Competitor Analysis: Home Depot

Topics: True Value, Customer relationship management, Brand Pages: 5 (1820 words) Published: November 22, 2009
Competitor Analysis

Home Depot competitors are primarily in the home improvement and hardware retail industry, but also compete in the building materials retail and distribution, consumer electronics and appliances retail, and convenience stores and truck stops sectors. Some of Home Depot’s main competitors include: Lowe’s, True Value, and Ace Hardware. Now, these competitors are the main competition of Home Depot and all three stores carry about 75% if not more of what Home Depot sells. Keep in mind, that there are also smaller companies, often family-owned lumberyards or hardware stores that compete with Home Depot and the other large chain stores. However, Home Depot’s biggest competition is Lowe’s. “Home Depot and Lowe’s are home improvement retailers with very different value propositions. Home Depot has very austere, functional stores that are designed to appeal to the contractor or homeowners on the basis of function and price” (Aaker, 7). This industry is mainly driven by residential real estate construction and renovation. Large chains such as Home Depot, Lowe’s, True Value, and Ace Hardware are able to expand recently because of their focus on the home improvement market, with contractor sales as a sideline ( This is where the family-owned stores are able to successfully compete against these large chain stores because they effectively cater to the small and mid-sized contractors who believe that price is less important than the other services that these small stores can offer. High customer concentration is the value proposition that the small, family owned stores offer opposed to these large box stores that have limited customer concentration. The large chain box stores’ value proposition is low-cost. Yes, low-cost is what consumers are looking for in most cases however, many small to mid-size contractors and even do-it-yourselfers are interested in the value proposition of differentiation. They want the knowledge that the workers can give them. They will pay the extra money for better service opposed to no service and a less expensive price. Home Depot believes that their values are the guide to the beliefs and actions of associates on a daily basis. Home Depot’s values are the base to the Company of their unique culture. It is said, that Home Depot’s values are their “competitive advantage in the marketplace” ( Home Depot considers themselves to be the “orange blooded” entrepreneurial spirit of our culture ( Home Depot has eight main values that they try to accomplish. First, they think it is most important to take care of people. This is the key to their success, treating people well. Second, Home Depot gives back to their communities. This includes associates of Home Depot to give their time, talents, energy and resources to worthwhile causes within their own community ( The third value is to do the right thing. This means to use good judgment and “doing the right thing” instead of “doing things right.” Home Depot attempts to understand the impact of their decisions and they take full responsibility of their actions. The fourth value is excellent customer service. This is similar to their first value of treating people well but not only must they use mannerism with their customers they must be able to provide quality products, service, price and selection. Also, they must go that extra step to make sure the customer understands about the merchandise and why they have decided to buy the particular item and buy it at Home Depot. The fifth value Home Depot offers is to create shareholder value; basically, investors invest to provide the essential capital and Home Depot will provide the expected return on their investment. The sixth value is to build strong relationships; again relating back to the first value of taking care of their people and the fourth value of excellent customer service, building a strong relationship is key to success of the...
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