Case study home depot implements stakeholders orientation

e Timeline 1978 Bernie Marcus and Arthur Blank were fired from Handy Dan Home Improvement Centers 1979 The first two Home Depot stores opened on Memorial Drive and Buford Highway in Atl

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Class: International Business

Management 64C

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e Timeline

1978 Bernie Marcus and Arthur Blank were fired from Handy Dan

Home Improvement Centers

1979 The first two Home Depot stores opened on Memorial Drive and Buford Highway in Atlanta, GA

1981 The Home Depot stock went public on NASDAQ and raised

$4.093 million 1986 Focus began on Pro Customers

1990 The Home Depot became the largest home

improvement retailer 1987 Stores began using UPC

scanning systems

1989 The 100th store opened

1994 Aikenhead’s stores were acquired to create

Canada division 2000 Establish e-commerce site

with test market in Las Vegas 2002 The Home

Depot Foundation was established

2002 Expanded into Mexico with the acquisition

of Del Norte 2005 The 2000th store opened

2007 Opened the first rapid deployment center, marking the

beginning of one of the most dramatic supply chain

transformations in retail history

2009 Launched Customer FIRST (Find, Inquire, Respect, Solve,

Thank) Training and Power Hours to customer service in stores

2010 Debuted Spring Black Friday, a list in retail history

Rolled out FIRST Phone device to US stores, a key enabler of

interconnected retail ca- pabilities and supply chain improvements

2012 The Home Depot Foundation pledged an additional $50 million to veterans’ hous-

ing initiatives, increasing its total commitment to 80$

2014 Opened first of three new Direct Fulfilment Centers to support

the company’s in-

terconnected retail capabilities

2016 The Home Depot Foundation pledged a quarter of a billion dollars

to veterans’

causes by 2020

2017 Sales surpassed $100 for the fiscal year 2017

2019 The Home Depot celebrated its 40th anniversary and launched a new tagline:

“How does get more done”

2020 The Home Depot responded to the Covid-19 pandemic by

investing $2 billion in enhanced compensation and benefits for our

associates and donating nearly $10 million in PPE to help strengthen

communities

Summary

When Bernie Marcus and Arthur Blank opened the first Home Depot store in Atlanta in 1979, they forever changed the hardware and home- improvement retailing industry If a product is not provided in one of the stores, Home Depot offers 250,000 products that can be specially ordered Additionally, the company offers free home improvement clinics to teach customers how to tackle everyday projects like tiling a bathroom Currently, Home Depot employs more than 300,000 people and operates over 2,250 Home Depot stores in the United States, Mexico, Puerto Rico, China, the Virgin Islands, Guam, and Canada

MANAGING CUSTOMER RELATIONSHIPS

“Our mission is to empower our customers to achieve the home or condo of their dreams?" When Costello arrived in 2002 Home Depot's reputation was faltering The new philosophy was expressed by the new Home Depot mantra: "You can do it” Despite Home Depot's proactive approach to customer issues, the company has had its share of challenges along the way However, the University of Michigan's annual American Customer Satisfaction Index in 2013 showed that Home Depot has consistently placed behind competitor Lowe's when it comes to customer satisfaction The increase in customer satisfaction was due to several efforts on the part of Frank Blake

ENVIRONMENTAL INITIATIVES

Home Depot began its environmental program on the twentieth anniversary

of Earth Day in 1990 Home Depot initiated several programs to minimize the firm's and its customers' impact on the environment In addition, it was the first retailer in the world to combine a drive-through recycling center with one of its Georgia stores The company also began to replace its hardwood wooden shipping pallets with reusable "slip sheets" to minimize waste and energy usage and decrease pressure on hardwood resources In

1999 Home Depot joined a non-profit organization that promotes

EMPLOYEE AND SUPPLIER RELATIONS

Home Depot strives to apply social responsibility to its Supplier employment practices, with the goal of assembling a diverse workforce that reflects the population of the markets it serves Since the lawsuit, Home Depot worked to show it appreciates workforce diversity and seeks to give all associates an equal chance to be employed and advanced In 2005, Home Depot formed partnerships with the ASPIRA Association, the Hispanic Association of Colleges and Universities, and the National Council of La Raza to recruit Hispanic candidates for part-time and full-time positions It came into contact and did business with a diverse range of suppliers, including many minority and women-owned businesses The company became a founding member of The Resource Institute, whose mission is to help small minority and women-owned businesses by providing them with resources and training

NEW TECHNOLOGY INITIATIVES

Compared to its rivals, Home Depot lagged technologically Unlike its rival Lowe's, Home Depot did not allow customers to order products online and pick them up at the stores As more con- sumers choose to complete their transactions on the Web, this represented a weakness for Home Depot In

2010 Home Depot's online sales constituted only 1.5 percent of overall sales Home Depot was not adapting as quickly to the fast-paced world of technology

It embarked on several technology projects, after realizing its limitations in this area These initiatives are intended to improve both its customer service and Home Depot's daily operations, for example investing $64 million to create First Phone, a device that replaces the old computers on associates' carts

It released 25,000 First Phone Junior devices in 2013, a scaled-down version

of First Phone that enables staff to more effectively manage inventory, help customers, and move through checkout lines Home Depot also redesigned its website to improve navigation and communication chan- nels In 2011 the website was launched for "Pros" (Professional and Contractor Services) Ad- ditionally, Home Depot is improving its logistics, having suppliers send trucks of merchandise directly to the stores Home Depot invested $1.3 billion in technology over a three-year period

A STRATEGIC COMMITMENT TO SOCIAL RESPONSIBILITY

Home Depot focuses corporate social responsibility efforts on affordable housing and disaster relief In 2002, the company initiated the Home Depot

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Foundation, which provides additional resources to assist nonprofits in the

US and Canada to increase awareness and successfully demonstrate the connection between housing, the urban forest, and the overall health and eco- nomic success of their communities The Foundation invested $300 million in building and ren- ovating affordable, sustainable homes $80 million in building homes for veterans, and donated

$2.7 million to fund Repair Corps repairs to the homes of disabled veterans

Additionally, Home Depot addresses the growing needs for relief from disasters such as hurri- canes, tornadoes, and earthquakes When Hurricane Sandy hit the American East Coast in 2012,

Home Depot responded with millions of donations, gift cards, supplies, and contributions to or- ganizations that provided food, clothing, shelter, and volunteer efforts the 2010 Haitian earth- quake, tornadoes in Oklahoma and areas of the Southwest in 2013 and many others

The Home Depot Foundation created a $1 million fund to provide financial support for the vic- tims of the tragedies Home Depot strives to secure a socially responsible reputation with stake- holders, committed to social responsibility as a strategic component of the company's business operations

CONCLUSION

Over the past 35 years, Home Depot has changed the do-it-yourself home improvement retail environment The company started with a clear understanding of its various stakeholders and has developed a strong commitment to customers, communities, suppliers, employees, and the environment As with most large organizations, Home Depot has made some mistakes but seems to be able to recover quickly and respond to ethical issues

Home Depot continues to pursue innovation and change to relate to its stakeholders The com- pany continues to upgrade and strengthen its competitive position and has earned a strong fi- nancial rating because of its effectiveness in implementing strategies targeted toward stakehold- ers

* 1 On the basis of Home Depot’s’ response to environmentalist issues, describe the attributes of this stakeholder Assess the company’s” strategy and performance with environmental and employee stakeholders

Bernie Marcus and Arthur Blank, the founders of Home Depot worked hard to make sure that they address all the concerns of their stakeholders They focused on social responsibility and regarded it as their moral and ethical duty to try to do philanthropic acts at a strategic level Whenever a company takes any action or decision, it involves all the stakeholders as stakeholders are all those people or companies that have an interest therein business Home Depot's implementation of Environmental Programs and _ social welfare programs has an impact on the stakeholders including the corporate itself, customers, environmentalists, and employees

Company’s impact on Natural Environment:

The owner of Home Depot's used their powers to incorporate philanthropic acts as an element of their culture at a strategic level They implement different environmental programs to attenuate their effect on the environment The corporate started using recycled material content They also launched a reverse distribution program

to recycle wallboard packaging used for shipping Aside from this, they decided to join a nonprofit

organization that aims to market responsible forest product buying and selling practices It had been seen that each year they took different initiatives to reduce the impact of the company's practices

on the natural environment which shows the company’s urgency for taking action to handle environmental issues

Began its environment program on the twentieth anniversary of Earth Day in 1990 by adopting a set of Environmental Principles It had shown that Home Depot initiated several programs to minimize the firm's and its customers’ impact on the environment, for instance:

The retailer began using store and office supplies, advertising, signs, and shopping bags made with recycled content

The corporate established a process for evaluating the environmental claims made by suppliers

Moreover, they became the first retailer in the world to combine a drive-through recycling center, the first home-improvement retailer to offer wood products, and certified as “well- managed” by the Scientific Certification System’s Forest Conservation Program

The company replaced its hardwood wooden shipping pallets with reusable “slip sheets”

to minimize waste and energy usage and decrease pressure on hardwood resources

In 1999 Home Depot joined the Certified Forests Products Council, a non-profit organization that promotes responsible forest product buying practices and the sale of wood from Certified Well-managed

Forests

Even after such a large amount of environmental welfare programs were initiated by the corporate, still environmentalists believed that the company just wanted to indicate that they take care of the environment but their practices were harming the environment so they protested against it, but Home Depot continued taking initiatives for the betterment of the environment which proved that the intentions of the company were actually for the betterment of the environment and were legitimate as their steps may well be proved with the proper justification that how it helped them in reducing effect

on the environment

Due to the destruction of old-growth forests, of which less than 20 percent still survive, Home Depot would stop selling products made from wood harvested in environmentally sensitive areas

In an effort to reduce its carbon footprint, Home Depot aimed to decrease not only operations but also simultaneously reduce transportation emissions emitted by the company So they installed dual-flush low-flow toilets in stores that reduce water usage by 40 percent and switched to high-efficiency T5 fluorescent lighting, which lowered overall wattage and created more energy-efficient lighting in stores