Swot of Home Depot

Introduction

Home Depot is a nationally and somewhat internationally recognized company. They not only have stores throughout the US but they have broken into Canada, District of Columbia, Puerto Rico and Mexico. They are the United States’ largest retailer behind Wal-Mart. Home Depot is known for its bright orange logo and its multiple departments available to individuals and businesses. They have primary operations in the home center and hardware store industry. Their strongest competition in that industry comes from Lowe’s, True Value Hardware, and Ace Hardware. Some other industry’s in which you can find Home Depot competing include building materials retail and distribution, consumer electronics and appliances retail, convenience stores and truck stops, and gasoline retailers.

Areas that drive demand for Home Depot’s primary industry are home remodeling and new homebuilding. Products included in this industry include lumber and building supplies (50%), hardware, tools, and plumbing and electrical supplies (25%), and paint and lawn and garden products (5%), (Hoovers, 2008). The home center and hardware store industry is made up of national and regional chains and independent retailers.

Strengths

• Brand Recognition

• Training Employees in Safety

• Corporate/Social Responsibility

Home Depot, as an established corporation, has much strength behind its name. One of the largest strengths would be that of its brand recognition. Home Depot is known by all across the United States as a home improvement/supply store. Smaller up and coming businesses would find difficulty in entering such a market with competing against stores such as Home Depot or Lowe’s. Brand recognition is of strong significance to the consumer. It provides a sense of trust to the buyer. Their well recognized logo which gains attention from its bright orange color and warehouse-like stores help consumers with their brand recognition.

Home Depot provides a strong focus during the training of their employees on safety. New hires complete a training curriculum that is designed for their specific job type. They also provide “refresher” opportunities for employees on safety in the job place. Home Depot encourages open discussion of potential hazards in the workplace so they can be rectified in a timely fashion. If the employees are educated in safety within their workplace environment then their consumers are safe as well within the workplace area.

Home Depot takes great pride in being a corporate and social responsible corporation. According to Home Depot’s main website, they are built on the principle of creating value for their stockholders while at the same time not forgetting their own values. Their employee’s spend their own personal time volunteering in the communities that Home Depot serves and they offer a wide range of educational classes in stores that are geared not only to adults but also to children. They also participate in being an “environmentally friendly” corporation. They have shown this through a variety of ways such as carrying a broader scope of energy efficient products, environmentally friendly products and their recycling practices. In 2007, Home Depot launched a new line of “environmentally friendly” products. They named this line of products “Eco Options” and it supplied Home Depot with $3 billion in sales in its first year. This amount only accounted for a little less than 4% of their sales in 2007 (Tobin-Ramos, 2008). Just recently, Home Depot opened recycling hotspots for old, burned out light bulbs at some of its store locations.

Another environmentally aware act Home Depot enlists in is the purchasing of lumber. Home Depot will only purchase lumber from companies who do not obtain it from endangered forest areas. The company also heads community improvements acts such as playground rebuilding and helping with preparing communities for natural disasters.

Weaknesses

• Decline in Customer Loyalty