The Home Deposit

The Home Deposit has opportunities to expand to world markets and increase its presence. It has the structures and well developed brand name which gives it an opportunity to cross boundaries to international markets. Coupled with its ability to invest in expansions, it is an opportunity which will bring in more revenues in the long term (The Home Depot, 2010).

The other opportunity for Home Depot is in its suppliers. The company should expand its supply base all over the world. This will enable the company to source its products globally enhancing it to obtain the best quality of its supplies which will grow its revenue margins. The best quality products always attract customers and as such lead to increased customer base which translates to increased profits (The Home Depot, 2010).

The Home Depot has utilized information technology skills in its business operations. The company has developed service performance improvement (SPI) program which gives the company enormous opportunities of growth by increased efficiency, reduced costs of operation and continued increase in profit margins (The Home Depot, 2010). The utilization of new technology especially in an expanding business will enable its management be able to track all the operations in its business and as such early control measures are put in place.

Threats. The company is in a very competitive industry of home improvement which is vulnerable to a lot of external factors such as price, customer satisfaction and so on. Thus it has a potential of losing business to its competitors if it does not respond effectively to their advances. There has been threat of new entrants in the market from stores which specializes in a single line of product by offering the best services on it (The Home Depot, 2010).

Another threat to Home Depot is the presence of Lowes in the market. This is because customers view the two retail companies as of the same competence. Thus it leads to customer reduction in numbers whenever Lowes enters a market which was served solely by Home Depot (The Home Depot, 2010). This is a potential threat especially in a situation where the customers do not differentiate among the retail chains.

The other threat is that of saturated United States market with home improvement products. There is a tendency that as the companies compete and others emerge it will eventually reach at saturation level where it may become difficult for Home Depot to make normal profit margins (The Home Depot, 2010).

Competitive Advantage. A company is said to have a competitive advantage over its competitors if it has been able to sustain a profit level which surpasses the average in the industry. Many businesses’ strategies target at maintaining competitive advantage over its peers (Competitive Advantage, 2010). A competitive advantage is an indicator that a company’s management strategy is successful and a good motivator for its staff to continuously maintain the advantage.

Competitive Strategy. This is the business techniques used by the company in its management in order to compete successfully and achieve competitive advantage. This is a narrow strategy aimed at growing loyal clientele and attracting new customers. It will include strategies to expand to new markets as well as maintaining the current markets without giving in to competitors’ pressure (Competitive Strategy, 2010). The competitive strategy will serve as a management tool for achieving competitive advantage.

For several years since establishment, Home Depot has been able to grow steadily due to its competitive advantage that it has over its competitors. It has managed to take advantage and build on its brand name to international status by putting in place competitive strategies. Therefore, Home Depot has competitive strategies in place which has enabled it to earn competitive advantage and achieve its global strategic management objectives. This is justified by Home Depot continued dominance in the home improvement retail industry since its inception (The Home Deport, 2010).

Chem-Dry a Home Depot Product. One of the products of Home Depot is Chem-Dry which is a cleaning franchise chain. It is the largest carpet cleaning franchise in the world owned by Home Depot. The Chem-Dry is available in several countries and it cleans carpets. The businesses in several countries join the chain and use the product under the name of Home Depot. They retain their profits and remit agreed amounts to Home Depot. This has been a very successful product for Home Depot which has stood the test of time and customers have become loyal (The Home Deport, 2010).

The Home Depot owns the Chem-Dry product but allows other business to operate under its name. This chain enables Home Depot to reach a large customer base without directly involvement in its management at all levels. There are set requirements and qualities that the franchising agreement requires so as to ensure that the intended quality of Home Depot is not compromised (The Home Deport, 2010).

Strategic Alternatives Open to Home Depot. There are strategic alternatives open to Home Depot to increase its competitive advantage over its competitors which include efficiency in operations, flexibility, innovation and learning. The company should be in a position to share its investments and costs which will ensure that the operations costs are brought down. When Home Depot utilizes its efficiency in all its business processes, it will be able to manage its expenses and thus increase its competitive advantage (QuickMBA, 2010b).

The company can also explore the flexibility strategy. This is where the company expands its portfolio through diversification (Global Strategic Management). This will ensure that in case of a failure of one product line in portfolio, the other products will continue maintaining the company’s profit margins. This will reduce overreliance on a single product line which may not be sustained in hard economic times and competition. This strategy will ensure that Home Depot maintain its lead position in home improvement industry out of its diversified portfolio (QuickMBA, 2010b).

The company should also engage in innovation strategies. This will enable creation of new business ideas and strategies to maintain its competitive advantage. The process of innovation is important for the purposes of going concern of any business. Therefore, innovation is always an open alternative for Home Depot to increase its business presence and profitability which ensures its financial strength is maintained (QuickMBA, 2010a).

The other open strategy of Home Depot is to train its staff on their roles of ensuring continued business success. The sales associates should be trained on all home improvement options to their excellence so that they serve the customers competently. This will attract more customers who are satisfied with Home Depot products resulting in maintained competitive advantage (QuickMBA, 2010a).


The proper global strategic management applied by Home Depot has enabled it to succeed in its business operations. Therefore, this concept is useful for any business which needs to grow successfully in any given industry. The concept of applying competitive strategy in management is useful for achievement of competitive advantage and in overall a successful global strategic management.