Home Depot
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On April 23, 1998, Arthur M. Blank, President and Chief Executive Officer (CEO) was presiding over a strategic planning session of new strategies for each of Home Depots six regional divisions for the professional contractor market. Home Depots management estimated this market to be $215 billion in 1997. Home Depot has been concentrating on the Do-It-Yourself/Buy-It-Yourself market sector, which Home Depot management estimated to be $100 billion in 1997. Home Depot sales were $24.1 billion in 1997. The combined sales for Do-It-Yourself/Buy-It-Yourself sector and the professional sector were projected to be $365 billion. The heavy industry sector was treated as a separate market sector. Presently, Home Depot has less than 4 percent of the $215 billion professional sector.
In early April 1998, the companys management announced a new store format. In 1998, the company was to build four new stores with about 25 percent (25,000 square feet) of the existing store size. These stores would be like the local hardware stores or Ace Hardware stores.
Founded in Atlanta, Georgia, in 1978, Home Depot was the worlds largest home-improvement retailer and ranked among the ten largest retailers in the U.S. At the close of fiscal year 1997, the company was operating 624 full-service, warehouse-styled stores–555 stores in 44 states and 5 EXPO Design Center stores in the UNITED STATES, plus 32 in 4 Canadian provinces.
The average Home Depot store had approximately 106,300 square feet of indoor selling space and an additional 16,000-28,000 square feet of outside garden center, including houseplant enclosures. The stores stocked approximately 40,000-50,000 different kinds of building materials, home-improvement products, and lawn and garden supplies. In addition, Home Depot stores offered installation services for many products. The company employed approximately 125,000 associates, of whom approximately 7,900 were salaried and the remainder paid on an hourly basis.
Retail industry analysts had credited Home Depot with being a leading innovator in retailing by combining the economies of warehouse-format stores with a high level of customer service. The company augmented that concept with a corporate culture that valued decentralized management and decision making, entrepreneurial innovation and risk-taking, and high levels of employee commitment and