Home Depot Free Essays

Home Depot opened its first home improvement store in Atlanta Georgia in 1978. The company developed a tactical product analysis providing an assortment of products and services to customers. The products Home Depot offers focus on contractors and the do-it-yourself customers, as well as free how to clinics and workshops for children allowing them to build an item onsite in the store. We will write a custom essay sample on Home Depot or any similar topic only for you Order Now Home Depot has grown into an internationally recognized specialty merchant that markets and delivers 40,000 different building materials, lawn and garden products, home improvement supplies, appliances, and more than 250,000 other products that can be especially ordered (Unknown, 2003-2012). Home Depot has over 2,200 locations throughout the United States. Stores average 105,000 square feet with approximately 23,000 additional square feet of outside garden area† (Unknown, 2003-2012). Pricing Information Home Depot needs to have a good understanding what the customer needs and wants are. Home Depot’s annual report shows the domestic outlook of expectations on procurement policies and procedures; Home Depot has changed its procurement policies and buying procedures. One service that Home Depot has eliminated as part of the changes is the design centers for kitchens and baths. These design centers were a service to the customer who used Home Depot products in the designs of the kitchen and bathroom projects, the service didn’t improve productivity at its stores as many customers had Home Depot’s design center create the layout of the kitchen or bathroom but would purchase the items, such as cabinets, sinks, lights, etc. from other home centers or online. Home Depot’s operating strategy was to close its EXPO design centers and other internal businesses such as HD Bath designs. This would allow the business to focus on maximizing the stores productivity of the existing store base instead of offering services like kitchen design and bath design (Unknown, 2013). Provided is a solution to increase demand for a service, by adding features to its service or making shipping faster or being more reliable, Home Depot can reduce production costs. The procurement process of Home Depot outlines the company’s supplier information within the reference manual. The Supplier Reference Manual provides information to ensure successful partnerships and collaboration between Home Depot and its suppliers. Home Depot’s ordering cycle includes electronic data interchange requirements, distribution information, purchase order methods, store environment conditions, manufacturing excellence, customs compliance, and transportation constraints (see Appendix A). Home Depot’s electronic data interchange (EDI) system provides a resource for repeat supplier collaboration. Suppliers are encouraged to use the EDI system on a weekly basis to ensure business and supply chain needs and expectations are met. The EDI includes mandatory transaction sets, a product catalogue, image requirements, and computer system access needs. Distribution information includes product flows, freight requirements as well as product and packaging characteristics. Home Depot clearly defines its distribution requirements to eliminate any confusion regarding its products, and shipping details. The information designates where product deliveries should be depending on point of origin, product, and final dispersal. The final requirements of Home Depot supplier reference manual include customs compliance and transportation. The Home Depot outlines how suppliers need to handle international imports or exports, from having the appropriate documentation to sufficient packaging and security. Transportation conditions include a routing guide suppliers follow. Pricing strategies involve movement along the Demand curve (McConnell, Brue Flynn, 2011) In a market with high price elasticity of demand, such as a monopolistic competitive market, a small reduction in price will have a large effect on demand. Non-pricing strategies involve shifting the demand curve to the right, such as by a TV advertising campaign. This is a common strategy in markets with low price elasticity of demand, such as oligopolies. Marginal Factors When operating from a global perspective, it is important to understand what patterns arise from the local markets. Being able to provide resources to these local markets is a critical part for a company like Home Depot to institute. From Home Depot’s store support center a global resource merchandise program will be maintained, this will provide customers access to source high-quality products directly from manufacturers around the world. Profit is maximized when Marginal Revenue equals Marginal Cost, to use it, a business needs to know how much it costs to produce one more unit of a service. A business can also use total revenue – total cost method (McConnell, Brue Flynn, 2011). Profit is maximized when the total revenue and total cost curves are farthest apart. Conclusion Home Depot demands the highest levels of product quality, innovation, availability, on-time delivery, safety in production and shipping, compliance with laws and codes of conduct, and sensitivity to brand reputation is a major influence to the customer service strategy and innovation to products, policies, and procedures. The variety of products, analyzing, shipping, import details, contracts information and processes broaden potential business movement controlled by procurement decisions and influences of policies. The relationship with many state and federal laws restricts and offer different business treatment and regulations. Choosing a combination of strategies having the biggest effect on demand in the company’s industry may be best. How to cite Home Depot, Papers Home Depot Free Essays The home depot has been around for many many years. It all started out a partnership and became a corportation that it currently is today. The Home Depot was founded in 1978 by two poor men. We will write a custom essay sample on Home Depot or any similar topic only for you Order Now Their names were Bernie Marcus and Arthur Blank. They were accompanied by investment banker Ken Langone and merchandising guru Pat Farrah. They not only have stores throughout the United States but the Home Depot is a multinational corporation. They have broken into Canada, District of Columbia, Puerto Rico and Mexico. They are the United States’ largest retailer behind Wal-Mart. They are the largest home improvement retailer though. In 2000, the arrival of the new Chief Executive, Robert Nardelli, had changed the business strategy of the Home Depot to a more militaristic style. Under Nardelli’s leadership, Home Depot is becoming more centralized and the good financial reports following this are signs that it a good strategy. Nardelli started making the company look and feel like an army. He loved to hire soldiers, because they were already trained with the discipline that he felt necessary to run a successful business. The Home Depot’s stock is traded on the New York Stock Exchange and is included in the Dow Jones industrial average and Standard Poor’s 500 index. The Home Depot’s rival is Lowes. The Home Depot has benefits well from â€Å"Hurricane Preparation. † Since June, the Home Depot has outperformed Lowes by nearly 10% and most of the broader market by 6%. The Home Depot has about 500 more stores than Lowes and its expected sales growth are supposed to increase by a 4. 6% over Lowes. The sales for the fiscal year 2000 were $45. 7 billion, compared to $38. 4 billion in fiscal 1999. As of January 2001, the company was operating 1,134 retail stores in forty-seven states, six Canadian provinces, Puerto Rico, Chile and Argentina. Revenue increased from $45. 7 billion in 2000 to $81. 5 billion in 2005, while profits rose from $2. 6 billion to $5. 8 billion. While this was a slower growth rate than Home Depot had experienced in the past, it was because past growth was due to the company’s rapid expansion. The Home Depot Direct Stock Purchase Plan (DSPP) enables you to invest a minimum amount in Home Depot stock and build your stock ownership over time. In addition for the Home Depot to grow they will be increasing their quarterly dividend $0. 29. Also the Home Depot has been paying its’ shareholders a quarterly dividend for over a 100 consecutive quarters, currently yielding at 2. 05%. In the past couple of years the profit margin of the Home Depot has gone up. In 2009-3. 17%, 2010-3. 95%, 2011-4. 90%, 2012-5. 51%, last twelve months-5. 96%. The cash flow from the Home Depot is approximately $6. 6 billion. The key for the Home Depot will be revenue growth. The future looks very bright for the Home Depot to invest stock into as long as it can grow revenue for the next year. However, this year the company reported revenues that seem to be in a down-spiraling situation. This month the â€Å"orange giant† is being faced with a serious drop in its earnings per share and many analysts are contributing this drop to the possibility that Home Depot may of hit the wall. With analysts banking on a 25% growth rate, Home Depot bar ely managed to achieve half of that; reporting only 13% in its fiscal third quarter earnings. There are many reasons for this outcome and there are ways that Home Depot plans on overcoming these â€Å"threats† that are reducing their earnings. The Home Depot is a How to cite Home Depot, Papers Home Depot Free Essays In addition they also responded to concerns bout its environmental impact by creating new standards to govern its relationship with its suppliers. The legitimacy of the company and stakeholders also showed because they wanted to make sure that Home Depot’s appearance of being environmentally responsible is not a sham. Home Depot showed their urgency by responding immediately to growing need for large corporations to become economically responsible. We will write a custom essay sample on Home Depot or any similar topic only for you Order Now Home Depot strategies and performance with the environmental and employee stakeholders is a proactive approach as well as doing ore than what is required in the industry. They have donated millions to Red Cross and other relief funds, they also opened workshops for women, children and new homeowners. This earned them a â€Å"A† on the Council on Economic Priorities Corporate Report Card and a Proactive on their business approach to be environmentally and socially responsible. Home Depot Justified the budgeting of so much money for philanthropy as a publicly traded company because they feel that this is something the stakeholder like to see in a company. When Home depot suspended the stock uh-back program in 2007 to avoid losses and to prevent from borrowing they used their own revenues to cover their expenses. The stakeholders and customers were happy that the company could stay a float as well as donate millions to environmental and social issues. Home Depot may also benefit from some type of scholarship fund or tuition reimbursement program for the employees. Or saving as many tree in the Rain Forest as they cut down in other forests by donating. Home Depot stopping expansion of new stores and upgrading the remaining stores seem to e a good strategic plan. By using their on revenues to cover their expenses instead of borrowing prove to be a good measure as well because as the recession subsides they were still the number one in the industry and did not owe any creditors. My suggestion to the CEO is to continue doing as you are and you will continue to be number in the industry. Key Stakeholders And Concerns : Shareholders: economic and profit concerns Employees: EEOC concerns Environmental: Abiding by Environmental Principles Customers: has the stores improved Key Facts: Home Depot manage customers relations by consolidating marketing and merchandising functions; Which helped customers to do home improvement projects more effectively and efficiently. The company had its ups and downs with its ratings due to their proactive approach. They showed good customer service and social responsibility by starting workshops for women, children and new home owners to teach them basic carpentry skills, starting as young as five years old. Home depot Environmental initiates started when they adopted a set of environmental principles . Guided by these principles, Home Depot has initiated a number of programs to minimize the firm’s and its customers impact on the environment. Home Depot focuses corporate social responsibility efforts on affordable housing and disaster relief. In 2002 the company founded the Home Depot Foundation, which provides additional resources to assist nonprofits in the United States and Canada. 1997 the company settled a class- action lawsuit brought by female employees who alleged that they were paid less than male employees, awarded fewer pay raises, and promoted less often. Home Depot encourages employees to become involved in the community through volunteer and civic activities. Home Depot has worked to show that it appreciates workforce diversity and seeks to give all its associates an equal chance to be employed and advance in its stores. CEO Frank Blake decided to halt expansion and focus on improving existing stores. Shut down expo stores that catered to the wealthier class. Home Depot reaction to the recession was swift and decisive. Initiated new technology to improve customer service and become more efficient. How to cite Home Depot, Papers