Home Depot and Management Tool Term Paper

Pages: 10 (2659 words)  ·  Bibliography Sources: 5  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

SAMPLE EXCERPT:

[. . .] It gave the company an extra 15 hours per week which helped them schedule creation.

2. It improved the quality of schedules in the company in that store managers more effectively used the skills of their colleagues and employees across diverse departments

3. Employees could now see their jobs by logging into their system form home. This enabled them to do their work faster and better without wasting time. It, consequently, also saved the company money and gave customers less irritation.

Home Depot's new strategy proved successful economically too. At the end of 2011, Home Depot had earned $70.4 billion in revenue, up 3.5% from 2010. As of October 2012, a share of Home Depot costs more than $60, an increase of nearly 70% from the same time last year.

Blake had replaced Robert Nardelli in 2007. Nardelli had focused on expansion and slashing employee benefits. Blake, on the other hand, cut costs without destroying morale and set up improving customer service and reversing expansion in order to focus on key business.

"Frank looked at the world and said, 'We're fully stored, why we don't focus on improving the existing stores that we have rather than growing for growth's sake?'" says Gary Balter, an analyst who covers Home Depot for Credit Suisse. Blake saw, he says, that growing to placate Wall Street didn't make good business sense. (Dubois, S. (2012))

In 2012, predictions were looking up for the company and their profits were on an upward slope as the following graph shows:

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In fact, at the end of 2012, Forbes -- one site that reposted this graph, noted that "Home Depot trades well above its 100 and 200-day moving average, a bullish technical indicator." (Forbes.com (2012))

Home Depot had come a long way since 2008, and Forbes considered the company to be a safe investment.

The company's growth can be seen in the various accolades that it won since 2008 (Forbes.com)

Term Paper on Home Depot and Management Tool Assignment

It was #35 in FORTUNE 500 (May 2012); #78 in FT Global 500 (July 2012); and #35 in FORTUNE 1000 (May 2012). Forbes (2013) listed it as the 48th most powerful brand in the world (Forbes.com, 2013)

At the end of 2012, Home Depot too had profited from Hurricane Irene which together with its management system allowed it to repurchase back $700 million a total of $4 billion by the end of that year.

Moreover, the U.S. housing market, an impediment to the company at one point, was now an encouragement towards growth since rising sales pushed down the stock of unsold properties on the market, lifting prices and giving builders more confidence to take on new projects. This was the news in 2012, and the trend in 2013 seems to be reiterated growth in the same direction.

Home Depot's earnings by the end of 2012 had BEEN 74 cents per share. Sales rose nearly 5% to $18.13 billion, topping analysts' estimates of $17.93 billion whilst sales globally increased 4.2% including a 4.3% rise in the United States.

Appraisal was optimistic.

Edward Jones analyst Robin Diedrich, for instance, concluded that: "Things are going pretty well for them; with sales remaining strong & #8230; The stock has done extremely well and trades at quite a premium to the rest of retail." (Reuters.com (Tue Nov 13, 2012))

Much of this was the result of their improved customer service and management tool. Home Depot's better pricing and enhanced customer service boosted them above Lowe's. This was the first time in more than 13 quarters where Lowe and HD had run neck-to neck together (ibid.)

• Future of the company -- What has the successful implementation allowed the company to do?

At the start of 2013, the company employed 189,390 employees. Its latest news has been that due to its booming business, it plans to employ 80,000 more associates for its predicted busy Spring season (Home Depot (2013) News Releases.). HD apparently has its system back on track and has managed to not only tidy their concerns but to also improve them and win over customers by so doing. Their ERP system has been boosting to their business.

In 2012, Home Depot executive management told Reuters that "We believe we're on a path to recovery. We're not there, but we're on a path," The path seems to be wending ever clearer in the future.

Although HD may be increasing its workforce, it seemingly has learnt its lesson of the past and is not planning to reopen more stores or to expand at least not in the near future. It did not, as it reported, plan to expand in Europe (even though Alpha reports that "Home Depot could easily double its revenue and market capitalization by expanding into Europe") and as to whether or not it would open more stores in the U.S., it saw only negative repercussion from that resulting in cannibalization of existent stores. The U.S., its representatives said, were already glutted with HD outlets.

Instead, HD plans on keeping its focus on customer service and an improved efficacious IT system. Similarly, in 2012, a company representative noted that HD was not planning on major remodeling of stores or of introducing new store formats, but planned to maintain the status quo.

Results of its management system showed success wherever it had been introduced. Home Depot in Mexico, for instance, reported 34 consecutive quarters of positive comparable whilst the Canadian HD reported its first positive comparable since 2004 (Alpha.com). HD even managed to expand in Canada during the last year.

Meanwhile, Home Depot's online business, too, is doing well and outperforming the rest of the company and this trend is expected to continue. In line with its emphasis on customer service, HD recently upgraded its dot-com platform in order to improve the aesthetics and responsiveness of the site.

Home Depot too has been seeing an increase in its larger pro-customers far more than in its smaller pro-customers due largely to its generous credit available to these customers. This trend may or may not continue depending on HDs policies. In the meantime, it is cautiously optimistic in regards to its pro-business segment (Seeking Alpha. Com (2012))

2012 was a year where Home Depot's stock prices went ballistic largely due to tis leaving China and focusing on its core business by revamping its management practices. Whether this will continue is still to be seen, but the future promises to be optimistic since HD plans on continuing this same route. Their ERP system has proved helpful; their rating has soared. The future seems promising.

Sources

Builder, (June 10, 2009) Home Depot Tries to Reassert Its 'Power'. http://www.builderonline.com/economic-conditions/home-depot-tries-to-reassert-its-power.aspx

Hoover.com The_Home_Depot_Inc.

http://www.hoovers.com/company-information/cs/company-profile.The_Home_Depot_Inc.fbb298e093e95785.html

Forbes.com Home-depot http://www.forbes.com/companies/home-depot/

Lariviere, J (2010) The Operations Room, http://operationsroom.wordpress.com/2010/02/25/rebuilding-home-depot/

Integrated solutions for retailers (2012) The HJDs scheduling improvement www.tesseract.com/uploaded/files/HomeDepotPrint.pdf

Dubois, S. (2012) Home Depot knows when to call it quits http://management.fortune.cnn.com/2012/10/26/home-depot-knows-when-to-call-it-quits/

Forbes (2012) what to Do with Home Depot's Stock http://www.forbes.com/sites/panosmourdoukoutas/2012/11/12/what-to-do-with-home-depots-stock/

Reuters.com (Tue Nov 13, 2012) Home Depot view up as housing heals;… [END OF PREVIEW] . . . READ MORE

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