Case study- Management
“Playing Hardball at Home Depot.”
The Home Depot is an American retailer of home improvement and construction products and services. Headquartered in Vinings, just outside Atlanta, The Home Depot employs more than 331,000 people and operates 2,193 big-box format stores across the United States (including the 50 U.S. states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam), Canada (ten provinces), Mexico and China. The world's second-largest Home Depot (as of the end of 2007) opened November 14, 2007 on the island of Guam.
The Home Depot is the largest home-improvement retailer in the United States, ahead of rival Lowe's, and the second-largest general retailer in the United States, behind only Wal-Mart.
Nardelli became CEO of The Home Depot in December 2000 despite having no retail experience. Using the Six Sigma management strategy used at GE, he dramatically overhauled the company and replaced its freewheeling entrepreneurial culture. He changed the decentralized management structure, by eliminating and consolidating division executives. He also installed processes and streamlined operations, most notably implementing a computerized automated inventory system and centralizing supply orders at the Atlanta headquarters.
Nardelli was credited with doubling the sales of the chain and improving its competitive position. Revenue increased from $40.57 billion in 2000 to $85.15 billion in 2005, while profit rose from $12.6 billion to $25.8 billion. While this was a slower rate of growth than Home Depot had previously experienced (the company doubled in size every 4 years from 1979 to 2001), it must be noted that the high growth rates were largely due to rapid expansion. As the company was reaching its retail limit in the US, Nardelli was brought in to shepherd its transition into a mature business.
Some have criticized him for not maintaining the growth that the company had previously... [continues]
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