Home Depot Disaster

A detailed Summary of Home Depot Disaster

Home Depot has been a dominator in the retail industry with years averaging annual earnings gains ranging from 30% to 40%, with last years sales totaling $38.4 billion. However, this year the company reported revenues that seem to be in a down-spiraling situation. This month the “orange giant” is being faced with a serious drop in its earnings per share and many analysts are contributing this drop to the possibility that Home Depot may of hit the wall. With analysts banking on a 25% growth rate, Home Depot barely managed to achieve half of that; reporting only 13% in its fiscal third quarter earnings. There are many reasons for this outcome and there are ways that Home Depot plans on overcoming these “threats” that are reducing their earnings.

“Whenever there has been this kind of slowdown, we’ve turned our back to our basic kind of nature, which is to be piranhas. We will be very aggressive in the marketplace to gain as much market share as we can”, says Mr. Arthur M. Blank, co-founder of Home Depot. In making this statement, Mr. Blank was probably referring to their immediate and emerging rival, Lowe. Lowe, the countries No.2

ing not only appliances but also other methods of overcoming this potential rival.

Home Depot has the right idea and my expectations for the company are anything but negative. Although they need to act fast before any permanent damage can be done. A good example of not acting quickly can be expressed by looking at Toys R Us and K-Mart. Both of these superstores are facing the possibility of losing their market share. The amount of market share and consumer loyalty in which they previously had is no longer relevant. This is a reason why the company should base their decisions on consumer preference and not on the basis of their achieved consumer loyalty nor on achieved market share, because as shown with the previous example it is irrelevant. Now they must determine a way in which they can regain market share and they only way to do it now is to win back customer loyalty.

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Home Depot will attempt to wipe out the competition and be the only “one-stop shop” available to the consumer. In addition it will attempt to attract new clientele and continue it reputation of being a good investment.

Recently, Home Depot has opened a location local to my area, Huntington Station, and this opening has raised a few ethical questions that have not been answered by Home Depot. The local town officials are not raising any questions nor are they disputing the opening of their new neighbor, because of the expected tax income to be generated by the Depot. However, the local residents feel differently. Certain residents are concerned with the reputation Home Depot has for traffic, pollution and noise. The deliveries for this new location will need to access the store via entrances that intercept with crossing which are intended for the school children. And certain parts of the store, including the loading docks will be directly located in front of some residential homes. Home Depot has agreed to invest an additional $40,000 towards the landscaping of its newly acquired property, in an effort of alleviating this problem, although they have not yet done so and the premises are !

mplementing a program, which involves an additional 12 to 15 specially trained salespeople. They claim that this will help the lack of information found on the floors and also help their logistics problem. Home Depot always emphasizes the amount of floor space in which their locations consist of, 12-14 people would be, in my opinion, inadequate. Home Depot, as of the moment, in NY has a sufficient amount of locations, so instead of the company looking to invest their capital into developing new locations they should be more focused on maintaining their current locations and possibly give seminars or classes to train all of their employees. These strategies would contribute greatly to their current lack of effectiveness. Home Depot has reig

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Approximate Word count = 1970
Approximate Pages = 8 (250 words per page double spaced)

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