Home Depot Swot Analysis Paper

In 1978, when two executives Bernie Marcus and Arthur Blank received news they were fired from their jobs at Handy Dan Home Improvement Centers, they decided to take something negative and turn it into an opportunity. They put their experience and knowledge of the business and industry together and developed a business plan to create a chain of home-improvement warehouses. Their idea was to create a business which would be larger and more profitable than any of their competitors. So in 1979, one year after being fired, they acquired their funding and opened three stores in Atlanta which they branded with the name Home Depot. Today, Home Depot is the world’s largest home improvement chain and second-largest retailer after Wal-Mart, operating approximately 2,250 stores throughout the Americas (Parnell, 2014).
The Home Depot organization has generated quick growth throughout its operating years. From the first store openings in 1979, the firm has created an exceptional growth pattern, opening their 100th store in 1989 and continuing on into the global market. The company feels that their unique culture and values are what gives them their competitive advantage in the marketplace. Their strengths are in the strong position they have with professional

customers, like builders and contractors, who generate about 35% in sales and the fact they carry a wide array of private brands on top of the national brands customers seek (Fortune, 2015). They are the fourth largest retailer in the U.S. and rank fifth in the world. They also utilize their success in the market to give back to the communities in which they operate by donating to nonprofit organizations to improve homes and lives in their communities, they use green energy practices in their operations, and are partners in disaster relief efforts.
Issues home depot has faced in the past from recessions and housing crisis’ to a massive payment data breach in 2014, they have had to reposition their strategy. They have enlarged their focus to become a bargain-priced DIY store by reducing prices on its best-selling items, enhanced their stores appearance to attract a larger female demographic and increased customer service training (Cassidy, 2014). They are also setting their sights on a major upgrade to its fulfillment processes to support e-commerce sales. With this new innovation and technology they will bring their brick-and-mortar operations together with its digital platform to allow consumers the ability to shop from anywhere.
Home improvement in the United States as well as the global market has increased rapidly over the years. With DIY projects and projects that are contract out, firms are continuously looking for ways to attract consumers in need of their products and services. But in this market, consumer’s preference and buying habits are not the only determining factors when a firm measures their environment looking for opportunities. The major driver of home improvement retail industry is increasing new and existing home sales, increasing disposable income, rising consumer spending, remodeling and renovation of homes, urbanization, and increasing middle class population (Olick, 2015). With such a dynamic market firms like Home Depot have had to maintain a clear strategy in order to compete in this industry. And with competition like Lowe’s, True Value and Menard’s operating under the same business model as well as issues with the economy and fluctuating housing market, they have had to be flexible in their strategic decisions in order to stay competitive.
References:
Cassidy, W.B.

(2014). Home Depot’s New Strategy Tied to E-Commerce Growth. JOC. Retrieved August 9, 2015, from http://www.joc.com/international-logistics/distribution-centers/home-depot%E2%80%99s-new-strategy-tied-e-commerce-growth_20140307.html
Fortune, (2015). Home Depot Ranking. Fortune. Ret http://fortune.com/fortune500/home-depot-33/reived August 9, 2015, from http://fortune.com/fortune500/home-depot-33/
Olick, D. (2015). Competition rises as home remodeling goes digital. CNBC. Retrieved August 9, 2015, from http://www.cnbc.com/2015/04/27/competition-rises-as-home-remodeling-goes-digital.html
Parnell, J. (2014). Strategic Management: Theory and Practice (4th ed.). Los Angeles:

SAGE.