The company is involved in the sale of various building materials, garden products, home improvement and a wide range of services to its customers. The organization has the total of about 200 employees. Due to its strongly built brand, the company controls a significant fraction of the market. The company has several major departments. These include appliances, building materials, kitchen, tools, windows and doors, lighting, décor and outdoors (The Home Depot par 3).
Home depot has managed to maintain a good relationship with its suppliers. The company relies on its suppliers to provide more than 30,000 varieties of products. Although the company relies on a large number of suppliers, it is powerful enough to control the prices because it represents a significant proportion of its suppliers’ sales. This has helped the company to maintain low costs hence developing its competitiveness. Operational costs are one of the major sources of an organization’s operational expenses (Dale 58).
Currently, Home Depot has three different customer segments. One of the major segments is the professional consumers who are interested in doing their own home improvement developments. Another segment of the company is the buy it yourself. This is the segment that purchases the company’s products but they require a trained person to install the products in their homes. Some of the professionals that are closely associated with Home Depot include the contractors, Electricians, Plumbers among others. This section of customers provides a significant fraction of the company’s sales because it is involved in large projects that require large scale supplies.
In order to maintain a high level of performance, Home Depot is committed to provide a good working condition for employees. In order to achieve maximum production from its employees, the company has come up with various ways of rewarding the top performing employees. This has significantly increased the overall level of productivity. Employees are also involved in making critical decisions that influences the company. This significantly increases the performance of the organization.
From the above analysis, it is clear that Home Depot has recorded a recommendable level of performance. However, there are some issues that tend to threaten the performance of the organization. These problems can be addressed through a number of ways. For instance, operational costs have recently increased from $ 727 million to $ 1.04 billion (Carvin par 6). This represents a larger percentage increase. The company must therefore adopt the cheaper ways of production. For instance, the company can consider increasing the number of stores in its market networks. Currently, the company is incurring very high transportation costs. Building more stores will help the company to reduce transportation cost because it will be nearer to its customers.
In conclusion, there are a number of ideas that can be borrowed from Home Depot. To start with, the company has managed to maintain a good relationship with its customers and suppliers. This has helped the company to maintain a good relationship with its customers and suppliers, the fact that has helped the company to maintain a high level of sales and low cost purchases respectively. Other organizations can also improve their competitiveness by maintaining good customer and supplier relationships.
Carvin, Neil. “Home Depot: Income Statement Analysis for the January 2011 Quarter.” Seekingalpha, 2011. Web. 29th Nov. 2011. <http://seekingalpha.com/article/254725-home-depot-income-statement-analysis-for-the-january-2011-quarter>
Dale, Ernest. Management: Theory and Practice. U.S.A: Rex Bookstore, Inc. 1969. Print
The Home Depot. “Departments.” Homedepot, 2011. Web. 29th Nov. 2011. <http://www.homedepot.ca/departments>