Is Home Depot’s recessionary strategy of eliminating debt and halting growth a wise one? What would you recommend to the CEO?
When Bernie Marcus and Arthur Blank opened the first Home Depot store in Atlanta in 1979, they forever changed the hardware and home-improvement retailing industry. Marcus and Blank envisioned huge warehouse-style stores stocked with an extensive selection of products offered at the lowest prices. Today, do-it-yourselfers and building contractors can browse from among 40,000 different products for the home and yard, from kitchen and bathroom fixtures to carpeting, lumber, paint, tools, and plant and landscaping items. If a product is not provided in one of the stores, Home Depot offers 250,000 products that can be special-ordered. Some Home Depot stores are open twenty-four hours a day, but customers can also order products online and pick them up from Home Depot stores or have them delivered. Additionally, the company offers free home-improvement clinics to teach customers how to tackle everyday projects like tiling a bathroom. For those customers who prefer not to “do it yourself,” most stores offer installation services. Well-trained employees, recognizable by their orange aprons, are always on hand to help customers find just the right item or to demonstrate the proper use of a particular tool.
Currently, Home Depot employs more than 300,000 people and operates approximately 2,238 Home Depot stores, mostly in North America and Mexico. It also operates four wholly owned subsidiaries: Apex Supply Company, Georgia Lighting, Maintenance Warehouse, and National Blinds and Wallpaper. The company is the largest home-improvement retailer in the world (although revenue dropped from $81 billion to $65 billion annually during the 2008–2009 recession). Home Depot continues to do things on a grand scale, including putting its corporate muscle behind a tightly focused social responsibility agenda. Every week, 22 million customers visit Home Depot, which means that conflicts associated with providing services in a retail environment are inevitable.