. During the week, associates and suppliers of The Home Depot will partner with local NeighborWorks organizations to repair homes, landscape properties, build playgrounds and strengthen communities.
9. MARKETING STRATEGY
HD built their entire company around the idea that a customer could come in and how to do everything and receive the solution. To achieve this ideal, HD has put much emphasis on; Employee Training, systems that provide efficient customer check out and returns, store based inventory management, rapid order replenishment, labor planning support, item movement information.
HD utilizes a variety of different marketing approaches to satisfy their vast market span.
They campaign on both the local and the national markets.
HD incorporates major sponsorships into their marketing plan such as NASCAR, the Olympic Games, College Football, and Home and Gardening shows.
HD use local advertising to directly tailor their marketing response to specific marketing differences and local competition levels.
The Home Depot began as a vision of warehouse stores filled from floor to ceiling with a wide assortment of products at the lowest prices with trained associates giving absolutely the best customer service in the industry. That vision was realized and today we have more than 2,000 stores throughout the United States, Canada, Mexico, Puerto Rico and St. Thomas.
The Home Depot strives to be the best corporate partner possible in the community. HD makes positive contributions as a neighbor, an employer, a retailer and as a profitable investment opportunity through successful and strategic operations of the company.
The Home Depot helps people fulfill their dreams by helping them:
To live in a clean, safe and caring community
To be part of a challenging, diverse, and inclusive workplace
To build and live in the house of their dreams
To create wealth and financial security
9.1 Neighbor of Choice?
For The Home Depot, being a partner to their cities and towns is of paramount importance. HD's business creates jobs and opportunities for other businesses in the community. HD strives to purchase locally, therefore keeping local dollars in the community. HD is committed to bettering our community through local and area volunteer projects. And by offering home solutions in your neighborhood, HD helps consumers you to fulfill their dreams of turning a house into a home.
9.2 Employer of Choice?
To be the Employer of Choice means creating an inclusive and associate-centered culture. At The Home Depot, that means providing meaningful and challenging work for their associates that creates opportunity for growth and development. HD also strives to provide economic opportunities through competitive wages and exceptional benefits packages to all associates. HD recognizes the contributions of their associates and reward their achievements, hard-work and dedication.
9.3 Retailer of Choice?
The Home Depot provides the customers with excellent service every time they come into their stores. HD offers the right products, the right selection, the right prices and a team of associates passionate about your needs. HD builds lasting relationships by helping customers realize their dreams and growing their trust through products and services.
9.4 Investment of Choice?
Being an Investment of Choice means increasing economic growth through strategic marketing in stores and of products. It also means making decisions that reflect the policies surrounding social responsibility and considering the impact on the community. Being an Investment of Choice means continuing to gain on comparable store sales through innovative initiatives and growing adjacencies to meet the needs of the public to increase the economic bottom-line and the corporate reputation.
10. THE HOME DEPOT VALUES
Associates are central to Home Depot's success and the values are part of the fabric of the company. Values are beliefs that do not change over time. They are the principles and standards for the framework upon which Home Depot is built. Home Depot's unique culture is built on associate dedication and a commitment to an "orange-blooded" entrepreneurial spirit.
1. Taking care of our people: The key to the success is treating people well. HD does this by encouraging associates to speak up and take risks, by recognizing and rewarding good performance and by leading and developing people so HD may grow.
2. Giving back to our communities: An important part of the fabric of The Home Depot is giving the time, talents, energy and resources to worthwhile causes in the communities and society.
3. Doing the right thing: They exercise good judgment by "doing the right thing" instead of just "doing things right." HD strives to understand the impact of their decisions, and HD accepts responsibility for their actions.
4. Excellent customer service: Along with the quality products, service, price and selection, HD must go the extra mile to give customers knowledgeable advice about merchandise and to help them use those products to HD's maximum benefit.
5. Creating shareholder value: The investors who provide the capital necessary to allow the company to grow need and expect a return on their investment. HD is committed to providing it.
6. Building strong relationships: Strong relationships are built on trust, honesty and integrity. HD listens and responds to the needs of customers, associates, communities and vendors, treating them as partners.
7. Entrepreneurial spirit: Home Depot associates are encouraged to initiate creative and innovative ways of serving the customers and improving the business and to spread best practices throughout the company.
8. Respect for all people: In order to remain successful, HD associates must work in an environment of mutual respect, free of discrimination and harassment where each associate is regarded as a part of the Home Depot team.
11. COMPETITION
Cannibalization strategy: Placing HD stores in a closer vicinity to one another will limit potential sales for Low's store. If the strategy is performed correctly; 1) It can deter Lowe's from wanting to enter the location. 2) Because the market is nearing saturation, Lowe's growth rate of sales will be decreasing within the next 2 fiscal years.
12. DID YOU KNOW?
The Home Depot is the world's leading employer of Olympic and Paralympics athletes and hopefuls.
The Home Depot is the fastest growing retailer to reach $30 billion, $40 billion, $50 billion, $60 billion and $70 billion in sales. At the end of fiscal year 2005, revenue was $81.5 billion.
Over 22 million people visit a The Home Depot store each week.
More than a half-million children have built their first toolbox at a The Home Depot Kids Workshop.
The Home Depot is the youngest retailer in the Fortune 50.
HD sells enough paint in a year to paint the square footage of Manhattan Island with one good coat and still have enough left over to touch up the graffiti in the Bronx. -If all the 2-inch disposable brushes HD sells each year were lined up side-by-side, they would paint a stripe 1,622 miles wide - about the distance from New York City to Denver.
13. SWOT ANALYSIS
13.1 Strengths
With recent corporate scandals, strong Board of Directors are becoming essential to stay competitive. HD was cited by Business week for having one of the `Ten best boards in US`
Increases in operating efficiencies.
HD's operating margins are at peak levels.
0.9% increase in gross profit between 2002 - 2003 was generated by the ability of the Merchandise Management team to lower the costs.
The Merchandise Management Team is one of HD's greatest strength.
Board of Directors has empowered a team in Headquarters to make most of the product buying decisions.
The team managed to reduce the number of the suppliers and makes HD operate more efficiently.
Increase in inventory control leaded to an increase in profitability ratio.
The trend of having high gross profit ratios will likely continue throughout HD's future.
13.2 Weaknesses
Ageing HD stores are being a negative impact on the company image.
Competitor Lowe's is generally regarded as having cleaner, smaller, brighter, more customer-friendly store.
26% of HD's 1537 locations are more than 7 years old.
With a new CEO, making drastic changes at HD and having expanded sharp decline in stock price, the morale of managers is down.
As HD enters its nature stage, share returns have declined and management has become less enthused.
HD store managers were given great freedom in customizing their stores, from merchandising choices to employee relations.
13.3 Opportunities
HD is staying within its core competencies by expanding their new landscaping division.
Through a strong marketing research program, HD should fully grasp what the consumer is wanting.
HD's specialty in home improvement and strong name recognition, will allow them to capture a large portion of this market.
HD's EXPO Design Centers are an opportunity to expand their market niche by providing potential customers with innovative remodeling suggestions.
As the EXPO centers enter more markets, they will be taking sales directly from stores such as Pier One, Bed Bath&Beyond , Sears , Williams-Sonoma and SAKS 5th Avenue.
By specializing in high and home improvement products such as small appliances and culinary ware, patio accessories, ceiling fans and Persian rugs, people should enjoy the trendy shopping experience.
HD is taking the initiative to update the appearance of their older stores by investing $250 million in store remodeling in the upcoming year.
They intend to transform their somewhat outdated stores into cleaner, more user friendly stores to enhance the overall shopping experience.
Tool rental services had a significant impact on HD` s Gross Profitability. As the number of centers increase, so will gross profit as a percentage of sales.
HD recognized a strong market potential in smaller cities surrounding large cities. By initiating the new market penetration strategy of smaller cities, HD will benefit greatly.
13.4 Threats
HD is competing head to head with Lowe's. They have been stealing HD's market share with a positioning strategy of opening stores as close as possible to HD.
Looming poor economic conditions present challenges for this retailer.
Declines in GDP growth, employment, personal disposable income and customer sentiment are a threat to HD's sales revenues in the short term.
Decreases in the economic factors would signify a worsening economy. Consumer would start a larger portion of their disposable income, foregoing home improvement plans until more stable times.
14. FINANCIALS
14.1 Number of Stores
14.2 Sales
14.3 Income Statement
14.4 Balance Sheet (Current Assets)
14.5 Balance Sheet (Long Term Assets)
14.6 Balance Sheet (Current Liabilities)
14.7 Balance Sheet (Equity And Total Liabilities)
14.8 Growth in Selected Figures
14.9 Ratios
15. FIVE YEAR PLAN
1. INTRODUCTION AND HISTORY
2. COMPANY MISSION / VISION
3. LEADERSHIP
4. THE HOME DEPOT COMPANIES
4.1 EXPO Design Center
4.2 The Home Depot
4.3 The Home Depot Floor Store
4.4 The Home Depot Landscape Supply
4.5 The Home Depot Supply
5. STORES
6. SERVICES
7. SUPPLIERS
8. CORPORATE RESPONSIBILITY
8.1 The Home Depot Foundation
9. MARKETING STRATEGY
9.1 Neighbor of Choice?
9.2 Employer of Choice?
9.3 Retailer of Choice?
9.4 Investment of Choice?
10. THE HOME DEPOT VALUES
11. COMPETITION
12. DID YOU KNOW?
13. SWOT ANALYSIS
13.1 Strengths
13.2 Weaknesses
13.3 Opportunities
13.4 Threats
14. FINANCIALS
14.1 Number of Stores
14.2 Sales
14.3 Income Statement
14.4 Balance Sheet (Current Assets)
14.5 Balance …show more content…
Sheet (Long Term Assets)
14.6 Balance Sheet (Current Liabilities)
14.7 Balance Sheet (Equity And Total Liabilities)
14.8 Growth in Selected Figures
14.9 Ratios
15.
FIVE YEAR PLAN
1. INTRODUCTION AND HISTORY
Founders, Bernie Marcus and Arthur Blank, forever changed the home improvement industry when they opened the first The Home Depot stores in Atlanta, Georgia on June 22, 1979.
The original stores stocked around 25,000 products and were attached to Treasure Island stores. Today, on average, The Home Depot offers 40,000 products and is approximately 106,000 square feet.
The Home Depot story began as a vision of warehouse stores filled from floor to ceiling with a wide assortment of products at the lowest prices. Associates were trained to give the best customer service in the industry.
The Home Depot grew to encompass stores in Georgia, Florida, Louisiana, Texas and Alabama, within the first five years. The company has expanded beyond the orange box to include EXPO Design Center and The Home Depot Supply. The growth continues to this day, with more than 2,005 stores throughout the United States, Canada and Mexico. A new store opens on average every 48 hours.
Year Milestones
1978 The Home Depot concept develops and the corporation is founded by Bernie Marcus and Arthur Blank. The original partnership is called "MB Associates" and was officially incorporated June 29, …show more content…
1978.
1980 The first regularly scheduled in-store how-to product training seminars begin.
1981 The Home Depot stock goes public on NASDAQ on September 22, and raises more than $4 million.
1982 The Home Depot is named the High Performance Retailer by Management Horizons.
1983 The Home Depot more than doubles the total number of associates to 2,400.
Computerized checkout systems are installed at The Home Depot stores.
1984 The Home Depot breaks the 30 store mark.
The Home Depot stock moves from the NASDAQ to the New York Stock Exchange in April.
1985 The Home Depot opens its 50th store and expands into eight markets, including California.
1986 The Home Depot breaks the $1 Billion mark in sales.
1987 The Day-in/Day-out pricing policy is established.
1988 The Home Depot is included in the Standard & Poor's 500 stock index.
1989 The 100th The Home Depot store opens.
The Home Depot begins its partnership with Habitat for Humanity by building homes in Atlanta, Dallas, Tampa and Miami.
1990 The Home Depot begins its partnership with the Olympics by beginning the Olympic Job Opportunities Program.
The Home Depot surpasses Lowe's to become the top seller in the home improvement industry.
1991 The company begins its employee volunteer program Team Depot.
The first EXPO Design Center opens in San Diego, California.
1992 The Home Depot announces its 1994 and 1996 Olympic Games and U.S. Olympic Team sponsorship.
The Home Depot's customers and associates work together to help rebuild South Florida after Hurricane Andrew.
1993 The Home Depot becomes the largest employer of Olympic athletes.
The Home Depot strengthens its commitment to the environment by publishing the first Environmental Greenprint for better housing and establishing the Environmental Grant program.
1994 The Home Depot continues its support of the Olympic movement by sponsoring the Canadian Olympic Team, creating the Canadian Olympic Job Opportunity Program and announcing the sponsorship of the 1996 Paralympics Games.
The Home Depot combines its commitment to the environment and Habitat for Humanity by building the first Green (Environmental) Habitat for Humanity house.
1995 The Home Depot launches Home Improvement 1-2-3® Books, a line of do-it-yourself books.
The Home Depot receives the President's National Community Service Award and corporate contributions exceed $8 million.
1996 The Home Depot marks 40 quarters, or ten years, of consecutive record financial results.
The Home Depot sponsors the Centennial Olympic Games in its hometown of Atlanta.
The Home Depot hires its 100,000th associate and opens its 500th store.
1997 The Home Depot agrees to sponsor the Olympic Games through 2004.
The Home Depot develops the Kids' Workshop® to teach building skills and safety.
1998 The Home Depot finishes the year with more than 200,000 associates.
The Home Depot enters the Puerto Rican market.
The Home Depot announces a NASCAR® partnership with Joe Gibbs racing.
1999 The Home Depot is added to the Dow Jones Industrial Average.
2000 The company launches the online store
www.homedepot.com.
The Home Depot celebrates the opening of its 1,000th store.
The company surpasses the one-week $1 billion sales mark for the first time in May.
2001 The Home Depot receives the first annual Retail Partner of the Year Award from National Home Center News.
The company acquires Total Home, a home-improvement chain in Mexico.
2002 The Home Depot Landscape Supply® opens its first store in Atlanta.
The Home Depot opens its 1,500 store.
The first Home Depot Supply store opens in Dallas.
2003 The 100th Canadian store opens in November.
Project Homefront launches to support military families repairing and maintaining their homes.
The first Home Depot Supply store opens in Dallas.
2004 The Home Depot donates $1 million in tools and materials to support the United States military in Iraq.
The Home Depot launches the first home improvement online gift registry.
2005 The Home Depot and The Home Depot Foundation donate more than $1.5 million dollars to immediate and long-term disaster relief and recovery efforts for the victims of Hurricane Katrina.
The Home Depot forms a hiring partnership with four of the country's leading national Hispanic organizations, The ASPIRA Association, Hispanic Association of Colleges and Universities (HACU), National Council of La Raza (NCLR), and SER - Jobs for Progress National.
2. COMPANY MISSION / VISION
In some ways, HD's business is very simple HD helps people improve the places where they live and work. HD's business is also large, complex and growing: HD employs approximately 325,000 associates who interact with millions of customers; HD has stores in thousands of communities in three different countries; HD sells tens of thousands of home improvement products made from a vast array of materials and natural resources; and HD sources and purchases these products from thousands of suppliers across the globe.
In all of the relationships, HD has the responsibility to lead with the highest ethical standards, to understand the impactsshort- and long-termand to consider fairly the interests of all of the touch points.
In the end, the definition of corporate responsibility is very straightforward HD seeks to be both profitable and responsible and to balance the needs of the community.
3. LEADERSHIP
At The Home Depot, dedication to serving customer and providing the ultimate shopping experience is everyone's priority. Maintaining this focus and commitment is a leadership team that believes the company values and commitment to great customer service will create value for all the stakeholders. Working in a Store Support Center, rather than a corporate headquarters, our leadership knows that the most important people in the fabric of the company are the store associates and store leadership teams.
Executive Vice Presidents Francis Blake
Executive Vice President, Business Development and Corporate Operations Joe DeAngelo
Executive Vice President, Home Depot Supply Robert DeRodes
Executive Vice President & Chief Information Officer Dennis Donovan
Executive Vice President, Human Resources Frank Fernandez
Executive Vice President, Secretary and General Counsel Carl C. Liebert III
Executive Vice President, Home Depot Stores Tom Taylor
Executive Vice President, Merchandising and Marketing Carol B. Tomé
Executive Vice President
Senior Leadership Team Diane Dayhoff
Vice President, Investor Relations Harvey Seegers
President, The Home Depot Direct Brad Shaw
Senior Vice President, Corporate Communications and External Affairs Annette Verschuren
Division President, The Home Depot Canada
4. THE HOME DEPOT COMPANIES
In HD's commitment to being the best in the home improvement business, HD wants to be sure that HD offers the widest variety of products at the most convenient locations for all of our customers. In keeping with this commitment, HD strives to expand the products and services through various subsidiaries and extensions of The Home Depot. These companies extend the service to the do-it-yourselfer, do-it-for-me and the professional customer.
4.1 EXPO Design Center
EXPO Design Center is a design and services store that takes projects from concept to completion.
EXPO Design Center offers homeowners professional design and installation services, and carries the most luxurious and innovative products picked from around the world.
Each of EXPO's 10 showrooms features unique lifestyle vignettes so that customers can walk from one to the other, visualizing full-room scenes while pulling all of the elements of an interior design project together.
Format: 90,000+ square foot showroom filled with lifestyle displays, 20' drop ceilings, carpeted and hardwood floors and curved pathways rather than straight aisles
Customer base: Buy-it-yourself (BIY). Usually have products professionally installed
Product selection: An incredible selection of rare and designer products for purchase and special order in lighting, soft and hard flooring, bath design and hardware, kitchen design and appliance, décor and patio
Type of sales: A small collection of in-stock items for quick maintenance or décor fixes, but most sales are special order and are part of a larger remodeling or design project
4.2 The Home Depot
The Home Depot is a working warehouse that stocks products for almost every home improvement project. Large floor space, high ceilings and a huge product selection contribute to an exciting environment for customers.
Format: Averages 105,000 square feet and are designed to suit the needs of each community
Customer base: Do-it-yourself, Do-it-for-me and professional
Product selection: 40,000 home improvement products in stock to maintain, repair and decorate a home
Type of sales: In-stock, special order and installed sales. The Home Depot is project-oriented, providing the necessary components for almost any type of home improvement.
There are also smaller The Home Depot stores located primarily in densely populated inner city markets and also suburban areas. HD wants to be sure that HD is catering to all markets therefore we have alternatively formatted stores to fit individual communities.
Format: 55,000 80,000 square foot stores
Customer base: DIY, DIFM and Pro
Product selection: Almost 30,000+ home improvement products in stock to maintain, repair and decorate a home
Type of sales: Off-the-shelf, special order and installed sales
4.3 The Home Depot Floor Store
The mission of The Home Depot Floor Store is to fulfill the customer's excitement of bringing a fresh, new look to their home. The Floor Store will provide the largest selection of quality products at everyday low prices in a simple and informative format. The Home Depot Floor Store's professional sales consultants will comfortably guide the customer through the entire process, so they can make their selection with confidence.
The Home Depot Floor Store offers a complete selection of Carpet, Wood, Tile, Stone, Laminate and vinyl. Flooring supplies are also available at Margate and Plano. All locations offer professional installation all backed by The Home Depot.
4.4 The Home Depot Landscape Supply
The Home Depot Landscape Supply opened in August 2002 and is a truly unique concept. The product depth and selection, enhanced services (will call, delivery, tool rental, etc.) and the expertise of the store associates caters to the specific needs of the professional customer, as well as the project-oriented do-it-yourselfer.
Format: A five to seven acre site with a 12,000 square foot heated and cooled greenhouse; a 25,000 square foot shaded area; and one to three acres of shrubs and trees. Contractors have a separate entrance, service and checkout desk, restroom and parking area
Customer base: Contractor and avid do-it-yourself garden enthusiast
Product selection: Approximately 10,000 products including interior plants, chemicals, pavers, irrigation supplies, trees, shrubs and landscaping tool rental...everything the professional landscaper and garden enthusiast needs
Type of sales: In-stock and special order
4.5 The Home Depot Supply
Together with Hughes Supply, HD Supply is now the country's leading diversified wholesale distributor. The breadth of HD Supply's product and service offerings enables us to serve the residential, commercial, infrastructure and industrial construction and maintenance markets at all stages of a project. The Hughes Water and Sewer, Plumbing/HVAC, Maintenance, Repair and Operations (MRO) and Building Materials business lines are joining with existing HD Supply businesses to expand the company's vast capabilities in serving professional customers. The Hughes Electrical, Electrical Utilities and Industrial PVF business lines provide to HD Supply a new platform for growth.
5. STORES
The Home Depot currently has 2,040 stores in the United States, Canada, Mexico, Puerto Rico and St. Thomas. HD is committed to offering the ultimate home improvement shopping experience. With up to 40,000 different products, trademark customer service and guaranteed low prices, our stores cater to every type of home improvement customer, from novice to expert.
The company also operates 34 EXPO Design Center locations, 11 The Home Depot Landscape Supply stores, two The Home Depot Floor Stores, three The Home Depot Supply stores, and eight Contractors' Warehouse stores.
6. SERVICES
Unbeatable customer service begins with HD's knowledgeable and helpful associates in the orange aprons, but it doesn't end there. HD offers a wide variety of services for customer convenience because HD wants to be sure that your shopping experience with HD is perfect every time. From truck rental to home installation to free potting, HD goes the extra mile for you with all of your home improvement needs.
7. SUPPLIERS
The Home Depot is committed to being the Suppliers' (including Service Providers') Partner of Choice. HD's Supplier Partners play a key role in our supply chain producing the quality products HD sells and ensuring that these products are available to the customers when they want and need them.
HD has renewed focus on Supplier engagement with the establishment of the Partners Council process where HD listens to Voice of the Supplier. HD is also working on driving Supplier Performance by establishing better means of communication with the supply base and putting in place robust and accurate metrics by which to measure performance.
The Home Depot currently imports products from over 40 countries. Presently, these products are housed in twelve import distribution centers around the United States ranging between 750,000 to 1.4 million square feet.
8. CORPORATE RESPONSIBILITY
The Home Depot is built on the principle of creating value for the stockholders while never forgetting the values . HD seeks to be profitable, responsible and balance the needs of the community.
Through The Home Depot Foundation, our community impact grants and associates' volunteer time, The Home Depot strives to have a positive impact on communities in the U.S., Canada and Mexico. HD also invites the community into our stores to participate in practical and educational programs that benefit children and adults. HD's commitment to environmental sustainability shows through the energy efficient and sustainable products, recycling practices, and business principles.
Protecting the environment,
Disaster preparedness, response and rebuilding,
Kids work shop,
United way partnership,
5.500 non-profit organizations supported,100 playgrounds built and refurbished with KaBOOM!, 5.300 home repairs made in partnership with Rebuilding Together.
8.1 The Home Depot Foundation
The Home Depot Foundation works to build affordable, efficient, healthy homes while promoting sustainability through the support of non-profit organizations with funding and volunteers. The Foundation supports organizations working to create, rehabilitate or finance homes for low-to-moderate income individuals and families. These homes are required to be built responsibly by adhering to construction and operating guidelines that help to ensure the efficient use of resources, improved indoor air quality and minimal environmental impact. For example, The Home Depot Foundation partnered with The Enterprise Foundation to help launch the Green Communities Initiative, an alliance of housing, health and environmental organizations created to improve the quality of affordable housing across the country.
To further promote a healthy environment and more livable communities, the Foundation also supports programs working to restore and sustain urban and wildland forests. Community trees provide numerous environmental and economic benefits including improved air and water quality, energy conservation, noise reduction, erosion control and wildlife habitat. The sustainable management of rural and wildland forests also ensures that lumber and other forest products are harvested in a responsible manner to help guarantee their existence for the use and enjoyment of futsure generations.
The Foundation also supports volunteerism and service, linking associates and suppliers of The Home Depot with opportunities to work with grant recipients in their communities. For example, in 2005, The Home Depot Foundation is the exclusive Home Improvement sponsor of the National NeighborWorks Week, a week of service celebrating the local NeighborWorks organizations' accomplishments in revitalizing communities and transforming lives. During the week, associates and suppliers of The Home Depot will partner with local NeighborWorks organizations to repair homes, landscape properties, build playgrounds and strengthen communities.
9. MARKETING STRATEGY
HD built their entire company around the idea that a customer could come in and how to do everything and receive the solution. To achieve this ideal, HD has put much emphasis on; Employee Training, systems that provide efficient customer check out and returns, store based inventory management, rapid order replenishment, labor planning support, item movement information.
HD utilizes a variety of different marketing approaches to satisfy their vast market span.
They campaign on both the local and the national markets.
HD incorporates major sponsorships into their marketing plan such as NASCAR, the Olympic Games, College Football, and Home and Gardening shows.
HD use local advertising to directly tailor their marketing response to specific marketing differences and local competition levels.
The Home Depot began as a vision of warehouse stores filled from floor to ceiling with a wide assortment of products at the lowest prices with trained associates giving absolutely the best customer service in the industry. That vision was realized and today we have more than 2,000 stores throughout the United States, Canada, Mexico, Puerto Rico and St. Thomas.
The Home Depot strives to be the best corporate partner possible in the community. HD makes positive contributions as a neighbor, an employer, a retailer and as a profitable investment opportunity through successful and strategic operations of the company.
The Home Depot helps people fulfill their dreams by helping them:
To live in a clean, safe and caring community
To be part of a challenging, diverse, and inclusive workplace
To build and live in the house of their dreams
To create wealth and financial security
9.1 Neighbor of Choice?
For The Home Depot, being a partner to their cities and towns is of paramount importance. HD's business creates jobs and opportunities for other businesses in the community. HD strives to purchase locally, therefore keeping local dollars in the community. HD is committed to bettering our community through local and area volunteer projects. And by offering home solutions in your neighborhood, HD helps consumers you to fulfill their dreams of turning a house into a home.
9.2 Employer of Choice?
To be the Employer of Choice means creating an inclusive and associate-centered culture. At The Home Depot, that means providing meaningful and challenging work for their associates that creates opportunity for growth and development. HD also strives to provide economic opportunities through competitive wages and exceptional benefits packages to all associates. HD recognizes the contributions of their associates and reward their achievements, hard-work and dedication.
9.3 Retailer of Choice?
The Home Depot provides the customers with excellent service every time they come into their stores. HD offers the right products, the right selection, the right prices and a team of associates passionate about your needs. HD builds lasting relationships by helping customers realize their dreams and growing their trust through products and services.
9.4 Investment of Choice?
Being an Investment of Choice means increasing economic growth through strategic marketing in stores and of products. It also means making decisions that reflect the policies surrounding social responsibility and considering the impact on the community. Being an Investment of Choice means continuing to gain on comparable store sales through innovative initiatives and growing adjacencies to meet the needs of the public to increase the economic bottom-line and the corporate reputation.
10. THE HOME DEPOT VALUES
Associates are central to Home Depot's success and the values are part of the fabric of the company. Values are beliefs that do not change over time. They are the principles and standards for the framework upon which Home Depot is built. Home Depot's unique culture is built on associate dedication and a commitment to an "orange-blooded" entrepreneurial spirit.
1. Taking care of our people: The key to the success is treating people well. HD does this by encouraging associates to speak up and take risks, by recognizing and rewarding good performance and by leading and developing people so HD may grow.
2. Giving back to our communities: An important part of the fabric of The Home Depot is giving the time, talents, energy and resources to worthwhile causes in the communities and society.
3. Doing the right thing: They exercise good judgment by "doing the right thing" instead of just "doing things right." HD strives to understand the impact of their decisions, and HD accepts responsibility for their actions.
4. Excellent customer service: Along with the quality products, service, price and selection, HD must go the extra mile to give customers knowledgeable advice about merchandise and to help them use those products to HD's maximum benefit.
5. Creating shareholder value: The investors who provide the capital necessary to allow the company to grow need and expect a return on their investment. HD is committed to providing it.
6. Building strong relationships: Strong relationships are built on trust, honesty and integrity. HD listens and responds to the needs of customers, associates, communities and vendors, treating them as partners.
7. Entrepreneurial spirit: Home Depot associates are encouraged to initiate creative and innovative ways of serving the customers and improving the business and to spread best practices throughout the company.
8. Respect for all people: In order to remain successful, HD associates must work in an environment of mutual respect, free of discrimination and harassment where each associate is regarded as a part of the Home Depot team.
11. COMPETITION
Cannibalization strategy: Placing HD stores in a closer vicinity to one another will limit potential sales for Low's store. If the strategy is performed correctly; 1) It can deter Lowe's from wanting to enter the location. 2) Because the market is nearing saturation, Lowe's growth rate of sales will be decreasing within the next 2 fiscal years.
12. DID YOU KNOW?
The Home Depot is the world's leading employer of Olympic and Paralympics athletes and hopefuls.
The Home Depot is the fastest growing retailer to reach $30 billion, $40 billion, $50 billion, $60 billion and $70 billion in sales. At the end of fiscal year 2005, revenue was $81.5 billion.
Over 22 million people visit a The Home Depot store each week.
More than a half-million children have built their first toolbox at a The Home Depot Kids Workshop.
The Home Depot is the youngest retailer in the Fortune 50.
HD sells enough paint in a year to paint the square footage of Manhattan Island with one good coat and still have enough left over to touch up the graffiti in the Bronx. -If all the 2-inch disposable brushes HD sells each year were lined up side-by-side, they would paint a stripe 1,622 miles wide - about the distance from New York City to Denver.
13. SWOT ANALYSIS
13.1 Strengths
With recent corporate scandals, strong Board of Directors are becoming essential to stay competitive. HD was cited by Business week for having one of the `Ten best boards in US`
Increases in operating efficiencies.
HD's operating margins are at peak levels.
0.9% increase in gross profit between 2002 - 2003 was generated by the ability of the Merchandise Management team to lower the costs.
The Merchandise Management Team is one of HD's greatest strength.
Board of Directors has empowered a team in Headquarters to make most of the product buying decisions.
The team managed to reduce the number of the suppliers and makes HD operate more efficiently.
Increase in inventory control leaded to an increase in profitability ratio.
The trend of having high gross profit ratios will likely continue throughout HD's future.
13.2 Weaknesses
Ageing HD stores are being a negative impact on the company image.
Competitor Lowe's is generally regarded as having cleaner, smaller, brighter, more customer-friendly store.
26% of HD's 1537 locations are more than 7 years old.
With a new CEO, making drastic changes at HD and having expanded sharp decline in stock price, the morale of managers is down.
As HD enters its nature stage, share returns have declined and management has become less enthused.
HD store managers were given great freedom in customizing their stores, from merchandising choices to employee relations.
13.3 Opportunities
HD is staying within its core competencies by expanding their new landscaping division.
Through a strong marketing research program, HD should fully grasp what the consumer is wanting.
HD's specialty in home improvement and strong name recognition, will allow them to capture a large portion of this market.
HD's EXPO Design Centers are an opportunity to expand their market niche by providing potential customers with innovative remodeling suggestions.
As the EXPO centers enter more markets, they will be taking sales directly from stores such as Pier One, Bed Bath&Beyond , Sears , Williams-Sonoma and SAKS 5th Avenue.
By specializing in high and home improvement products such as small appliances and culinary ware, patio accessories, ceiling fans and Persian rugs, people should enjoy the trendy shopping experience.
HD is taking the initiative to update the appearance of their older stores by investing $250 million in store remodeling in the upcoming year.
They intend to transform their somewhat outdated stores into cleaner, more user friendly stores to enhance the overall shopping experience.
Tool rental services had a significant impact on HD` s Gross Profitability. As the number of centers increase, so will gross profit as a percentage of sales.
HD recognized a strong market potential in smaller cities surrounding large cities. By initiating the new market penetration strategy of smaller cities, HD will benefit greatly.
13.4 Threats
HD is competing head to head with Lowe's. They have been stealing HD's market share with a positioning strategy of opening stores as close as possible to HD.
Looming poor economic conditions present challenges for this retailer.
Declines in GDP growth, employment, personal disposable income and customer sentiment are a threat to HD's sales revenues in the short term.
Decreases in the economic factors would signify a worsening economy. Consumer would start a larger portion of their disposable income, foregoing home improvement plans until more stable times.
14. FINANCIALS
14.1 Number of Stores
14.2 Sales
14.3 Income Statement
14.4 Balance Sheet (Current Assets)
14.5 Balance Sheet (Long Term Assets)
14.6 Balance Sheet (Current Liabilities)
14.7 Balance Sheet (Equity And Total Liabilities)
14.8 Growth in Selected Figures
14.9 Ratios
15. FIVE YEAR PLAN