The Home Depot: A Competitor’s Strategic Audit, A Case Study
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- Akhtiara Erskine ,
- Angelo A. Camillo ,
- Alicia J. Bajada &
- Svetlana Holt
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The Home Depot, Inc. (Home Depot) was founded in 1978 by Bernie Marcus and Arthur Blank with the help of investment banker Ken Langone and merchandising expert Pat Farrah. The vision was of a one-stop shopping location for the do-it-yourselfer, and the idea materialized with the opening of the first two Home Depot stores on June 22, 1979, in Atlanta, Georgia. The first stores, each at around 60,000 square feet and carrying an inventory of over 25,000 items, were far larger than the average hardware stores of the time. However, the idea was not new in Europe. In 1962, Heinz-Georg Baus, a resident of Mannheim, Germany, had the idea of bringing all hardware specialty stores together under one roof. He had been looking for tools and building materials, and was continually frustrated by having to drive to numerous stores to find what he needed. The same year, he opened the first store called Bauhaus in Mannheim, with an inventory of about 25,000 products in a building measuring about 2, 691 square feet. Today, the German company has over 250 stores in 17 European and Near-Eastern countries (Bauhaus, 2014). Sixteen years later, Home Depot revolutionized the home improvement industry in North America by bringing the know-how and the tools to the consumer, and saving them money in the process.
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Erskine, A., Camillo, A.A., Bajada, A.J., Holt, S. (2015). The Home Depot: A Competitor’s Strategic Audit, A Case Study. In: Camillo, A.A. (eds) Global Enterprise Management. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137510709_11
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Publication date: 13 February 2024
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The Home Depot case is a great story. It's about entrepreneurship, growth, CEO leadership, and the dramatic impact, good and bad, a CEO can have on a company's growth culture, strategy, and performance. Home Depot had faced market growth challenges for the last seven years as it tried in numerous ways to reignite its growth engine. The case explores the growth strategies of CEOs Bernie Marcus, Arthur Blank, and Blank's successor Bob Nardelli, a former GE executive. After examining Home Depot's growth history, the case challenges students to devise a growth strategy for the company under a new CEO.
Hess, E.D. (2024), "The Home Depot, Inc.", . https://doi.org/10.1108/case.darden.2016.000307
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Home Depot in Chile: Case study
2006, Journal of Business Research
Retailing is rapidly becoming a global industry and many retailers are expanding to foreign markets. However, some retailers successful in their home countries have failed in emerging markets such as Chile. A case study of the failed operation of Home Depot in the Chilean market helps in understanding why retailers do not succeed in all international markets. This case study is based on expert and consumer interviews, and analysis of secondary sources such as the local press and company reports. The main objective is to assess the role of the foreign environment on the performance of international retailers, and the main mistakes made by internationalizing firms.
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Home › Insights › Case Studies › Case Study: From Pain Points to Progress – Union Pension Fund Optimizes Operations
Case Study: From Pain Points to Progress – Union Pension Fund Optimizes Operations
Operational process mapping and optimization opportunities for improvement.
Download a PDF of this case study .
Executive Summary
A client in the union pension fund space offers various services including healthcare benefits, retirement and pension plans, disability and life insurance and advocacy support. The company faced challenges with its business systems – expressing a need for comprehensive and holistic general organizational process improvements. Withum was brought in to assist in identifying and optimizing improvement opportunities to reach future state goals through prioritized initiatives effectively.
Withum undertook a comprehensive operational diagnostic to pinpoint the root causes of the client’s business process pain points. This allowed Withum’s business and management consulting teams to offer change management solutions and optimize an efficient roadmap of prioritized initiatives. Withum’s thorough assessment of the client’s business processes aimed to standardize and define operations so the client could be confident in their business systems. Consulting engagement efforts culminated in opportunities for improvement deliverables with a central focus on prioritized initiatives and key actions that would deliver the most value to the client.
The Challenge
The company recognized the need for a comprehensive overhaul of its business processes, primarily due to challenges identified by Withum. These included:
- A manual workload and underutilization of system functionality
- Data unreliability and lack of insights visibility
- A reactive approach to work
- Challenges with cross-departmental communication
- Risk management
- Siloed systems
These hurdles presented a significant operational transformation and improvement opportunity, which were further uncovered in a comprehensive operational assessment.
The Withum team identified several challenges that required a comprehensive approach to address. The challenges were not just related to the systems themselves but were indicative of broader issues in the operational model. The project aimed to align technology investments with strategic growth goals, which involved prioritizing initiatives amidst competing projects and goals.
With a complex systems architecture and high investment in more technology solutions, the client was becoming more inundated with half-complete workflows and complex workarounds that grew as the technology environment became more complicated.
This was rooted in the organization’s ability to prioritize initiatives. The company often took a “big bang” approach to solving issues by layering more technology, time and initiatives to patch problems far and wide. Withum helped facilitate prioritization with the business to help them plan to allocate their resources effectively, allowing them to roll out phased changes.
The client suffered from execution challenges that significantly impacted the roll-out of organizational changes. They were in fire-fighting mode so much in the day-to-day that they were not tactically equipped to support the execution of strategies.
The client team recognized that addressing system challenges alone was insufficient and that an operational transformation required elevating people, optimizing processes and implementing data controls alongside technology changes. This holistic approach was necessary to maximize the organization’s yield and ensure investments were made in the right areas. Elevating people would include addressing low-hanging fruit, elevating roles and responsibilities to be more value-added across the organization and having leaders be able to operate above the weeds.
In terms of low-hanging fruit, the client had multiple systems and sources of truth that they struggled to tie together. Instead of building an entirely new architecture up front, the optimal choice was to fix what we have today through training and minor process improvements. This would result in quick wins for the client team, increasing morale and client buy-in which is imperative for the project going forward. Given the heavy resistance to change in this organization, it’s important to note that quick wins are not a replacement for long-term solutions – they help to build momentum for longer-term initiatives.
These challenges highlight the complexity of the system modernization project, the need for a strategic, disciplined, accountable approach to drive value through the new system and the evolution of people’s roles and responsibilities in the organization. The project’s success depended on the collaborative efforts of the team to address these challenges effectively.
The Approach and Solution
The engagement with this client consisted of a comprehensive operational diagnostic and concluded with an opportunity for improvement. Withum undertook a current-state strategic, tactical and operational process mapping review and an initiatives prioritization workshop to determine the ideal sequence of events for introducing organizational change. To support workshop initiatives, the Withum team also utilized surveys to perform general sentiment analysis and uncover pain points that may not have been freely shared in a workshop environment.
The operational assessment revealed critical themes and challenges that, once addressed, will significantly benefit the organization. These insights emerged from evaluating the company’s organizational structure, technological footprint, operational pain points and inefficiencies. With this knowledge, we aligned the company’s strategic vision with a streamlined process.
Withum discovered that the client suffered from people, process, technology and data themes that offered significant organizational improvement opportunities. To combat these issues, the Withum team created comprehensive opportunities for improvement along with a detailed roadmap for company success. The roadmap was phased first to stabilize, optimize and grow the operations’ efficiency and effectiveness. Change management was factored in to change the organization’s approach from a “big bang” model to one focused on quick wins and holistic solutions.
Additionally, a change management user adoption approach was vital to gaining more ownership and active participation, contributing to the growth path potential for functions and the organization. A hybrid waterfall and agile approach was adopted to address immediate challenges while laying the strategic groundwork for future changes.
Three overarching pillars were identified to achieve future state success:
The Results, ROI
Through a successful partnership between Withum and the client, a thorough assessment was conducted to evaluate the maturity of the company’s business systems and processes. This evaluation led to the formulation of valuable recommendations that, once put into action, promised to strengthen and enhance the company’s operations. The primary objective is establishing stability within the organization’s core activities and advancing its capabilities toward long-term financial planning, analysis and operational efficiency.
Over time, the company will automate manual and time-consuming tasks, leverage valuable insights from its data and pivot towards predictive and prescriptive analytics to contribute to its business planning and decision making processes. The roadmap to address this transformation is anchored in a strategic orientation incorporating quick wins to tackle immediate challenges. It also follows a phased project approach, designates change champions and establishes a robust project governance framework to ensure successful execution.
For more information, please contact a member of our team.
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IMAGES
COMMENTS
The Home Depot expects to finance the furniture division using the same mix of debt (with operating leases considered as debt) and equity (in market value terms) as it is using currently in the rest of its business. 13. Taxes: The Home Depot's effective tax rate in 2016 was 36% but the marginal tax rate is 40%. 14.
Home Depot places their stakeholders into a pyramid shape with executives at the bottom of the pyramid, and with customers at the top. Front-line associates are on the second tier. Home Depot strives to treat. their associates well through compensation, coupled with opportunities for learning and career.
Craig Menear, chief executive officer of The Home Depot Inc. (Home Depot), recognized the need to be responsive to the changing retail landscape and changes in customer preferences. Customers were increasingly expecting to shop online and in-store interchangeably; thus, a seamless experience was critical. To remain a market leader in the do-it-yourself (DIY) industry, Home Depot focused on ...
The Home Depot case is a great story. It's about entrepreneurship, growth, CEO leadership, and the dramatic impact, good and bad, a CEO can have on a company's growth culture, strategy, and performance. Home Depot had faced market growth challenges for the last seven years as it tried in numerous ways to reignite its growth engine. The case explores the growth strategies of CEOs Bernie Marcus ...
Abstract. The Home Depot, Inc. (Home Depot) was founded in 1978 by Bernie Marcus and Arthur Blank with the help of investment banker Ken Langone and merchandising expert Pat Farrah. The vision was of a one-stop shopping location for the do-it-yourselfer, and the idea materialized with the opening of the first two Home Depot stores on June 22 ...
overlooked key factor to The Home Depot's success has been the blending its online and brick- and-mortar operations. They call this effort "One Home Depot" - a seamless customer experience across the digital and physical worlds. For the Technology team at The Home Depot, visibility is a critical part of supporting the One
The paper, by using the example of the US Home Depot in China, tries to analyze the behavioral factors impacting the success in the local place of its targeted market. 2. Description of the US Home Depot and Its Failure in China The Home Depot is a US company targeted at providing home improvement supplies on the international scale. The
Abstract. The Home Depot case is a great story. It's about entrepreneurship, growth, CEO leadership, and the dramatic impact, good and bad, a CEO can have on a company's growth culture, strategy, and performance. Home Depot had faced market growth challenges for the last seven years as it tried in numerous ways to reignite its growth engine.
The Home Depot- A Multi-Dimensional Renewables Strategy. CASE STUDYThe Home Depot—A Multi-Dimensional Renewables StrategyThe Home Depot (NYSE: HD) has more than 2,200 retail locations across all 50 states, th. District of Columbia, Canada, Mexico, and multiple U.S. territories. As a result, the retailer has implemented on- and of-site ...
The Home Depot, Inc. (Home Depot) was founded in 1978 by Bernie Marcus and Arthur Blank with the help of investment banker Ken Langone and merchandising expert Pat Farrah. The vision was of a one ...
Journal of Business Research 59 (2006) 391 - 393 Home Depot in Chile: Case study Constanza Bianchi * Escuela de Negocios, Universidad Adolfo Ibáñez, Presidente Errazuriz, 3485, Las Condes, Santiago, Chile Received 1 April 2004; received in revised form 1 March 2005; accepted 1 September 2005 Abstract Retailing is rapidly becoming a global ...
CASE STUDY ABOUT HOME DEPOT • Home Depot is a home improvement supplies superstore that sells tools, construction products and services. • Headquarters: Atlanta, Georgia • www.homedepot.com GOALS • Reach an intent-rich audience of home and garden do-it-yourselfers • Encourage them to visit local Home Depot stores
Abstract. For its first 20 years, Home Depot was known for its entrepreneurial spirit and focus on customer service. Merchandising, purchasing, and store operations were all decentralized. When the company hit $45 billion in sales, many believed that a more disciplined approach to operations would be important for future growth.
The Home Depot home‐services campaign yields remarkable results. 6-216 (02-09) " We've worked with Canada Post for years. We rely on their expertise with direct-mail campaign execution, their understanding of our business, and their supportive, expansive national network of partners and suppliers.". Airi Ritokoski, Direct Marketing ...
A Home Depot store open in Lodi, California, is the first store built using the new prototype design, and is the most energy efficient Home Depot store in the country. The Home Depot and the design team worked from the onset of the program to apply the CBP performance standard to its national portfolio of buildings, and evaluated energy efficiency
PDF version of the web based case study in English
nse of approximately $1.8 billion. And we expect between a 7% and 13% decline in diluted earnings. per share compared to fiscal 2022. As we discussed on our earnings call a few weeks ago, we view 2023 as a year of moderation after several years of unprecedented gro.
Download a PDF of this case study. Executive Summary A client in the union pension fund space offers various services including healthcare benefits, retirement and pension plans, disability and life insurance and advocacy support.