From a personal perspective, Home Depot is a company that epitomizes almost all elements of learning and value creation to the high extent. In particular, it has the highest level of motivating and inspiring people, developing leaders, and empowering employees at all levels. First of all, Home Depot defines the retention of talented and qualified employees as one of its top priorities (Hess, 2020). It aims to create the most comfortable working conditions, including bonuses, incentives, and insurance, to attract workers. At the same time, the company continuously organizes various training programs for employees’ personal and professional growth. Finally, Home Depot launches the Adobe Creative Jam in its Store Support Center that presupposes workshops, free-thinking team battles, and the performance of speakers to enhance people’s creativity and job commitment (Home Depot, 2018). In general, Home Depot applies various strategies to attract customers and provide opportunities for its workers to grow professionally and contribute to the company’s growth by skills, knowledge, and experience at the same time.
At the same time, in relation to accumulating and sharing internal knowledge and gathering and integrating external information, the performance of Home Depot may be regarded as medium. Regardless of multiple training, knowledge sharing remains insufficient as these learning programs do not cover the encouragement of knowledge flow (Carson, 2017). In addition, the company’s HR does not use all opportunities for more technology-determined recruitment. In this case, it is recommended to develop more efficient algorithms for the analysis of various aspects of organizational culture and relationships between employees to enhance internal data collection. In addition, HR should use modern digital advancement to make recruitment more efficient. These techniques will allow the company to improve the quality of its workforce, develop new training related to employees’ knowledge sharing, and increase general productivity.
Memorandum
TO:_______________________________
FROM:_____________________________
DATE:_____________________________
SUBJECT:____________________________
Home Depot may be regarded as an international retail corporation that successfully operates in the sphere of home improvement. At the same time, for continuous growth and development, the continuous monitoring of any company’s internal and external environment is required. Thus, this memo will present the general analysis of Home Depot’s strengths and weaknesses, five forces of competition, the model of national advantages, learning opportunities, and recommendation for further activities.
Strengths and Weaknesses
In the present day, Home Depot is a multinational company which strengths are undeniable. It is one of the largest home improvement corporations not only in the United States but all over the world as well (“Lowe’s vs Home Depot: Home improvement or stock improvement?,” 2019). In addition, it has its own history, strong brand image, and brand awareness that allow to accumulate resources and take advantages from the economy of scale protecting its market share more efficiently. As a result, Home Depot is characterized by substantial profitability and its net income margin increases every year (“Here’s how Home Depot stock climbed 60% in 3 years,” 2019). Excellent customer service and affordability may be regarded as the company’s other major strengths. In particular, Home Depot offers experts’ advice to its customers, enhances buyers’ experience through the best prices in comparison with rivals, focuses on eco-friendliness, develops e-commerce, and introduces various options for purchasing, including BOPIS (buy-online-pickup-in-store) (Ferguson, 2017). Finally, Home Depot Takes a crucial advantage from its variety of products attracting customers who receive an opportunity to find all materials for construction, furnishing, and decoration under one roof.
At the same time, similar to any other company, Home Depot has weaknesses as well. First of all, although the company currently pays particular attention to the development of its online store, it started to implement this technology later in comparison with its rivals losing this competitive advantage (Kumar, 2019). In addition, spending more than $10 billion for e-commerce, Home Depot failed due to aging infrastructure (Giles, 2019). Finally, regardless of its availability in the United States, Home Depot’s is not adequately presented in the global market operating only in North America. In order to convert its weaknesses into strengths, the company may diversify its geographical presence by entering other country’s markets through partnership and enlarge its market share through acquisition. In addition, the company may diversify its products as well by offering other categories of goods such as apparel or food. Finally, Home Depot should continue the development of its online stores.
Porter’s Five Forces
On the basis of Porter’s Five Forces analysis, it is possible to state that the competitive rivalry in relation to Home Depot may be regarded as high. The company has multiple competitors, including Sears, Ace Hardware, and Lowe’s, who offer similar products, costs, and services for customers to attract them (Adamkasi, 2019). At the same time, the threat of new entrants is moderate to low – due to the company’s size and market share, it operates at the level of multinational corporations that limit the entrance of new players by the requirement of substantial investments. Suppliers’ bargaining power is low as well as Home Depot’s suppliers cannot influence the company’s decisions as it may change them easily. At the same time, buyers’ bargaining power and the threat of substitutes for Home Depot are high as consumers choose from similar products and pay attention to competitors’ other benefits.
Diamond Model of National Advantage
the Diamond Model of National Advantage presuppose factor conditions, firm strategy, rivalry, and structure, demand conditions, and supporting or related industries, for Home Depot, its factor conditions imply the following:
- Capital resources (debt-based and equity-based capital);
- Natural resources (North American water channels, renewable energy);
- Human resources (employees’ skills, recruitment and management strategies for professional growth);
- Infrastructure (cities’ infrastructure for the availability of the company’s locations);
- Scientific knowledge (competitive advantage acquired through country-wide and industry-wide sources);
- Technological innovations (country-wide development of technologies that may be used by the company).
In general, the United States as Home Depot’s local market provide substantial resources for the company. Its economy and political structure allows the company to generate capital using employees’ skills, knowledge, and experience acquired due to opportunities for knowledge acquisition. At the same time, cities’ infrastructure is advanced enough to ensure customers’ access to the company’s stores. Finally, Home Depot may apply existing technologies available due to the level of the country’s technological development to create competitive advantages.
In relation to industries, Home Depot has a network of related and supporting industries, such as packaging, raw materials, and industries that uses the products of the company, that ensure its stable growth and development by supplying and purchasing manufactured goods. In addition, Home Depot has multiple reliable international suppliers that ensure the quality of the company’s products and services. At the same time, the presence of rival industries is weak as the improvement of homes in the United States traditionally occur through the purchasing of materials for construction and decoration.
In turn, Home Depot’s demand conditions are determined by the size of the market and consumers’ demands. Although the local market is large and people continuously needs materials for home improvement, a highly competitive environment forces the company to search and apply competitive advantages for growth and development. In addition, the country’s traditional business strategies determine the company’s activities, tactics, approaches, and structures. In particular, Home Depot applies customer-oriented approach, the organizational structure on the basis of free communication, creativity of employees, and their professional growth, and continuous monitoring of opportunities for competition.
Learning Organization
In general, Home Depot may be regarded as a learning organization. First of all, it realizes he irrelevance of traditional training that focused on customer-oriented approach. In turn, Home Depot focus on its employees’ professional and personal development that will allow them to improve productivity, build solid relationships with colleagues on the basis of collaboration and communication, and make competent decisions related to their work responsibilities. In addition, Home Depot’s HR is data and technology driven, and these innovations allow them to recruit the most talented and competent workers.
Strategic Recommendations
As previously mentioned, Home Depot should focus on its digital presence on the global market through the development of its online store and enter the international market expanding its availability in other countries. In particular, it may enter South African market, and its initial steps should presuppose the in-depth analysis of consumers; demographics, cultural peculiarities, purchasing behavior, needs, demands, and expectations. In addition, Home Depot may partner with local companies to facilitate its entrance. At the same time, it should enhance inner knowledge-sharing and external collaboration with partners and other stakeholders on the basis of beneficial information, skills, and experience to become a more learning company and ensure additional competitive advantages.
References
Adamkasi. (2019). Porter’s Five Forces (Porter’s Model) of Home Depot. Porter Analysis. Web.
Carson, B. (2017). Home Depot training strategy: Improving performance in real-time. Rallyware. Web.
Ferguson, E. (2017). Home Depot SWOT analysis & recommendations. Panmore Institute. Web.
Giles, M. (2019). Home Depot’s $11 billion digital rebuild hits a legacy-tech speed bump. Forbes. Web.
Here’s how Home Depot stock climbed 60% in 3 years. (2019). Forbes. Web.
Hess, A. J. (2020). Home Depot’s strategy for hiring 80,000 new workers: Help them with paying for school. CNBC. Web.
Home Depot. (2018). Jamming with Adobe for creative solutions to big problems. Home Depot. Web.
Kumar, U. S. (2019). Home Depot cuts sales goal as online push not delivering as expected. Reuters. Web.
Lowe’s vs Home Depot: Home improvement or stock improvement? (2019). Forbes. Web.