2. That isn’t to dismiss the gains that both retailers have seen. Thus, this SWOT analysis shows that Home Depot’s strengths supports competitive advantage. Let's conquer your financial goals together...faster. Strategic Management: Integration, merger vs acquisition, Analysis of financial statements: Lowes vs Home Depot, Information Systems for Decision-Making Postures. © BrainMass Inc. brainmass.com October 2, 2020, 2:19 am ad1c9bdddf, Impact of cultural change; effect on competitive advantage. For most of its history, Home Depot has had the reputation of lagging behind its main rival in terms of supply-chain efficiency, relying primarily on a decentralized supply chain in which suppliers shipped products directly to Home Depot stores. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. See our Privacy Policy page to find out more about cookies or to switch them off. Lowe's. Despite the onslaught of the novel coronavirus that began in March, the largest home improvement retailer in the United States still managed to have a solid quarter ending May 3, 2020. That's why Home Depot says its digital strategy is critical to its survival and helps separate it from the competition. In this regard, this SWOT analysis shows that Home Depot’s weaknesses are linked to its supply chain, business development, and market strategies. San Francisco: Jossey-Bass. Also, the firm’s market leadership and strong brand image are strengths because they help attract the biggest market share. 3. This industrial aesthetic gives the impression that the store is geared toward home improvement professionals. Image source: Home Depot investor presentation. A look at Talent In addition, any slowdown of the U.S. economy is a major threat because the vast majority of Home Depot’s revenues are generated in the American market. Online-to-offline (O2O) commerce is a business strategy that draws potential customers from online channels to make purchases in physical stores. But Home Depot is more concerned with what it calls "product authority," or sourcing the best mix of exclusive brands and innovative products for its customers. Discuss the critical programs used by Home Depot to keep talent in their pipeline. Accessed March 21, 2020. His investing philosophy is simple: find high-quality companies, don't overpay, and do nothing. Both results were above analyst expectations. Accessed March 22, 2020. Lowe's. More recently, this strategy includes an animated display kit that projects images on screens and windows, just in time for Halloween. Home Depot. Based on this SWOT analysis, Home Depot also needs to diversify its business to minimize risk exposure in the home improvement retail market. Valentin, E. K. (2001). Accessed March 22, 2020. Business Insider. There are 3 Home Depot Stores in a 20 minute radius of my town, and no other large box store competitors within 45 minutes. Home Depot’s weaknesses are linked to its business nature, focus, and supply chain. For customers who are also trade professionals, they're seeing expanded next-day delivery, even of bulk items like concrete. Goldsmith, M., & Carter L. (2010). Home Depot recognizes the importance of human capital in corporate success thus ensuring that its human resource is effective in promoting organizational success. CEO Craig Menear highlighted the success of investments made over the years that have enhanced the company's ability "to quickly adapt to shifts in customer needs, preferences, and behaviors." Home Depot’s revenue rose 23% from a year earlier in its third quarter, basically the same growth it enjoyed the prior quarter. Best practices in talent management: How the worldâ? Accessed March 21, 2020. You can help! "2007 Annual Report," Page 4. It is currently rolling out a national option for shoppers to order online and take delivery from their local store. Discuss three lessons learned by Home Depot related to talent management. Although earnings fell 10.7% compared to the first quarter of 2019, this was due to $850 million spent on actions taken to support employees. Accessed March 21, 2020. Pickton, D. W., & Wright, S. (1998). Home Depot’s stores feature an orange and black color scheme with tall shelves, the highest only accessible by forklifts. + free trial month | Hulu promo codes, Joe Biden Had Big Ambitions for Taxes; Now Reality Sets In, Ventilation Is Key to Battling Covid. A rising home improvement market has made winners out of both Home Depot (NYSE:HD) and its smaller rival Lowe's (NYSE:LOW). Distributed Applications (DApps) are software applications that are stored mostly on cloud computing platforms and that run on multiple systems simultaneously. "2018 Annual Report," Page 1. It’s not possible in-person, 24/7, but you can always be there virtually for your customers. "2018 Annual Report," Page 2 of PDF file. Lowe’s also has less exposure to urban markets, where people were initially more skittish about stepping foot inside stores due to the coronavirus pandemic. This diversification may come in the form of new businesses, subsidiaries or acquisitions to establish Home Depot’s presence in new industries or markets. In the case of Home Depot, the following are the main weaknesses: Home Depot and competitors like Lowe’s have close relationships with suppliers. Returns as of 11/25/2020. Recent research on team and organizational diversity: SWOT analysis and implications. The company has undertaken several strides, including the acquisition of Compact Power Equipment… Accessed March 21, 2020. See you at the top! Home Depot’s Organizational Culture: An Analysis, Home Depot’s Stakeholders: A CSR Analysis, Home Depot’s Vision Statement & Mission Statement, Home Depot’s Generic Strategy, Intensive Growth Strategies, Home Depot Five Forces Analysis (Porter’s Model), Home Depot’s Marketing Mix (4Ps) Analysis, Home Depot’s Organizational Structure Analysis, Home Depot’s Operations Management, 10 Decisions, Productivity, Home Depot PESTEL/PESTLE Analysis & Recommendations, Amazon.com Inc. SWOT Analysis & Recommendations, Sony Corporation’s SWOT Analysis & Recommendations, Walmart Inc. Five Forces Analysis (Porter’s Model), Recommendations, Amazon.com Inc. Five Forces Analysis & Recommendations (Porter’s Model), Burger King SWOT Analysis & Recommendations, Nike Inc. SWOT Analysis & Recommendations, Whole Foods Market SWOT Analysis & Recommendations, McDonald’s SWOT Analysis & Recommendations, Walmart’s Generic Competitive Strategy and Intensive Growth Strategies, Home Depot’s cost minimization efforts based on its generic strategy, Message from Supplier Diversity Leadership. A comprehensive approach to retailing and strong execution around portfolio offerings aren't Home Depot's only two competitive advantages. U.S. Securities and Exchange Commission. "2018 Annual Report," Pages 16-17. For example, Home Depot suppliers avoid doing business with Lowe’s because of fear of losing business with Home Depot. Strategy-driven talent management: A leadership imperative. This condition discourages suppliers from doing business with competing firms. Home Depot anticipates they'll be able to reach 90% of U.S. customers with same-day and next-day delivery. Finance. 1. By having an effective human capital Home Depot gains competitive advantage since skilled and effective employees lead to improved customer satisfaction which in turn leads to building customer loyalty and this translates to continued organization growth and success. That all adds up to evidence of a significant competitive advantage for the leading retailer in the home improvement industry. Accessed March 21, 2020. Ninety percent of store leadership started their careers as hourly associates, validating a business model that empowers employees and provides ample opportunities for career growth. Sales were up 7.1% from the prior-year period, and comparable sales in the U.S. were up 7.5%. Another weakness of Home Depot is the relative ease of imitating its business. Click and mortar is a type of business model that has both online and offline operations, which typically include a website and a physical store.