Home Depot's Competitive Strengths

Operations Strategy

The Home Depot’s mission statement is “to provide the highest level of service, the broadest selection of products, and the most competitive prices." (Homedepot.com) In order for the company to follow through with their mission they provide their consumers with expertly trained associates who are able to teach customers how to handle power tools, change a valve, or lay tile. It is not enough to tell or sell their customer’s the product, the associates have to be able to show them out to complete their tasks through DIY clinics or one-on-one workshops offered by The Home Depot.

The Home Depot has remodeled its supply chain by building a foundation for a new type of fulfillment center designed to blend online and in-store

shopping together. The Home Depot recognized its customer value of online product research and inventory visibility by restructuring their supply chain to include development and deployment of distribution centers for store replenishment and direct to customer fulfillment. The company’s latest addition to their network of distribution centers is the direct fulfillment center (DFC), designed to support omni-channel capabilities. Omi-channel-- described as a type of retail that integrates the different methods of shopping available to consumers. This approach supports The Home Depot’s direct to customer fulfillment and store pickup for online orders.
Home Depot’s DFC and e-commerce approach are all part of an interconnected retail environment that allows its consumers with a range of options. When a customer visits the Web site to confirm if an item is in stock, they can also see the product’s location in an aisle and shelf. The shopping experience begins online, which drives traffic in the stores. Home Depot’s online offers provide the customers with options to buy online pick up in store, buy online ship to store, and most importantly, buy online return to store (which can be done anywhere in the United States).
The vision of Home Depot is based on eight (8) core values. The company’s values are (1) Taking care of their people (2) Respect for all people (3) Doing the right thing (4) Building strong relationships (5) Giving back (6) Excellent customer service (7) Creating shareholder value (8) Entrepreneurial spirit. These core values help Home Depot build a strong business culture between its associates and customers. The community the associates create by working together from inside the stores, distribution centers, and offices aids in providing the best products and services to their customers in order to build their home.
Home Depot’s transformation of building a distribution network to satisfy convenient shopping atmosphere for their customers does not only accommodate growth of the e-commerce channel but it only makes up a small part of the company’s overall sales. There are three tasks that does not fit with Home Depot’s operational strategy; productivity and efficiency, customer service, and
Home Depot’s passion and main concern is customer service, the goal is to build an emotional relationship with their customers. “If you have walked into a Home Depot on the weekend recently, then you might have noticed many more smiling employees saying hello to you. Try visiting during the week during off-peak hours. You will not receive the same greeting. In order to be great, Home Depot must offer this excellent customer service at all times.” (Moskowit, 2014)

Implementing a new operations strategy focused on our cost, the quality of our products, time, and flexibility will be able to maximize our customer’s experience while gaining an advantage over our competitors.
Cost: Initiate an overhaul of our supply chain that will include a series of new distribution centers called Rapid Deployment Centers along with a new warehousing and transportation management system. Instead of stocking a lot of product in our stores or distribution centers, we can send the flow of merchandise to our rapid deployment centers that are designed to rapidly distribute high volumes of merchandise throughout the entire country. Home Depot stores will now have goods in stock for customers; we will improve our inventory turnover times, lower fixed and variable cost, and improve our service levels to stores. As the Vice President of Home Depot, I see we have the capabilities of charging a reduced price to our consumers.
Quality: Home Depot will need to sell highly appealing merchandise.

Two major quality elements include a high performance design and great product and service consistency. Home Depot continues to reign over competitors by bringing innovative and exclusive products to its stores. We understand our shoppers, they are do-it-yourselfers who watch HDTV or have very specific needs. We have introduced Jeff Lewis, who is famous for flipping houses, tiles and paint into our product line up which is exclusive to The Home Depot. This gained a positive response from our customers because it offers high-end quality designer products at a reasonable

price.
Time: The Home Depot will always look at how we can improve on making our inventory readily available for our DIY customers and professional customers. Implementing our new software Project Sync will improve how our associates process freight from trucks into receiving areas and onto shelves on store floor. The software will lower the time it takes for our supply chain to respond to demand changes from shoppers and weather disruptions.
Flexibility: Home Depot must be flexible for change in order to meet specific requirements for its customers. We should be able to go above and beyond for our customers. Home Depot provides services such as installations and repairs for retail customers that are less likely to undertake projects on their own. They also provide services to its professional customers such as individual contractors and construction managers. These professionals require the ability to have their orders delivered to construction sites. Home Depot will enable these customers to schedule their delivery as far in advance as possible or as soon as 1 hour giving them the ability to choose the day of the week they prefer, including Saturday delivery.

Competitive priorities signify a strategic focus on building specific manufacturing capabilities that can improve a company’s position in the retail market.

The strength of an operations strategy is dependent on the level of consistency between competitive priorities and decisions concerning operational structure and infrastructure. Home Depot’s future relies on its associates, customers, and subcontractors. While Home Depot has done a lot of restructuring to remain at the top of the leaderboard in the home improvement industry, there is still a lot of improvements to be made in the future.

To be more efficient, Home Depot can ensure their associates receive continuous training on product knowledge in order to be more prepared to answer consumer questions. Customers have high expectations for Home Depot, in order to exceed those expectations; associates should have a thorough understanding of the products they are selling. Using technology to train employee about various products and corporate procedures can have its advantages and disadvantages. Difficulty can arise from (1) managers allocating time for associates to train from technology-based modules. This will take associates off the selling floor with only a few associates left to engage with Home Depot consumers (2) employees becoming unmotivated to learn because of lack of support and reassurance from management staff (3) technology-based learning approach does not appeal to everyone, making it difficult to retain the

information given. “E-learning is great for some situations because it's fairly efficient from a cost perspective and gets the information across. However, it does not drive the passion around product knowledge that we want in our associates.” (Tim Crow)
Home Depot launched its Product Knowledge Recognition Program to get associates motivated to learn. The program encourages associates to read about the merchandise directly from the carton. It also drives interactions between associate to customer and employee-to-employee conversations. Subcontractors such as carpenters and plumbers are hired to give advice to customers regarding their home improvement projects.
Home Depot’s business depends on customers who buy, sell, and improve their homes. For this reason alone, the company should make sure their associates and subcontractors should have the product knowledge that the customers want in order to minimize consumer complaints regarding installation, faulty products, or unprofessional service.