BUSN258 Case Study 1 |
Case Study 1: The Home Depot
The Home Depot is the leading home improvement store in the industry, and the fourth best retailer overall. The Home Depot is also known for being the largest home improvement retailer in North America, operating in 50 states, eight Canadian provinces, Puerto Rico, and Mexico (Arnold, 2006). In 2012 the Home Depot was named number 35 in the FORTUNE 500, in front of Lowe’s, who was number 54. Lowe’s is the Home Depot’s top competitor, who is the second leading appliance retailer behind Sears. Menard’s is their second biggest competitor, offering a full-service lumberyard in all of their stores (Hoovers, 2013).
The poor economy has affected the housing industry tremendously, having a significant impact on all stores. The outlook is bright for the home improvement industry though. Generation Y is preparing to enter the housing industry, which will provide an opportunity for an even larger market for these home improvement stores (Hoovers, 2013). There will be plenty of business to be earned.
Although the threat of new competition entering the industry is low because the established companies have competitive advantages (of low-cost structures, economies of scale, and brand loyalty), competition from current competitors is intense (DeFoe, 2012). The bargaining power of the consumers is also something to take note of. Customer’s taste, preferences, and expectations influence the demands for products and services (Hoovers, 2013). The Home Depot has to provide the products that the customer’s want, which leaves little room to stand out from competitors. These reasons are why customer service is so important.
In an interview that I conducted with a customer service representative at The Home Depot, I discovered how important customer service is to the company. “Customer service is important to the company because the competition is high in this...