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Str 1. Stronggest balance sheets 2. U.

S major home appliances-2000 store-345,000 associates-A lot of company acquisition-High entry barriers for competitors-Innovation centre-Economic recession proof 3. 10% U.S market share-Major sponsorship in marketing-Good merchandising strategy 4. Automated operation-High level customer service-Online store 5. Strong corporate culture (orange blood) & Good recruitment method (test and automate)-High qualified, helpfull employees-Great training environment-No labour union-Good coorporate citizen-Quick response (katrina storm) 6. Independent from sigle suplier-Direct working with supliers Weak 1. Dropping common stock 2. Strict leadership 3. Shareholder problem 4. Relied heavily in print media 5. High employee turnover 6. Store cannibalization Opp 1. Near-record level of U.S homeownerships 2. The millenial generation 3. Internet usage increasing 4. Some small home improvement competitor gone out of business or sold out. Threat 1. Market saturation 2. Lowe, menards, 84lumber expansion 3. Category niece competitors 4. Building supply competitors

1. A. B. C.

COMPANY PROFILE History Vision and Mission Dll

2. ASSESSMENT A. Internal Assessment a. Culture b. Structure c. Resources d. VRIO e. Value Chain f. Financial B. External Assessment a. PESTEL Analysis b. Porter 6 Forces C. IFAS & EFAS a. Internal Factor Analysis
Internal Factors Strength Strong balance sheets U.S major home appliances Market share Automated operation Corporate culture & employee Independent from sigle suplier Total Scores Weakness Dropping common stock Strict leadership Shareholder problem Relied heavily in print media High employee turnover Store cannibalization Total Scores Strength-Weakness Weight 0.04 0.13 0.10 0.08 0.11 0.04 0.05 0.10 0.10 0.07 0.03 0.10 0.10 0.05 Score 3 5 4 4 5 3 Volume 0.12 0.65 0.40 0.32 0.55 0.12 2.16 0.30 0.40 0.21 0.06 0.40 0.40 1.77 0.39 Comments Growing rapidly Expansion and acquisitions Have the highest share Quick in service Qualified & orange blooded No demanding suplier

3 4 3 2 4 4

Decreasing through years Military method Dislike of current CEO Advertising campaign 60-70% in first year A lot of store in 1 region

b. External Factor Analysis


External Factors Opportunity U.S homeownerships The millenial generation Internet usage increasing Small competitor gone out of Weight 0.17 0.18 0.08 0.07 Score 3 5 4 4 Volume 0.51 0.90 0.32 0.28 Comments Ownership of home WW market increase Online shopping Can not compete

business or sold out Total Scores Threat Market saturation Big competitor expansion Building supply competitors Category niece competitors Total Scores Opportunity-Threat

0.05 0.08 0.20 0.11 0.11 0.05 1 4 2 2

2.10 0.08 0.80 0.22 0.22 1.32 0.69 Market wont goes up Lowe, Menards, & 84lumber Material suplier Specific household suplier

3. STRATEGIES A. CORPORATE STRATEGY a. Directional Strategy SWOT Analysis In determining what the directional corporate strategy for Home Depot, IFAS and EFAS points are extracted into SWOT analysis graphic. From that graphic, later will be found in what quadrant the Home Depot is and the strategy could be identified afterwards.

SWOT ANAYSIS
0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 0.1 0.2 0.3 0.4 0.39, 0.69

EFAS

IFAS, EFAS

0.5

IFAS

From the SWOT analysis, could be determined that Home Depot is in the strong and opportunitied quadrant. Based on that found, Home Depot company strategy should take a growth strategy. b. Parenting Strategy

Corporate Strategy Parenting Strategic Planning High

Attention to Planning

Operational Holding

Low

Financial Holding

High Attention to Financial

Low

c. Portfolio Strategy BCG Matrix GE Matrix


Overall market size Annual market growth rate Historical profit margin Competitive intensity Technological requirements Inflationary vulnerability Energy requirements Environmental impact Social/political/legal Total Weight 0.20 0.20 0.15 0.15 0.15 0.05 0.05 0.05 1.00 Weight 0.10 0.15 0.10 0.10 0.05 0.05 0.05 0.05 Rating (1-5) 5.00 3.00 5.00 5.00 3.00 3.00 3.00 4.00 Rating (1-5) 5.00 4.00 4.00 3.00 4.00 3.00 4.00 4.00 Accepted Value 1.00 0.80 0.60 0.45 0.60 0.15 0.20 0.20 4.00 Value 0.50 0.45 0.50 0.50 0.15 0.15 0.15 0.20

Market Attractiveness

Competitive Position

Market share Share growth Product quality Brand reputation Distribution network Promotional effectiveness Productive capacity Productive efficiency

Unit costs Material supplies R&D performance Managerial personnel Total

0.15 0.05 0.10 0.05 1.00 COMPETITIVE POSITION AVERAGE INVEST TO BUILD Challenge for leadership Build selectively on strengths Reinforce vulnerable areas

4.00 3.00 3.00 4.00

0.60 0.15 0.30 0.20 3.85

HIGH

STRONG PROTECT POSITION Invest to grow at maximum digestible rate Concentrate effort on maintaining strength

MARKET ATTRACTIVENESS

MEDIUM

BUILD SELECTIVELY Invest heavily in most attractive segments Build up ability to counter competition Emphasize profitability by raising productivity PROTECT AND REFOCUS Manage for current earnings Concentrate on attractive segments Defend strengths

LOW

SELECTIVELY/MANAGE FOR EARNINGS Protect existing program Concentrate investments in segments where profitability is good and risk is relatively low MANAGE FOR EARNINGS Protect position in most profitable segments Upgrade product line Minimize investment

WEAK BUILD SELECTIVELY Specialize around limited strengths Seeks ways to overcome weaknesses Withdraw if indications of sustainable growth are lacking LIMITED EXPANSION OR HARVEST Look for ways to expand without high risk; otherwise, minimize investment and rationalize operations

DIVEST Sell at time that will maximize cash value Cut fixed costs and avoid investment meanwhile

B. BUSINESS STRATEGY QSPM Analysis From the SWOT analysis it is determined that Home Depot should take growth strategy. The business strategy in these growth condition should take wether to take the market opportunities, fight the current competitors, and expand internally. To see which business strategy is the best, QSPM analysis is conducted.
Key Factors Take Market Opportunities W S V Fight the Current Competitors W S V Expand Internally W S V

Strength Strong balance sheets U.S major home appliances Market share Automated operation Corporate culture & employee Independent from sigle suplier Weakness Dropping common stock Strict leadership Shareholder problem Relied heavily in print media High employee turnover Store cannibalization Total Scores Opportunity U.S homeownerships The millenial generation Internet usage increasing Small competitor gone out of business or sold out Threat Market saturation Big competitor expansion Building supply competitors Category niece competitors Total Scores Attractiveness Score

0.03 0.14 0.14 0.13 0.10 0.03 0.06 0.07 0.05 0.07 0.09 0.09 1.00 0.17 0.17 0.15 0.15 0.06 0.10 0.10 0.10 1.00

3 5 5 5 4 3 3 2 2 4 3 4

0.09 0.70 0.70 0.65 0.40 0.09 0.18 0.14 0.10 0.28 0.27 0.36

0.02 0.10 0.13 0.14 0.14 0.09 0.07 0.08 0.03 0.03 0.10 0.07 1.00 0.10 0.10 0.10 0.12 0.08 0.20 0.15 0.15 1.00 >

3 4 4 4 4 4 3 3 3 2 4 4

0.06 0.40 0.52 0.56 0.56 0.36 0.21 0.24 0.09 0.06 0.40 0.28

0.15 0.06 0.06 0.09 0.09 0.05 0.13 0.13 0.09 0.03 0.07 0.05 1.00 0.08 0.09 0.11 0.10 0.08 0.20 0.17 0.17 1.00 >

5 3 3 4 4 3 4 4 4 2 4 4

0.75 0.18 0.18 0.36 0.36 0.15 0.52 0.52 0.36 0.06 0.28 0.20

5 5 4 4 2 4 3 3

0.85 0.85 0.60 0.60 0.12 0.40 0.30 0.30 7.98

3 3 4 4 2 5 4 4

0.30 0.30 0.40 0.48 0.16 1.00 0.60 0.60 7.58

2 2 4 4 2 4 3 3

0.16 0.18 0.44 0.40 0.16 0.80 0.51 0.51 7.08

C. FUNCTIONAL STRATEGY TOWS Matrix


Strengths 1. Strong balance sheets 2. U.S major home appliances 3. Market share 4. Automated operation 5. Corporate culture & employee 6. Independent from sigle suplier Opportunities SO Strategies Weaknesses 1. Dropping common stock 2. Strict leadership 3. Shareholder problem 4. Relied heavily in print media 5. High employee turnover 6. Store cannibalization WO Strategies

1. 2. 3. 4.

1. Acquisition of small potential company (S1,S2,04) 2. Increase current market share through increasing young population (S3,O1,O2) 3. Use current advance technology and service to catch potential new market (S4,O3,O2) 4. Use advancement in suplier to create more custom product to catch new market (S6,O1,O2) ST Strategies 1. Acquisition of small potential Threats company (S2,T3,T4) 1. Market saturation 2. Strengthen corporate culture 2. Big competitor expansion and employee to add more 3. Building supply competitors competitive advantage (S5,T2) 4. Category niece competitors 3. Expand through new region to gain more market share (S2,T1)

U.S homeownerships The millenial generation Internet usage increasing Small competitor gone out of business or sold out

1. Use potential new market to increase stock price (W1,W3,O2) 2. Use advertising campaign through internet (W4,O3)

WT Strategies 1. Sell weak and canibalized store (W6,T2) 2. Soften leadership and retain employee to compete with the competitor (W2,W5,T2)

Functional Strategy Marketing: 1. Increase current market share through increasing young population (SO2) 2. Use current advance technology and service to catch potential new market (SO3) 3. Use advertising campaign through internet (WO2) 4. Use potential new market to increase stock price (WO1) 5. Expand through new region to gain more market share (ST3) Human Resources: 1. Soften leadership and retain employee to compete with the competitor (WT2) 2. Strengthen corporate culture and employee to add more competitive advantage (ST2) Production: 1. Use advancement in suplier to create more custom product to catch new market (SO4) Financial: 2. Acquisition of small potential company (SO1,ST1) 3. Sell weak and canibalized store (WT1)