Topic > Home Depot Structure Analysis - 1713

Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank in Atlanta, Georgia. With their shop, Marcus and Blank have revolutionized the do-it-yourself home improvement market in the United States. Home Depot started out as a very simple store, operated in a no-frills department store. Home Depot carries more than 35,000 products, featuring national brands along with the Home Depot brand. Early on, Home Depot was able to offer exceptional customer service with knowledgeable employees who could guide customers through home remodeling projects. Since opening, Home Depot has experienced incredible growth and today is the second largest retailer in North America and the largest home improvement retailer. Internationally, Home Depot has expanded into Canada, Mexico and is starting to operate stores in China. Home Depot's competition includes Sears, Ace Hardware, and Lowes (its main competitor). The article, "Renovating Home Depot", describes how, since the arrival of the new CEO, Robert Nardelli, the company's strategy has shifted towards a more militaristic style. Home Depot began as a "decentralized and entrepreneurial" company and is now transitioning to a different management style. Nardelli likes to hire former soldiers and perhaps uses the military as a model for the new company structure. Under Nardelli's leadership, Home Depot is becoming more centralized, and the following good financial ratios are signs that this is a good strategy (Grow 50). The article focuses on the leadership of Home Depot CEO Robert L. Nardelli. He was born on May 17, 1948 in Old Forge, Pennsylvania. He earned his bachelor's degree in economics from Western Illinois University and also holds an MBA from the University of Louisville. Nardelli joined GE in 1971 as an entry-level manufacturing engineer. In 1995, he became president and CEO of GE Power Systems, also holding the title of senior vice president of GE. In 2000 he left GE, and about 10 minutes after leaving he received a job offer from a member of Home Depot's board of directors. Nardelli became CEO of Home Depot in December 2000 despite having no retail experience. Using GE's "Six Sigma" management strategy, he radically overhauled the company and replaced its freewheeling business process. He changed the decentralized management structure, eliminating and consolidating division managers. It also installed processes and streamlined operations by implementing a computerized automated inventory system and centralizing supply orders at its Atlanta headquarters.