Introduction
The Home Depot Inc. (Home Depot) is a retailer of home wares. It provides a range of goods, including furniture, appliances, hardware, electrical goods, kitchen and bathroom products, flooring and paint goods, and lawn and garden products for both indoor and outdoor use. The business provides a number of services, such as installation services, home delivery, e-retail, and credit card services. HDX, Husky, Hampton Bay, Home Decorators Collection, Glacier Bay, Vigoro, Everbilt, The Home Depot, LifeProof, and PetProof are just a few of the names that Home Depot sells its goods under. It sells its goods on a number of e-commerce websites, including blinds.com, thecompanystore.com, homedepot.com, homedepot.ca, and homedepot.com.mx. The business has operations in the US, Canada, and Mexico. Atlanta, Georgia, in the US, serves as the company’s headquarters.
To ensure ongoing corporate growth, Home Depot’s general strategy and aggressive growth initiatives are intertwined. The business dominates the domestic retail home improvement market in the US. The general strategy of Home Depot directs the company’s overarching plan for gaining the largest market share. However, Home Depot’s intensive growth plans outline the methods needed to maintain business growth in the global retail home improvement sector. The effective execution and fusion of Home Depot’s general strategy and intensive growth strategies are key to the company’s leadership.
The comprehensive growth strategies employed by Home Depot provide support for its general plan. This combination of strategic goals supports Home Depot’s dominant position in the retail home improvement industry.
Generic strategy of Home Depot Inc.
The current generic approach of Home Depot (based on Porter’s model) combines wide differentiation with cost leadership. Cost leadership was the company’s initial general strategy. For instance, the company’s generic cost leadership strategy placed a strong emphasis on Everyday Low Prices to draw customers when the first Home Depot stores initially debuted in 1979. But currently, Home Depot’s primary generic strategy is broad differentiation. Offering distinctive goods or services to compete with other home improvement businesses, particularly Lowe’s, is known as differentiation. Home Depot currently uses cost leadership as its secondary generic strategy and broad differentiation as its major generic strategy to sustain leadership in a market that is becoming more and more competitive.
Home Depot’s strategic goals are to provide a wide range of items and high-quality services based on the broad differentiation generic strategy. Many of the workers in Home Depot’s warehouses and retail locations are skilled tradespeople, such as plumbers and carpenters, who offer consumers professional advise. On the other side, Home Depot’s financial goal is cost minimization based on the cost leadership general approach. Additionally, the strategic goal of forging close and exclusive ties with suppliers aids the business in reducing costs.
Intensive Growth Strategy
Market expansion: Home Depot’s primary intensive growth strategy is market development. By establishing the company’s presence in new markets or market categories, this rigorous strategy aids corporate growth. Market expansion at Home Depot typically takes the form of acquisitions. For instance, Home Depot purchased Interline Brands in July 2015 to enter the market successfully for non-industrial enterprises. This intensive expansion strategy’s strategic goal is to continue acquiring businesses in order to dominate the market. This aggressive growth strategy complements Home Depot’s general broad differentiation strategy.
Product Development: Product development is a supplementary, high-intensity growth strategy used by Home Depot. Through the development of new products to draw in additional clients, this rigorous strategy helps the firm flourish. Home Depot’s house brands, such as Husky, Glacier Bay, and Commercial Electric, for instance, support the company’s expansion and competitiveness. Increasing the company’s product mix is a strategic goal that is connected to this aggressive expansion strategy. This aggressive growth strategy by Home Depot supports their generic approach of broad differentiation.
Market encroachment: Market penetration serves as Home Depot’s secondary or tertiary growth strategy. Through increased sales of the same products to clients in the same or current market, this intensive technique promotes business growth. For instance, Home Depot uses promotional sales and discounts to attract more customers from its existing markets. Offering items at competitive prices is a strategic goal based on this intense expansion approach. This rigorous expansion strategy is supported by Home Depot’s general cost leadership approach.
Marketing and sales strategy
Home Depot has effectively merged its web and store inventory as part of an effort to improve its offering. They are aware that not only are customers’ needs changing, but that they are also more digitally engaged than ever. Additionally, they guarantee a constant improvement in customer experiences at all points of contact. They are adding voice and visual search in addition to letting customers check product availability through the website or app. Customers may quickly acquire home renovation products with their “purchase online, pick up in-store” service, which has been shown to be one of the key factors in driving online conversion.
They successfully win the confidence and loyalty of their target audience by keeping their promise of low costs and excellent customer service. They are concentrating on DIY seminars, YouTube how-to videos, a robust social media presence, and an increase in the number of store employees available to assist consumers in finding what they need in order to forge better relationships.
Acquisitions as a strategy
When it comes to acquisitions, Home Depot has never been a hasty or impetuous decision-maker. It has consistently worked to increase its market leadership through customer service, product expertise, strategic capital allocation, and productivity and efficiency. Thus, its choice to purchase Interline last year was a hot topic. For Home Depot, it was the first sizable acquisition in nine years. But looking back, we can see that it was just a matter of logical reasoning and cold, hard business judgment. Home Depot’s maintenance, repair, and operations solution was strengthened as a result of the Interline acquisition, which also helped it to gain a significant competitive advantage over its rivals in the home improvement industry.
Use of mobile App
Everyone is aware that the modern customer journey revolves around mobile. However, using it merely as a resource for commerce or exploration is insufficient. By offering all assistance available to the customer, it should become an integral part of the purchasing process. Home Depot was quite good at identifying this need.
The marketing department at Home Depot found that customers’ greatest obstacle has been their inability to decide on a hue. Customers put off purchases by 41% because they can’t decide which color to get, while 31% put off projects because they don’t know which products are best for them. In order to overcome this color issue, the task was to digitally recreate the retail experience. Thus, a Color Project app was created by their marketing team. Customers can choose the ideal hue by imagining how it will seem in their dining room or bedroom.
Conclusion
If one does a sensible analysis, he or she will realize that what Home Depot did was not entirely novel. In the current environment, using movies and mobile devices is not all that unique. Here, what the Home Depot marketing team did with those ploys jumps out. Instead of using new channels, they were imaginative in the way they used the many available ones. In essence, they demonstrated that your actions matter just as much as your words.
