Free Essay

Home Depot

In: Business and Management

Submitted By cmorzan
Words 1495
Pages 6
Home Depot

A. Executive Summary * Introduction * The Home Depot Story - First Stage (1979-2000) * The Home Depot Story – Second Stage (2000 – 2006) * Problem Identification * Case Questions

Introduction * Home Depot was founded in 1978 in Atlanta, Georgia by Bernie Marcus and Arthur Blank. * Both of them worked at Home Improvement Company in California and were fire by this company. * So instead of looking for a new job they decide to start up their own business based on a vision they had. * This vision was about creating home improvement stores similar to warehouses where customers would be able to find different types of tools and products with the help of experts in home improvement and customer service. * Home Depot created the concept “Do it yourself” (DIY) where homeowners were encouraged to buy products and tools and to use them to build, repair and improve their own homes. * This concept of “Do it yourself” was Home Depot’s main strategy to become successful in the Home Improvement industry. The “Do it yourself concept consisted on: * Prioritizing customer service (special attention to their customers problems) * Providing customers with training workshops and clinics to teach them how to repair their own homes. * Vendors and sale associates went through a rigorous training in product use before servicing customers. * Sales associates develop relationships with customers rather than just merely seeing the sale as a transaction. * The growth of the company was quite fast. We can see that in the following figures * In 1979 the two first home depot stores were opened. * By 1980 they achieved $22 million in sales in only four stores they had. * By 1990 Home Depot achieved $3.8 billion in sales with 145 stores and in that way Home Depot became the top U.S. retailer in the home improvement industry. * To explain things in more detail we have divided the story of Home Depot in two stages. *
The Home Depot Story (First Stage) * The first stage goes from the years 1979 to 2000 (first 20 years) when Bernie Marcus and Arthur Blank were managing the company. * So during this first stage Home Depot had the following characteristics: * All stores were independent from each other (run rather informally). In other words each store manager run its own store operations. For example, each store decided their employees’ wages, what merchandizing was going to best for the store, and what promotions the store should display. So the operational decisions each store took were based on the local market needs and preferences. * Purchasing was decentralized. There were nine regional purchasing offices in total that negotiated separately with suppliers. Blank believed that decentralization would help increment sales between 15% and 20% as each local store would be able to understand better the local needs of that particular market they were in. * Home Depot had full time employees who were like experts in home improvement. * They pay well to their employees staying away from minimum wage. * These strategies kept productivity high and turnover low. * Focus was on customer service and sales growth. * As purchasing grew in size, Marcus and Blank thought that a more disciplined approach to operations would be important for further growth. * In the year 2000, the company hired Robert Nardelli to lead this change.

The Home Depot Story (Second Stage) * The second stage goes from the year 2000 to the year 2006 when Nardelli was hired. * Nardelli conceived the following strategy in order to respond better to the demands of the market: * Extending the business into new lines: tool rental and home installation of Home Depot products. * Expanding the market geographically: Nardelli expanded Home Depot’s market to Mexico. * Expanding the market with new types of customers: Expanded the wholesale business of products and services to a wide range of professionals such as plumbers, electricians, industrial contractors rather than to the traditional do-it-yourselfer customer. * Making existing operations more profitable: Major changes were made to fundamental retail functions such as merchandising, vendor management and store operations. * Nardelli centralized Home Depot’s merchandizing and purchasing. For example, to support centralized merchandising, Home Depot spent $1 billion to modernize the retailer’s technological infrastructure and IT systems. * Introduced the Six Sigma quality methodology to make Home Depot’s store operational processes more efficient. * He made changes to improve productivity, to increase data accuracy, and to improve labor scheduling.

B. Problem Identification First Stage * Managers at stores didn’t process paperwork because they were busy on the sales floor attending customers. * Merchandising was based on each store manager’s local market intuition and not on metrics, tools or data for quantitative analysis. * Decentralized purchasing squandered the chance to drive down costs and boost gross margins. * Promoting autonomy and responsiveness also implied difficulty in delivering on agreements with vendors. * Home Depot’s decentralization also meant there was little communication among managers and limited ability to negotiate national deals. * While the company could generate national wide store displays from its headquarters, it could not easily coordinate them with nationwide purchasing. * The company’s decisions were based on emotion rather than data. * Home Depot was years behind other retailers in technology (like Wal-Mart). * There was no general counsel, no chief marketing function and no CFO.

C. Problem Identification Second Stage – Nardelli Era * Customer service declined. Hire part time employees with lower wages to cut costs. New focus and strategies implemented by Nardelli prevented them from delivering excellent service. * Decline in the stock price. * The time spent by managers on floors to serve customers was reduced because they had to monitor their store numbers. * Several stores responded to the “inventory velocity” metric requirement by reducing the amount of inventory coming in, leading to stockouts.

D. Key Case Facts * Customer Service * Product Knowledge * Do it yourself

These are the key case facts because without them Home Depot wouldn’t have been a successful retailer.

E. Case Questions 1. Discuss the pros and cons of Nardelli’s changes in a) centralizing purchasing b) centralizing merchandizing. Then defend why you agree or disagree with this changes.

a) Pros Centralizing Purchasing: * Greater purchasing power: * This allowed to make exclusive deals with certain vendors that in the past were unavailable for Home Depot such as John Deere. * Negotiated better deals. Eg: extended payments terms to 45 or 50 days from the typical 30 days. * Cost savings. * Addressed inefficiencies in operations. * More control of inventory. * Improve customer service. * Greater control of over the mix of products in store. * Better manage of vendors. * Allowed Home Depot to set up relationships with loyal vendors and fewer entities.

Cons Centralizing Purchasing * All stores would offer the same product mix (if you are looking for some product in particular you would not find it). *

b) Pros Centralizing Merchandising * Better stock control

Cons Centralizing Merchandising *

2. What caused the decline in customer service at Home Depot?
In order to make Home Depot more profitable he cut costs by hiring employees with lower salary and with less knowledge and experience. Home Depot hired part time workers. In that way he sacrificed the cost of serving customers well at the expenses of making Home Depot more profitable.

There were fewer vendors than before. Many employees who had grown in the Marcus and Blank era felt that the new strategies implemented by Nardelli prevented salespeople from delivering excellent service.

3. What metrics would you use to assess the effects of Nardelli’s changes on profitability, labor productivity and customer service?

Profitability: * Look at the net income in the income statement. * Review profitability ratios to know the earning power of the company (Return on Sales, Return on Assets)
Labor Productivity * Individual basis evaluation. For example, how many products did the employee sold. * Total output production versus number of employees. * Workers productivity per hour (total output / number of hours worked)
Customer Service: * Customer surveys to measure satisfaction. * Expenditure in advertisement versus sales levels. * Expenditure on market research.

* Home Depot is the world’s largest home improvement retailer with more than 2200 retail stores in the United States, Canada, Mexico and China. * Home Depot was founded in 1978 in Atlanta, Georgia by Bernie Marcus and Arthur Blank. * They opened the first two Home Depot stores in 1979. * Home Depot popularized the concept of “Do it yourself”. * This concept consisted on encouraging homeowners to build, modify or repair their homes by themselves without the aid of experts or professionals. * During it first 20 years (1979 – 2000) the company was run rather informally. All stores were independent from each other. For example each store decided their employees wages, what merchandizing was going to be best for the store and what promotions the store should display. So the operational decisions each store took were based on the local markets needs and preferences. Purchasing was decentralized. * As Home Depot grew in size a more disciplined approach to operations was needed. Hire Robert Nardelli (2000- 2006). * Nardelli centralized merchandising and purchasing. He simplified and standardized store processes and operations using Six Sigma quality methodology. * Nardelli’s changes led to higher profitability but customer service declined and stock prices remained unchanged.…...

Similar Documents

Free Essay

Home Depot

...THE HOME DEPOT’S ORGANIZATIONAL COMMUNICATION Organization Communications Mgmt 305 Potomac College  Abstract This paper will analyze the culture of The Home Depot and its communication practices. This will be accomplished by examining the dimensions of the organization’s structure. The Home Depot’s sociability, power distribution and job autonomy, degree of structure, achievement rewards, opportunities for growth, tolerance for risk and change, conflict tolerance, and emotional support will be used to determine if the organization has a Theory Y culture.  Introduction Home Depot is considered to be one of the top ranking home improvement organizations. The mission statement of this organization was formulated around being “committed to maximizing long term shareholder value while supporting management in the business and operations of the company, observing the highest ethical standards and adhering to the laws of the jurisdictions within which the company operates” (Homer TLC INC, 2010). The Home Depot transformed the “home improvement industry” by providing a well round reputation for products, corporate governance and strong values within the community. The purpose of The Home Depot remains to build relationships, have social responsibility, and concrete ethics as an organization. Employees are respected, offered growth and reputable incentive plans. Public policy makers and Home Depot collaborates on ideas to assure prosperity in our society. Home Depot......

Words: 2579 - Pages: 11

Premium Essay

Home Depot

...During 1985 The Home Depot implemented its major expansion, which added 20 new stores in eight new markets. The Home Depot made huge investment of capital expenditures, inventory and personnel. As a result, The Home Depot’s earnings dropped 42% from $14.1 million to $8.2 million, while revenue increased 62%. Since this expansion is largely financed through debt, the financial leverage increased rapidly from 1984 to 1986. With increased asset base by adding new stores and reduced profitability, The Home Depot’s ROA and ROE both dropped about 50%. The selling, general and administrative costs were about 20% of sales in both 1985 and 1984; however, due to this major expansion plan, selling costs increased by 12%, making Home Depot’s profits not keeping up with its sales. The Home Depot’s biggest competitor was Hechinger, which had operated hardware stores for a long time and recently entered the do-it-yourself segment of the industry. Unlike The Home Depot’s low cost strategy, Hechinger aimed at upscale stores and high profit margins. While in the same period, Hechinger also experienced a decline in performance, with lower ROA and ROE in 1985. However the decline is less than 2% each year, which is relatively small compared to that of The Home Depot. In addition to having stable performance, Hechinger also had stronger ratios compared to The Home Depot’s, with higher Gross Profit Margins and lower selling costs. However, The Home Depot had a 24% higher Asset Turnover rate,......

Words: 488 - Pages: 2

Premium Essay

Home Depot

...External Environment Analysis Introduction This essay is written in regards to the Home Depot and the evaluation of their external environment. The Home Depot is a highly successful retail industry that has expanded globally. The Home Depot has a wide variety of supplies and materials for all home improvement projects. They even have tools, equipment, and trucks that can be rented out to assist with any larger home improvement needs. The Home Depot has made a continuity plan to assist with protection of the customers, associates, and the industry if a crisis or disaster occurs. A continuity plan is basically the instructional list or procedures for the company in the event that a crisis or natural disaster occurs and how they will handle that event. This essay will look at how the external environment affects that plan. This essay will also look at the affects of the environment in three other areas as well, including general, industry, and competitor. Finally, it will look into the business ethics and see how they play a role when gathering information for competitor intelligence. The Home Depot has a continuity plan that they follow that can be found in their code of conduct and ethics manual. That continuity plan is as follows: “We are committed to taking all reasonable steps to minimize risks to our associates, customers, facilities, information assets and supply chains and maintaining the continuity of our business when a crisis occurs. A crisis can be natural or......

Words: 304 - Pages: 2

Free Essay

Home Depot

...​Frank Blake is the chairman and CEO of The Home Depot. Prior to his appointment to this position in 2007, he served as vice chairman of the board of directors and executive vice president of the Company. He joined The Home Depot in 2002 as executive vice president, business development and corporate operations. Frank previously served as deputy secretary for the U.S. Department of Energy (DOE). Prior to that, Frank served in a variety of executive roles at General Electric, including senior vice president, Corporate Business Development.  Frank’s public sector experience also includes having served as general counsel for the U.S. Environmental Protection Agency (EPA), deputy counsel to Vice President George Bush and law clerk to Justice Stevens of the U.S. Supreme Court. Frank serves on the board of directors for the Georgia Aquarium. He holds a bachelor’s degree from Harvard University and a jurisprudence degree from Columbia University School of Law.    Senior Leadership Team Indent denotes a direct report to CEO Staff. * Matt Carey, Executive Vice President & Chief Information Officer * Cara Kinzey, Senior Vice President - IT Store, Field and Corporate Support * Tim Crow, Executive Vice President - Human Resources * Bill Lennie, President - The Home Depot Canada * Craig Menear, Executive Vice President, Merchandising * Giles Bowman, Senior Vice President - Merchandising, Building Materials * John Deaton, Senior Vice......

Words: 352 - Pages: 2

Free Essay

Home Depot

...Question 1 Home Depot (“HD”)Strategy The home improvement industry was a large one with industry sales approximated at $80bn dollars in 1985 and had grown at a compounded annual growth of 14% over the last 15 years. HD’s strategy was to bring the warehouse retailing concept to the home center industry, a DIY concept in a warehouse which sold an array of building materials and home improvement products on a cash and carry basis. The company targeted individual homeowners and small contractors as it customers. The strategy had important elements which included offering low and competitive prices, were situated in suburbs and stores were also the warehouse which allowed HD to keep overheads low and pass savings to customers. They also serviced mainly “sunny” areas which would be more conducive and aligned to their family driven DIY concept. HD carried approximately 25000 stock keeping units thus increasing convenience and minimising out of stock occurrences. They offered customers the nationally advertised brands as well as lesser known brands accompanied by guarantees from either HD or the manufacturer. The biggest value add to their strategy was the sales assistance, whereby they employed largely on a full time basis, skilled, technically apt employees who were also trained further at HD, to enhance their sales offering. To complement the above HD embarked on aggressive advertising programs to attract customers. The last part of the strategy was to grow......

Words: 2424 - Pages: 10

Premium Essay

Home Depot

...Home Depot Patsakorn Niruntasukrat Mahidol University International College Preparation Center for Language and Mathematics February 27, 2014 Home Depot Foundation's Sustainability Obama stated that “It is not a choice between our environment and our economy; it is a choice between prosperity and decline” (“Sustainable Development Strategies”, 2009). Sustainability means the balance of three things which are steady business, society and friendly environment. In other words, businesses must show crucial responsibility in terms of environmental impacts and social responsibilities. Consequently, businesses must utilize natural resources carefully, and the economic growth and employment rate of businesses must be increased (“Understanding Sustainability”, n.d.). Therefore, sustainability is an aim of businesses. The Triple Bottom Line or TBL is a significant tool advocating sustainability goals. The concept of TBL emphasizes three things, which are healthy communities (people), clean environment (planet) and stable profitability (profit) (“Slaper & Hall”, n.d.). In contrast with the past, many businesses, nonprofit organizations and government entities tend to follow this guideline. Home Depot is one of the best examples of companies which are following the TBL standard. Home Depot is the world biggest home improvement retailer (“​Did You Know”, n.d.). The company was established by Bernie Marcus and Arthur Blank in 1978. The first two stores opened on June 22...

Words: 1929 - Pages: 8

Premium Essay

Home Depot

...Growth in Sales: Home Depot had a nice track record of growth up until 1985, in which it implemented its most ambitious expansion plan to date. HD added 20 new stores in 8 new markets that fueled top-line sales growth of 62% from $432m in 1985 to $700m in ending 1985. 9 of the new stores were acquired in the purchase of Bowater. Growth in Total Assets: Growth in total assets was fueled by HD expansion plan in opening new markets. The purchase of Bowater's 9 locations in 1984 along with increase PPE to open 11 new storefronts increased inventories heavily. PPE additionally drove up assets beginning in 1984 with the costs associated with real estate transactions. Combined, HD estimated that opening a new store costs $8.4m in asset resources. Change in Net Income: In a letter to shareholders from fiscal 1985, HD commented on their investment in long-term growth and how it impacted short term-results. Up till 1985, HD net income showed strong and steady growth. Fiscal 1985 earnings declined 42.8% from previous record levels. The strongest factor sited for the decline is expansion, which led to more stores which increased COGS, depreciation, personnel expenses, and interest expenses. Growth in Long-Term Debt: HD growth up until 1984 was funded primarily from existing store operations, with a significant source of liquidity since sales are on a cash-and-carry basis. The company has supplemented its operations cash flow with bank credit, equity and debt......

Words: 1555 - Pages: 7

Premium Essay

The Home Depot

...The Home Depot Johnathan Benson ETH/316 3/4/2015 Clement Stubstad The Home Depot The Home Depot is the world's largest home improvement store. People from all over the world, shop at The Home Depot for all their home improvement needs. Currently, the company is listed in the number thirty-three spot on the Fortune 500 list. The Home Depot has eight core values where they speak of not only the community and their employees, but they also speak about their commitment to their shareholders. The Home Depot states (The Home Depot Values, 2013) " The Home Depot's values guide the beliefs and actions of all associates on a daily basis. Our values are the fabric of the Company's unique culture and are central to our success. In fact, they are our competitive advantage in the marketplace. Associate pride and our "orangeblooded" entrepreneurial spirit are distinctive hallmarks of our culture." These values are listed as; Taking care of our people, Giving back to our communities, Doing the right thing, Excellent customer service, Creating shareholder value, Building healthy relationships, Entrepreneurial spirit, and Respect for all people. These values have helped the organization grow over the years, however; these values have helped the company grow tremendously since 2013. Home Depot's values are very near and dear to the heart of CEO and President Craig Menear. He believes that these values are what will make The Home Depot grow. As a stakeholder in any company, an......

Words: 947 - Pages: 4

Free Essay

Home Depot

...Running Head: Home Depot Talent Practices at Home Depot Shaniekia Moore Strayer University Dr. Sheila Letica Talent Management HRM 532 January 20, 2011 Lockwood, (2006) determine that in a competitive marketplace, the talent management process is one of the most important driver for organizational success. Home Depot maintains its’ competitive edge by using their organizational talent in the Do It Yourself industry. This is achieved by having an exemplary organizational structure of values, principles, and beliefs. In achieving that status, Home Depot’s emphasized the importance of employees’ knowledge of the business and their enthusiasm, (Grow, Brady & Arndt, 2006) and hiring of dependable and knowable older workers (Silzer, & Dowell, 2010). In addition to be effective in maintaining that competitive edge Home Depot has various programs that focused on a wide array of leadership development. They encouraged cross-functionality across the company (Gandossy and Verma, 2005), groomed internal talent to allow for peer tutoring from other executives (Gandossy and Verma, 2005) underscored the importance of human capital and engaged store associates in creating a superior customer experience (Silzer, & Dowell, 2010). The key channels that Home Depot developed for recruiting talent, is focusing its recruiting efforts on older workers by partnering with the senior citizens group, American Association of Retired Persons (AARP), (Tucker, Kao, and......

Words: 883 - Pages: 4

Premium Essay

Home Depot

...Risk Assessment Introduction Home Depot was founded in 1978 by two individuals and they are Bernice Marcus and Arthur Blank. The two wanted to change the way people thought and took care of their home and their gardens. They created the do it yourself concept and that way of thinking has caught on and has spawn across the globe. Home Depot headquarters are in Atlanta, Georgia. Today Home Depot is the largest home improvement retailers. It has over 2200 stores throughout the United States and that also includes Puerto Rico, U.S, Virgin Islands, Canada, Mexico and even China. Home Depot employs 317,000 individuals in all off the stores. Home Depot sells anything from carpenter needs, carpet, appliances and most everything that a person would need to complete their do it themselves projects. Strengths and Weakness The Home Depot stores has a variety of areas where their strengths and weaknesses are greatly measured and used to help make their business and their stores strive and be successful. The first area that is going to be mentioned is the stores. To begin the strengths of Home Depot it has to start will all of the employees. It also builds it strengths around their merchandise that they carry. They want to make sure that they have everything that a do it yourself person to do their construction that they need to do. Projects are what people want to do to make the necessary improvements to their homes and landscapes. Home Depot wants to make their customers......

Words: 1288 - Pages: 6

Premium Essay

The Home Depot

...The Home Depot, Inc. ACC/497 The Home Depot, Inc. Management, board of directors, and potential investors gain crucial information on the status of a company by reviewing and analyzing the different financial statements. A financial statement allows users a peek into its financial well-being in order to make informed decisions in relation to that company. One of the most common financial statements is the income statement and is frequently referred to as the profit and loss statement. Following the financial statement and/or profit and loss statement is the balance sheet and cash flow statement. Both are equally as useful when making decisions and gaining insight on a company. The following analysis has been put together using the income statement and/or profit and loss statement, balance sheet, and cash flow statement for The Home Depot’s Inc 2008 fiscal year. The Consolidated Statement of Earnings gives users insight into the company’s expenses and earnings incurred during a specific fiscal year. After reviewing The Home Depot’s income statement for the 2008 fiscal year, it displays a company with strong sales numbers of $71 billion for the year. While $71 billion in sales seems impressive, The Home Depot Inc. actually had a $6 billion dollar decrease in sales from the previous year. The Home Depot Inc. attributed this considerable decline in sales to the struggling U.S. residential construction and home improvement market. Along with their drop...

Words: 980 - Pages: 4

Premium Essay

The Home Depot

...statement of cash flows. This paper will analyze Home Depot, Inc. 2008 annual report. The Home Depot, Inc. The Home Depot is a public “do-it yourself” home improvement and construction retailer. The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank (depot, 2015). The company’s website states that “today The Home Depot is the world’s largest home improvement specialty retailer, with more than 2,200 retail store in the United States (including Puerto Rico and the U.S. Virgin Islands), Canada, and Mexico” (depot, 2015). The Consolidated Statements of Earnings The consolidated statement of earnings or commonly known as the income statement is a financial statement that measures a company’s financial position over a specific accounting period. The statement includes: revenues, expenses, gains and losses. The fundamental equation used to generate the income statement is Revenues-Expenses=Profit or Loss. A consolidated statement of earnings combines all major expense accounts into broad categories to provide simplicity. This allows readers of the statement to see a high level overview of operational performance in a single location. Investors can use this information to predict the financial performance of a company in the future and forecast the probability to stock price will rise in value. Likewise, creditors can use this information to ensure that a company can generate sufficient income to pay its bills. The Home Depot’s 2008 annual report includes......

Words: 921 - Pages: 4

Free Essay

Home Depot

...Home Depot Background: The Home Depot’s got started in the year 1978, Bernard Marcus, Arthur Blank, Ron Brill, and Pat Farrah were the founders. The owners Marcus and Blank got the $2000,000 that was required from a group of investors; also they were given 2 years to get their business up and running. They did lease three unoccupied buildings from J.C. Penney in Atlanta, Georgia, determining that city was the best place to start up their first store. They successfully gathered another $3.5 million in the form of loans, which was used to procure inventory. Furthermore they hired 20 employees to help run the management end of the business. On June 22, 1979, the very first three Home Depot stores, staffed by 200 workers, opened up in Atlanta. The organization began with Marcus as the chairman of the board of directors and CEO, and Blank as the president. Home Depot’s Profile: * Employees: 256,300 * CEO: Robert L Nardelli * Subsidiaries: EXPO Design Center; Maintenance Warehouse; Georgia Lighting; Apex Supply Company; Your "other" Warehouse; Home Depot Commercial Direct Division; Total HOME * Notable Stores: Home Depot; EXPO Design Center; Villager's Hardware; Del Norte * Major Competitors: Lowe's; Menard; TruServ. Lowe’s at a Glance: Lowe’s and Home Depot are the two largest retailers in the home improvement industry. Lowe’s being the 2nd largest in the industry, however, It was originally incorporated as “North Wilkesboro Hardware” in...

Words: 358 - Pages: 2

Premium Essay

Home Depot

...Summary and Conclusion Home Depot remains the world’s largest home improvement retailer and makes for a sound investment choice. Its eight-core value system covers every cornerstone surrounding the industry and serves as a building block supporting its future ventures. It also allows the retailer to quickly adjust to market conditions and consumer needs, thereby maintaining the lead over competition. So far, the results have been favorable and will continue in the same direction for the foreseeable future, according to the historical financial data. The income statements and balance sheets from the past three years confirm the financial dependability of the company. Home Depot has maintained a steady 4% growth in gross profit and net sales all while increasing its current assets by nearly 8% in 2012. Most of the increase was reflected in its Cash and Accounts Receivables, which make the company more liquid. Furthermore, the company realized a 7% decrease in total current liabilities, respectively. Not only do the variations improve the liquidity of the company, but they also suggest that operations were mostly supported by long-term debt, which bear less interest and improve credit ratings. It could also be that Home Depot has found more efficient ways to conduct operations and reduced the need for external financing altogether. In addition, both, the return-on-equity and return-on-assets continued to rise during the past three years enforcing the company’s......

Words: 788 - Pages: 4

Free Essay

The Home Depot

...Background The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank in Atlanta, Georgia after they were fired from their executive post at the Handy Dan Home Improvement Centers in California. The founders began the home improvement company around their vision of “one-stop shopping for the do it yourselfer” opening their first two stores in 1979 in Atlanta, Georgia in a cavernous warehouses that dwarfed the competition stocking 25,000 stock keeping units (SKUs), much more than the average hardware store at that time, and staffing the stores with knowledgeable experts in home improvement and customer service. From the beginning, Home Depot was able to offer not only the best customer service in the industry by hiring employees knowledgeable and experienced in the business and by motivating the sales associates to develop relationships with the customers instead of seeing sales as a transaction, but by popularizing the concept of “do it yourself” (DIY) offering to homeowners and other individuals trainings workshops and clinics so customers could learn how to do it themselves. The Home Depot revolutionized the home improvement industry by bringing the know-how and the tools to the consumer and by saving them money. In 1980, Home Depot opened two more stores achieving annual sales of $22 million from all its four stores. By 1990, the company had opened 145 stores, employing 21,500 people, generating annual sales of $3.8 billion, and becoming the number one U.S.......

Words: 2091 - Pages: 9