The Home Depot A Presentation By Hayden Hirsch

The Home Depot A Presentation By: Hayden Hirsch, Kirsten Hookstadt, Jennifer James, Sean Lane & Grace Otoya

Outline of Presentation • • Intro to The Home Depot Retailer Analysis o o Industry Overview Corporate Strategy Retailer Market Strategy o o Image/Positioning Location Strategy & Global Presence Competitor Analysis o o SWOT Lowe’s Financial Analysis Location Analysis o Store Layout & Design Recommendations MKTG 372

Intro to The Home Depot • Retailer of home improvement and construction products and services • Fastest growing retailer in U. S. history • Founded 1978 • Public NYSE: HD • Headquarters in Atlanta, GA • Slogans o “You can do it, we can help” (2003) o “More saving. More doing” (2009) MKTG 372

Retailer Analysis Industry Overview: • • Primary Industry: Other Building Materials Dealers (NAICS: 444190) Within the Industry: o 307 companies o Annual Revenue of 279 Billion Dollars o Estimated 630, 000 employees ● Top 5 Companies in the Industry: ○ The Home Depot, Inc. ○ Lowe’s Companies, Inc. ○ Lowe’s Home Centers Inc ○ Wolseley PLC ○ Epicentr K MKTG 372

Retailer Analysis Corporate Strategy: • • Dynamic corporate level strategy o o Growth, Concentration and Horizontal Strategy Focuses on expanding their products while increasing the range of products and services Company Goals: o To provide the highest level of service, the broadest selection of products and the most competitive prices. o 8 core values: 1. Excellent customer service 2. Take care of our people 3. Give back 4. Do the “right” thing 5. Create shareholder value 6. Respect for all people MKTG 372

Retailer Market Strategy Image/Positioning: • • • Portrayed as a “do it all’ home improvement store Position themselves as: o “The place for home improvement doers who want to get things done” Current image in the industry is being an American retailer of home improvement products and services Largely recognized for their orange color/lettering and they operate out of large warehouse-style buildings The main goal of The Home Depot is to position the store as a well recognized and welcoming place for both men and women looking to improve their home Home Depot’s competitors also aim to position themselves as “do it all” home improvement stores o It is The Home Depot’s large brand recognition and customer loyalty base that has MKTG 372 brought them years of success

Retailer Market Strategy Location Strategy: • • The Home Depot must innovate with different store formant concepts and locations that can yield a high rate of sales per square foot The Home Depot relies on the advice of Map. Info, a long time real estate partner o Their retail consultants provide a site selection strategy for its “mega store” format: large aisles; varied inventory; comprehensive in-store centers (garden and home decorating centers) o “Category killer” in home improvement Global Presence: • • • Largest home improvement retailer in U. S. , Canada, and Mexico The Home Depot has retail locations in Canada (180 stores), Mexico (91 stores), China (7 stores) and in three US territories (Puerto Rico, Guam and US Virgin Islands) A global presence enables the company a broader and varied customer base MKTG 372

SWOT Analysis Strengths: • • Strong brand image Cost advantage (low costs) Innovative products & services • • Environmental factors: interest rate fluctuations Economic factors affecting the retailer Good customer service Opportunities: • • Weaknesses: Global expansion Target a new market segment Threats: • • • New competitors Substitute products developed Customer preferences change MKTG 372

Competitor Analysis Direct: Lowe’s • • Size (Employee Number): 161, 000 Location: 1, 750 locations in 4 different countries Sales: $46, 927, 000 Store design: Two prototype stores that are designed for larger metropolitan markets and for small to midsize markets Target market: Homeowners Pricing: “Everyday low prices, guaranteed. ” Advertising/Promo: Do-it-yourself & do-it-for-me, TV commercials targeting the women market segment Customer service: Dedication to exceptional customer service MKTG 372

Financial Analysis Performance Gross Profit Margin Percentage 2012 2013 34. 47% 34. 57% Net Profit Margin Percentage 5. 52% 6. 07% Overhead Expenses 17. 7% 18. 17% General & Administrative Expenses 4. 39% 4. 53% Asset Turnover 1. 74 1. 82 Inventory Turnover 6. 40 6. 50 Sales per Square Foot $318. 63 $383. 00 Sales per Employee $219, 864. 71 $222, 500 MKTG 372

Location Analysis Store Layout & Design: • • Large warehouse-like buildings Approx. 105, 000 square feet enclosed space Approx. 23, 000 square feet garden area Merchandise divided into 3 major product groups: o building materials o lumber and millwork o plumbing Uses a grid store layout Flexible layout, design, and merchandise techniques Vertical Merchandise Organization MKTG 372

Recommendations MKTG 372