Term Paper on "Home Depot Is the Giant Do-It-Yourself"

Term Paper 4 pages (1332 words) Sources: 4 Style: APA

[EXCERPT] . . . .

Home Depot is the giant do-it-yourself home improvement chain selling a huge assortment of items. The customer driven company is known for its excellent customer service, helpful employees, professional clinics and in-store clinics building lasting relationships with customers by helping them to solve their problems. Today Home Depot is the largest in the U.S.A. with more than 355,000 employees and 2,114 stores.

Competitors

Lowe Companies Inc. is the direct as well as major competitor of Home Depot. Lowe started as a regional hardware store and today has become number two home improvement chain. Lowe over the years has given stiff competition to Home Depot resulting in the resignation of its CEO Robert Nardelli this year due to stock's poor performance as compared to Lowe's. "Though Home Depot is the No. 1 home-improvement retailer, No. 2 Lowe's has been growing faster. Lowe's posted a 4% rise in third-quarter sales at stores open at least a year and expects fourth-quarter sales to rise 2% to 4%. Meanwhile, Home Depot's same-store sales fell 2% in the third quarter, and fourth-quarter sales are forecast to be down 3% to 5%. But Lowe's has far to go to close the gap. Lowe's has 800 stores and posted $22 billion in 2001 sales. Home Depot has 1,400 stores and tallied $54 billion in 2001" (Howard, 2002).

Both Home Depot and Lowe are on the Fortune 500 companies list. Other competitors for Home Depot in home imporovement market include Wolseley plc, CCA Global Partners & Menard, Inc. Other than Lowe Home Depot also considers Wal-Mart as its major competitor as they both are in the retail market but Home Depot has its focus on home improvement.

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Target Market

Home depot target market is do-it-yourselfers and professionals for home improvement. Other than these there are BIY or Buy it yourself customers who do not have enough time. Both Lowe and Home Depot target the same market. The difference comes in the product line of Lowe as it also offers appliances and home electronics which Home Depot does not offer.

Products wide range of goods and services are offer by home improvement chain that include construction products, building materials, gardening products, home fashion items, lumber, millwork, plumbing & electrical supplies, tools, appliances, and furniture. Home Depot sells its products in unique big-box format stores where a wide variety of products are grouped in complementary product categories.The company maintains its uniqueness through its color startegy as its typical orange color became its brand identity, products and can be seen on signs, equipment and employee aprons.

Home Depot differentiates itself from the rest by diversing and focusing on aprticular areas. They have a wide range of exclusive brands available in their sttores specifically for different purposes. For example Hampton Bay is their brand for lighting, ceiling fans & patio furniture, Pegasus for kitchen and bath items, Glacier Bay for faucets and bath, RIDGID for power tools, Husky for tools, Vigoro for fertilizer & Ryobi for power tools, among others.

Both Lowe & Home Depot hace the same style of Big-box stores to create the environment of a warehouse. In order to differentiate and make a distinctive and better position Lowe has had the slogan of 'Improving Home Improvement.' Both Home Depot and Lowe have similar range of products where's Lowe differentiates in home appliances making it a senond largest home appliance chain after Sears.

Pricing Strategy

In retail business the overall pricing strategy could be high-end pricing philosophy because of unique products or wonderful customer service etc. Or low-end pricing philosophy due to low operating costs, special buys etc. Or medium pricing. Companies like Wal-Mart Company offers low prices and when it comes to home improvement and low prices than the name of Home Depot comes to mind. It is because of their pricing that they adopted the slogan of 'The Home Depot, Low prices are just the beginning' in the early 1990's. Prices run 20 to 30% below those of local hardware stores. However, there are… READ MORE

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Quoted Instructions for "Home Depot Is the Giant Do-It-Yourself" Assignment:

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The market structure in which The Home Depot competes, with consideration of the particular products and/or or service that it or provides. This can include the following:

* Name a major competitor of The Home Depot.

* Do you share the same target market?

* What differentiates the product and/or service from each other in terms of utility?

* What differentiates the product and/or service in terms of packaging, size and availability?

* Are your products and/or services available in the same geographic location, both domestic and international? Who has more global reach?

Include The Home Depot's pricing strategy for their products and/or services. This can include the following:

* In reference to your competitors, are you the price leader? If not, who is?

* Is your pricing at the skimming (high) or penetration (low) level? Provide rationale for your answers. Include at least three competitor prices.

# Measures The Home Depot has taken in an effort to sustain or enhance its competitive position in the given market structure. This can include the following:

* Does your the home depot have a strong marketing budget to create awareness for the product and/or service?

* Provide examples of media advertising the home depot has used.

* Name two countries that your company has entered. Has it been received favorably?

* Does the company offer value-added benefits to the product and/or service that competition does not have, such as extended warranty, rebates, buy-1-get-1 promotions, seasonal or quantity discounts, free samples?

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