Home Depot Strategic Audit Report

Home Depot

Subin Vattamakal

Embry-Riddle Aeronautical University-Worldwide

Strategic Management

MGMT 436

Dr. Robert Murray

September 25, 2014

Home Depot

Executive Summary

* The Home Depot has been number one in the home improvement industry for many years.

* The current business model still applies and is directed at DIY, DIFM, and Professional customers such as contractors.

* The Home Depot has a diverse supplier base.

* Revenues from 2011 to 2014 have increased by $8,417,000.

* Net income has increased by $1,502,000.

* Cost of goods sold have increased by $5,289,000.

* Common-size statements and financial ratios show steady increase since 2011.

* The Home Depot has eight corporate values:

* Taking care of our people

* Giving back to our communities

* Doing the right thing

* Excellent customer service

* Creating shareholder value

* Building strong relationships

* Entrepreneurial spirit

* Respect for all people (Farfan, 2014, p. 2)

Current Situation

Home Depot’s business model is offering a one-stop shop with massive warehouses that carry a large variety for do-it-yourself (DIY) enthusiasts, do-it-for-me (DIFM) customers, professional contractors, and home owners. The business model comes from a philosophy of Bennie Marcus and Arthur Blank, the creators of Home Depot, to offer a wide selection of products, competitive prices, and quality customer service (Spencer, 2013, p. 3). Home Depot has multiple lines of business such as the Home Depot store, Home Depot Supply, EXPO Design Centers, and The Home Depot Landscape Supply (Kompani, 2014, p. 3). Home Depot carries up to 40,000 different kinds of building materials, home improvement supplies, appliances, and lawn and garden products. The types of customers that Home Depot has is do-it-yourself (DIY) customers, customers choosing to have qualified professionals to complete home renovation products for them, and professional customers...