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... ine reached only up to 14, 000, Home Depot was able to sell 20, 000. Other data show also that Home Depot 156, 000 more visitors to their website than Lowes, again confirming to us the great effort and success at building brand loyalty and goodwill. Customers are loyal to this aspects, and the numbers showed before confirm it.
Also, the vast amount of distribution centers (over 1, 000 in 5 different countries) allows them to have an advantage of delivery on time and cost. While Lowes has to increase their delivery costs as distance increases. The growth expected by Home Depot is backed up by their constant expansion. For the fiscal year of 2001 they plan to open 200 new stores. With 23 years in the business it is not hard for them to open this new locations. They have been doing it for a while, so they should have an already established procedure to do it.
This advantage facilitates and minimizes the costs of opening new branches. With the increasing numbers of new housing units under construction, and the increasing amount of money spent on cost of materials used for construction in the U. S. , Home Depot has a great opportunity for growth of sales on future years. As per the Census Bureau there is an overall increase in the number of permits issued for construction, this means more constructions being started. In 1997 the number of permits issued was 111. 100 thousands of units, while in 2000 it was 131. 700 thousand. The cost of materials used for construction starts waves around the 18 billions of dollars.
And the total expenditures for maintenance, repair and improvements estimates are around 616. 100 millions. Also Home Depot only has 10 % market share of home improvement and building materials industry sales at the time. This figures gives a prospective of the great opportunity that Home Depot has for even greater expansion. 5. MAIN THREATS Home Depot confronts two main threats, both from the external environment of the organization: one is about environmental issues, and the other about its direct competitor.
As we already described before, Home Depot stores sell a wide assortment of building materials, home improvement, lawn and garden products and provide a number of services. Precisely some of those same products represent the threat. In North America there is a large percentage of homes and other constructions that utilizes building materials made out of wood. The wood coming from the old growth forests are in danger as a result of Home Depot using that resource and being the world's largest retailer of old growth lumber. Many activists and shareholders had pressured to stop the sale of wood products from "endangered areas" by the end of 2002, but the company did not formally release its new timber purchasing policy until eight months after its initial announcement with the publication of its 1999 Social Responsibility Report in April 2000. The report can be found on the Home Depot web site.
The company's timber purchasing policy has five elements: Give preference to the sale of timber certified as well managed by the Forest Stewardship Council (FSC) wherever possible. Eliminate timber contracts from endangered forest areas by 2002. Find and promote ways to use wood more efficiently. Promote and support alternatives to wood products. Ensure that timber suppliers are in compliance with existing laws and regulations. So until Home Depot doesnt comply with these environmental policies, this will remain as a threat to the organization.
Regarding to the second threat is caused by their direct and strong rival Lowes Lowe's Companies Inc. is a retailer of home improvement products, with a specific emphasis on retail do-it-yourself (DIY) and commercial business customers. Lowe's specializes in offering products and services for home improvement, home decor, home maintenance, home repair and remodeling and maintenance of commercial buildings. As of February 2, 2001, Lowe's operated 650 stores in 40 states. So as this company continues to grow bigger and bigger they become a significant threat to HDs market share, positioning and further revenues in the long term. 6.
CURRENT STRATEGIES The most current strategies Home Depot has implemented are: acquisitions of new product lines related to home improvement to broaden their product offerings; the implementation of the new technologies and software to enhance the e-commerce to increase on-line sales; and the opening of new stores nationally and worldwide in order to expand their markets. HD acquired a plumbing product distributor Other Warehouse, plans to acquire Mexico's Total HOME, a four-store chain of home improvements and launched the Lynette Jennings Collection, a proprietary of home do products, that will be introduced to North American stores. To complement the national brand name of the products it offers, the Company has formed strategic alliances with vendor partners to market products under brand names that are only offered through The Home Depot. The Company offers products under more than 30 proprietary and other exclusive brands, including Thomasville kitchen and bathroom cabinets; RIDGID power tools; Behr Premium Plus paint; Mill's Pride cabinets; GE Smart Water water heaters, and Vigor fertilizer. Home Depot has expanded its new online sales program to all costumers living in the US. The Company's Website offers information about projects and its products, calculations to estimate the amount and kinds of materials needed to complete a project and information about Home Depot.
Last year, Home Depot began selling products over the Internet in three markets. The Company offers customers the products available at stores in their local market on its Website, and the products are priced based on the market in which the customer lives. Orders are fulfilled from its stores, and customers can either pick up their purchases or have them delivered. This year HD has begun to offer products that can be shipped by United Parcel Service for sale through the Internet in additional areas of the United States.
Also plans to upload a catalog of approximately 20. 000 products offered in Washington, Oregon, Idaho, Montana and Arizona. Also HD will realign its current merchandising structure to gain merchandising efficiencies with vendors while improving neighborhood product assortment, pricing, and service across all stores. Another current strategy is the new store openings to expand both national and international markets, placing the stores at strategic areas expecting to operate approximately 2300 stores in the Americas by year 2004. HD currently operates in 48 states in USA, as well as in seven Canadian provinces. In 1998 they opened stores in Chile and Puerto Rico, and opened the first Argentinean store in August 2000 (8) 7. MAIN ISSUES Home Depot is the largest do it yourself warehouse in the US today.
It has over 1200 stores throughout the world. Home Depot is well known for its orange logo and catchy phrases about people doing things by themselves pertaining to home improvement. Home Depot is an organization dedicating to serving its customers, its community and helping the environment. The main issues Home Depot faces, as an organization is: Environmental Issues, Expansion, Online, and Competition from other hardware stores. Home Depot has always been critical of the environment and has worked hard in creating programs that will help improve our environment. Home Depot has created many programs to improve its internal and external environment.
Expansion is the most important issue for Home Depot; it has expanded its operation globally now. Home Depot has also recently launched its new website which is very user friendly. Internally Home Depot has always stressed on making a better work environment for its employees. It has many programs for its employees, such as healthcare, retirement plans, and vacation plans.
Those are plans that almost all organizations can provide but Home Depot went beyond these plans for its employees. Some of the plans Home Depot has for its employees are: Employee Safety initiatives in 2000 included increase use in equipment that helps safety measures throughout each of the stores. To promote health Home Depot has a representative from Building a Better Health in every store. Building a better Health, is program that promotes healthy lifestyles through organized wellness activities. Some of the activities of this program is to have the employees walk the around the store, stretch, and perform various light exercises before their shift starts. In 1992 Home Depot and its associates worked with customers to help rebuild South Florida after Hurricane Andrew.
Externally Home Depot has been just as active in its policy. It has always strived to be very environment friendly. Home Depot has donated millions of dollars and help created many programs to help preserve the environment. On of the most recent programs was Policy for the wood it purchases.
This policy certifies the wood that it purchases; this program is responsible forest management. This program has helped to sustain our forest and wood supply. Home Depot has also launched programs to help build houses for the homeless. In 1994 the first Green (environmental) Habitat for Humanity House was built. In 1996 the 100 th Habitat for Humanity house was built in Atlanta. Expansion is a very important issue for Home Depot, it started out with only 1 store in 1978, and has over 1200 stores worldwide today.
Home Depot has always tried to provide the customer with as much variety of products as possible, from finding a small screw to building a whole house, a customer will have ease in their project. Home Depot even offers classes to its customers to show them how to do projects on their own. The main issue for Home Depot is Expansion it has even expanded its operations abroad. It has facilities in Santiago Chile, Argentina, Quebec and Puerto Rico. Not only opening stores in other countries but also expanding to some specialties.
In Home Depot one of its largest sections is the Bedroom, Bath, patio and window sections. To expand on...
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Research essay sample on Company Profile Of The Home Depot
