September 27, 2012
Home Depot Case Analysis
The Home Depot Case takes place in 2007 during a time when the former chairman and CEO Robert Nardelli had recently announced his “mutually agreed” upon resignation from the company. Nardelli started at Home Depot in 2000 and produced rapid growth for the company because of his cost-cutting measures and centralized purchasing strategies. However, even though the profits had more than doubled during Nardelli’s tenure the employees, managers, and customers criticized him for negatively affecting the quality of customer service and company identity. The current CEO, Frank Blake, is now left with deciding which of Nardelli’s strategies to keep, change, or get rid of in order to strengthen a culture of customer service at Home Depot.
A.) Marketing Challenge
Nardelli introduced a number of changes that brought the company into the technological revolution and established many new and profitable business processes. However, the previous CEO’s strategy of cost cutting and centralization had a negative effect on the level of customer service, which had previously been the company’s “prized centerpiece of Home Depot’s brand” (p. 11). Frank Blake must decide how to deal with this weakness and change current consumer’s perception of Home Depot’s lack of customer service. One dissatisfied customer from Florida commented that “Gross sales at Home Depot may be soaring, but the customer service is, well, just gross” (p. 20). She elaborated by specifically commenting on the high amount of closed checkout lanes and the attempt to push customers into a self-checkout area. Problems like these are hurting the public perception of the company and should be addressed to avoid a loss in market share. The new CEO must decide how to address the issue and determine which alternative is most suitable for Home Depot. I will discuss two distinct alternatives...