Home Depot and Bob Nardelli
Home Depot and Bob Nardelli
1.What are the internal resources, capabilities, or competences of Home Depot that seem to need upgrading or improvement as Bob Nardelli becomes the CEO and why are they important?
The internal resources, capabilities, or competencies of Home Depot that seem to need upgrading or improvement as Bob Nardelli becomes the CFO are the saturation of stores in suburban areas from accelerated growth, the lack of IT resources and service deficiencies, and the layout of the stores. In terms of the “Internal Building Blocks of Competitive Advantage”, superior efficiency was hurt by store saturation and the lack of IT resources, and superior customer responsiveness was hurt by the poor service and poor layouts. The “VRINE” model shows that all of these resources, capabilities, or competencies need upgrading because they are valuable but certainly not rare or inimitable at the moment. Value Chain analysis shows that the primary activities are affected by the poor quality of service and store layouts. The deficient secondary activities, which affect primary activities are from the lack of IT infrastructure and technology development.
2. What are the internally focused strategic initiatives that Home Depot pursues to address these important strategic needs and how will they help develop competitive advantage, or at least competitive parity, for Home Depot?
The first internally focused strategy was to stop the proliferation of stores by lowering the number of new stores it will open. This will help with competitive advantage by not saturating the suburban areas with too many Home Depot stores. Another strategy was the new service program that had employees allocate the maximum amount of time to helping customers and then restocking shelves at night. This will gain competitive advantage, or at least parity, through giving greater customer service throughout all the stores. Information Technology was improved through computer systems and self checkouts in stores which helped with store-to-store interactions and customer satisfaction of not having to wait in long lines. Store layouts were changed to improve customer satisfaction through ideas such as lowering displays to eye level and paint centers where customers could get advice and color match. Installation services in some stores allowed customers to get professional service at Home Depot and also helped facilitate relationships with contractors and professionals. These relationships helped spur the creation of the Home Depot Pro stores which catered specifically to