1. The Home depot
De’ Lonsum
Angga Graharya Suherman
Hadriana
Jogi Elliot Primantoro
Marcia Louise Mandagi
Rizki Ginardy
MBA ITB R45 Sefta Marisa Dwipasari jn

2. background
 Home Depot Inc. was founded in 1978 and is the world's
prevalent home improvement retailer and the second largest
retailer in the United States. The sales for the fiscal year 2000
were $45.7 billion, compared to $38.4 billion in fiscal 1999
 Home Depot stores sell a wide variety of building materials,
home improvement and garden products

3. Succeed in business
the company had completed 21 acquisitions.
the purchase of Hughes Supply, the largest acquisition in Home
Depot’s history.
the company had successfully expanded across the border to
become the largest home improvement retailer in both Canada and
Mexico.
The key success factors (KSF)
 are the ability to meet competitive pricing, a broad mix of products
and distribution capabilities
 The Company's focus on customer service
 The Company's focus on product authority
 The Company's approach to driving productivity and efficiency will be
achieved through disciplined capital allocation
Why stock price decrease
Because Nardelli increasingly being attacked for having
“excessive compensation,” given the poor the firm’s poor
stock performance.

4. Core and Distinctive competencies
 Operation and service excellence in retail industry
 One-stop shopping
 UPC scanning system to speed check out time
 High quality merchandise and services at low price

5. Home Depot’s Culture before
nardelli
 “named orange-blooded culture
 The Home Depot culture is distinct in retail”
 “extremely entrepreneurial and very customer focused”
Nardelli’s tenure
 Concentrated on overhauling Home Depot's business
processes, which did need to be addressed, but the
"overfocused" on the processes and swept aside the
elements that made Home Depot special
 increased the number of less knowledgeable part-time
workers at Home Depot's stores, which left full-time
employees fuming and led to a diminishment of
customer service, one of the company's strengths

6. Strengths – S Weaknesses – W
1. #1 home improvement retailer in the 1. Rising expenses
world / #2 retailer in U.S. 2. Store layout and appearance
2. Profits climbed 16% / revenues 13% 3. New store productivity remains weak
Home Depot in 2004 4. Revenue growth is slower than
SWOT Matrix 3. Innovative methods of differentiating industry average and Lowe’s
4. Dominant in lumber/building 5. 18% decrease in cash and cash
materials industry equivalents from 2002 to 2004
5. Efficient business model
Opportunities – O SO Strategies WO Strategies
1. International expansion 1. Open stores in Europe or Asia-Pacific 1. Expand product line to other areas
2. Consumer interest in one-stop markets (S2, S5, O1, O5) (W3, W4, O2, O6)
shopping 2. Buy out Kingfisher or OBI to expand 2. Sell wider variety of products online
3. Growth in global sourcing into those markets (S2, S5, T1, O5) (W1, W2, W4, O1, O3, O7)
4. Payback from IT investment 3. Experiment with different check-out 3. Open Stores in Europe or Asia-
5. Select industries expected to grow methods (S3, S5, O2, O7) Pacific markets (W4, O1, O5, O6)
6. Slow housing sales (more 4. Add more options such as fuel
remodeling) centers or convenience stores (S2, S3,
7. More “do it yourself” women S5, O2, O5)
Threats – T ST Strategies WT Strategies
1. Competitors (Wal-mart, Sears, 1. Increase market share by buying out 1. Open stores in every large U.S.
Lowe’s) Menard Inc., True Value, or Ace market (W3, W4, T6)
2. North American market saturation Hardware (S2, S5, T1) 2. Open Stores in Europe or Asia-
3. Contractor shortage / backlog in 2. Open stores in Europe or Asia Pacific Pacific markets (W3, W4, T2, T6)
home remodeling markets (S2, S5, T2, T6) 3. Supply contractors working in
4. 2003 Lawsuit Middle East reconstruction efforts
5. Overlap between H.D. and Lowe’s (W4, T1, T2, T3, T6)

7. Best future strategic
The home depot’s commitment
“Everyday low pricing compared from their
competitor”

8. Business and corporate
 Overall, Home Depot’s best chance for success is to
focus its strategy on several
 key efforts. By continuing to expand both within the US
and internationally in
 underdeveloped markets, Home Depot will be able to
continue corporate growth.
 Equally important is the advancement of an aggressive
advertising campaign
 backed by improved current stores and customer service
practices that will allow
 Home Depot to hold its current marketshare

9. Functional
The development of a business strategy involves coordination of
various function area:
Marketing
 Product line strategy - Segmentation strategy
 Pricing strategy - Information technology strategy
- Global strategy
 Distribution strategy - Internet strategy
 Communication messaging strategy
Production
 Manufacturing strategy
The strategic assets or competencies that underlie the strategy and
provide the sustainable competitive advantage.

10. RECOMMENDATION
 Home Depot should continue with its
current concentric/related diversification
growth strategy of using acquisitions to
move into the building supply segment of
the industry
 company’s reputation in home
improvement and its relationship with
suppliers should provide it with a cost
advantage