Home Depot's Cultural Evolution - A comparison of the Company's Culture Under ITS Founders and BOB Nardelli

            
 
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Case Details:

Case Code : HROB063
Case Length : 11 Pages
Period : 1978-2004
Pub Date : 2004
Teaching Note : Available
Organization : Home Depot
Industry : Retail
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Background Note

Home Depot was conceptualized in 1978, by Bernie Marcus (Marcus) and Arthur Blank (Blank), as a large warehouse-like store that would provide a complete range of household products at discount prices. The store would target 'do-it-yourselfers',4 and would have a no-frills approach to selling merchandize. On June 22, 1979, the first three Home Depot stores were opened in Atlanta, and by the end of 1979, Home Depot had 200 'associates'5 and had crossed $7 million dollars in sales.

In 1981, the Home Depot issued shares to the public, through which it raised over $4 million. Most of the money was ploughed into opening new stores - the company's favored route for expansion.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

In 1984, Home Depot was listed on the New York Stock Exchange. In the early 1980s, Home Depot grew very rapidly and by 1985, the company had 50 stores and $700 million in revenues. In 1986, the stores' sales touched the $1 billion mark.

In 1991, the company opened its first Expo Design Center in San Diego. Expo Design Centers carried higher-end products compared to Home Depot and sold complete solutions to household needs, such as modular kitchens, assembled bathrooms, etc.

In the same year, the company's sales crossed five billion dollars. In the mid-1990s, Home Depot collaborated with Discovery Channel and Lynette Jennings (a popular television personality and authority on home decorating and design in the US) to bring out a daily home improvement program, called HouseSmart. By 1996, the number of Home Depots had crossed the 500 mark and most of the new stores were opened in suburban areas and near small towns. In the 1990s, the company grew at an average annual rate of 35 percent.

In 1997, Marcus stepped down and Blank became the CEO of Home Depot.

In the same year, the company entered into a joint agreement with S.A.C.I. Falabella, the top departmental store in Chile and Peru, to open home improvement stores in Chile.

By 1998, the company had entered South America, opening stores first in Chile, and later in Puerto Rico. In 1998, Home Depot initiated its Tool Rental program, which allowed customers to rent tools for their home improvement projects.

Another important event of the year was the introduction of the computerized job application process, which made the recruitment process simpler and more efficient. In 1999, the company announced its environmental wood policy through which it undertook to stop selling goods that were made from wood cut in ancient and ecologically important forests.

In his announcement of the policy, Blank affirmed that Home Depot would eliminate wood products from endangered sources like the rain forests, and some types of wood like cedar, redwood and lauan, giving preference instead to certified wood...

 Excerpts >>


4] Customers who preferred to purchase products and do their home improvements themselves instead of contracting them out.

5] Home Depot called its employees 'associates'.

 

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