CONTROLLING

Controlling

Controlling

Corporate Level Strategy

The Home Depot integrates a dynamic corporate level strategy commensurate to its ability to sustain rapid expansion. Since inception in 1978? The Home Depot has enjoyed a 30% average annual growth rate. Their phenomenal growth rate is a partial product of their corporate level strategy. The Home Depot has primarily used a Growth / Concentration / Horizontal strategy to achieve unprecedented growth. The firm focuses on expanding their products into multiple geographic locations at the same point their value chain? while simultaneously increasing the range of products and services offered to current markets. For example? as the company penetrated markets throughout the U. S. Sunbelt? they experimented with enlarging their store's garden centers and initiated an “Expo Design Center” storefront. The expo centers are a geographic market niche? targeting upscale homeowners by utilizing computer-aided design technology (CAD) and offering top-of-the-line major kitchen appliances.(see appendix for the organizational structure of Home Depot)

Occasionally? the corporate strategy follows a Stability / Short-term / Pause strategy to digest their rapid growth. From 1978 to 1983? The Home Depot grew from an idea to a nationally recognized leader the do-it-yourself industry. Home Depot's CEO Mr. Nardelli believed the only restraint The Home Depot faced was its inability to quickly recruit and train new staff.

The rapid expansion into the unknown territories of Houston and Detroit took management's attention away from the other stores and their earning dropped 40% in 1985. For a brief period in 1986? The Home Depot followed a geographically oriented Retrenchment / Survive / Divestment strategy in Detroit? Michigan. They withdrew from Detroit? by selling off their five brand new stores. After regrouping in 1987? The Home Depot returned to a horizontal growth strategy by opening six California and two Tennessee stores.

International Operations

The placement of international operations on The Home Depot's organization chart reveals that the firm treats international stores similar to those the U. S. divisions. There are presidents for each geographic division the U. S.? a president for the Canada division and presidents for the Expo and Crossroads divisions. All presidents have straight linkages to each practical division.

Home depot created a Vice President for expansion into Mexico? and positioned the office on the same level as the functional divisions. This is because The Home Depot plans a cautious and slow expansion into Mexico? where they will pay special attention to Mexico's volatile economy and unskilled workforce. The Mexico division is ...