Need Assignment2 part 2 in 9-10 hour

Vice President of Operations, Part 1

Cary Grant

Bus 515

Strayer University

Professor Phyllise Parise

October 23, 2017

Introduction

With the intentions of providing one-stop shopping for do-it-yourselfers, Bernie Marcus and Arthur Blank founded The Home Depot in 1978. When the founders opened the first two Home Depot stores in Atlanta, Georgia on June 22, 1979, they did not realize how revolutionary the newly designed hardware store would be for both the home improvement and retail industry. The company has grown over the past thirty-eight years to be the world’s largest home improvement retailer with more than 2,200 stores and more than 400,000 employees in Canada, Mexico and the United States (The Home Depot, 2016). The closest competitor to The Home Depot is Lowe’s, which was founded in North Carolina in 1946. The culture and success of The Home Depot is built on the eight values or guiding principles. The values that are upheld are creating shareholder value, entrepreneurial spirit, taking care of employees, respect for all people, doing the right thing, building strong relationships, giving back and excellent customer services. The Home Depot uses a unique three- legged stool operating strategy based on customer experience, product authority, capital allocation driven by productivity and efficiency, and interconnected retail that drives lasting customer and shareholder value (The Home Depot, 2016).

Key Elements of Operational Efficiency with its Operational Strategy

A company’s organizational strategy consists of all the actions they plan to take to achieve long-term goals. The strategy arises from the company’s mission statement, which tells why the company is in business and its vision statement which is what the company will be achieved when it achieves its mission (Johnson, 2012). According to Furguson (2017), The Home Depot’s mission statement is “to provide the highest level of service, the broadest selection of products and the most competitive prices”. The mission statement identifies The Home Depot’s key elements of its operational strategy as high-quality service, broad product selection and competitive prices. The Home Depot’s vision statements identify several more key factors that define the company’s operations. The vision statements are to provide “one-stop shopping for the do-it-yourselfer” and “to create a company that would keep alive the values that were important to us. Values like respect among all people, excellent customer service and giving back to communities and society” (Ferguson, 2017). The statement shows that The Home Depot desires to be a one stop shopping venue that offers a wide variety of products to do-it-yourselfers and suggests values and corporate social responsibility that the company is pursuing.

Tasks Out of Alignment with Operational Strategy

Operational efficiency has been a crucial part of achieving low prices while still offering high levels of customer service, however, some tasks do not align with the operational strategy. One task is the hiring of outside services to complete projects for consumers. This process takes away from the mission and vision of the store. Another weakness is that e-commerce has taken away from the customer service that The Home Depot strives to provide. Because more people are shopping online and having items shipped to store, The Home Depot is reducing the amount of staff in store to reduce cost. This gives the brick and mortar location a disadvantage because consumers have higher expectations of a physical store. A third weakness would be timely identifying and effectively responding to consumer needs, expectations ad trends (The Home Depot, 2016).

New Operations Strategy

A new operations strategy can be created for The Home Depot based on competitive priorities. The four competitive priorities to be used are cost, flexibility, quality, time and innovation. Competitive priorities represent different areas of focus by which a firm can achieve a competitive advantage. Home Depot can improve its operations strategy by continuing to not only focus on low costs and quality products but also on the flexibility of getting products and the amount of time it takes to get products to customers. They have already started to head this way by allowing products ordered inline to be picked up in store or delivered to the customers home. It is also possible to buy a product at one store and pick it up at another store (The Home Depot 2016).

Enablers

In general, organizations can compete in five key competitive priorities - cost, quality, time, flexibility and innovation. Operation’s managers help to support a firm’s strategy to be a low-price leader through good design and by eliminating costs. Most of the costs are endured from the supply chain. Many operations managers focus on improving the quality of goods and services provided. Enablers of design flexibility include outsourcing, empowering employees as decision makers, information technology, and close relationships with customers to understand the needs and wants that are emerging. Innovation is supported by operations managers by introducing new goods and services.

The Home Depot has equipped many relevant, instructive, and extrapolative features to its system which will act as enablers to guarantee the long-term achievement of their method. Three facilitators that are used are inventory visibility, predictive customer analytics, and fulfillment strategy. Inventory visibility allows consumers to search online for products they need and receive feedback to the availability at local stores. The pro of this enabler is that consumers know if the store has what they need prior to driving to the store. A con of this enabler is that when the inventory is wrong, customer service has to deal with unsatisfied customers. Another con is that if the product is seasonal, it shows as being in stock even if it is not.

The use of data mining through social data, product reviews, search trends and purchase patterns to forecast and direct consumer purchasing options is predictive customer analytics. The con of this enabler is the elevated level of data breaches, which are causing fewer consumers to use e-commerce, restricts the amount of data available. A pro is the personalized shopping experience of consumers in comparison to the bond with sales associates within the store. Fulfillment strategy must provide numerous options to catch the attention of consumers. Retailers are concentrated on building in-store, online, and direct-to-consumer options and many are leveraging current and new organization in creative ways. A con here is that product that have already been inventoried into a store cannot be repackaged and shipped to a consumer. A pro is that storefront locations can be used as distribution centers making it possible for consumers to buy products online and receive delivery quicker.

Conclusion

The Home Depot must remain aware of the operational efficiency with its operational strategy and determine what tasks are not in alignment with the company’s operational strategy. After each determination, another operations strategy can be developed using the competitive priorities of cost, quality, time, flexibility and innovation. The company can also develop new enablers that are aligned with the long-term strategies. The pros and cons of the new enablers must be evaluated as well. The Home Depot will continue to be an industry leader as long as it continues to ensure operational efficiency with its operational strategy and makes necessary changes as needed.

References

Ferguson, E. (2017, February 3). Home Depot’s Vision Statement & Mission Statement - Panmore Institute. Retrieved from http://panmore.com/home-depot-vision-statement-mission-statement

The Home Depot. (2016). The Home Depot | About Us. Retrieved from https://corporate.homedepot.com/about

The Home Depot. (2016). The Home Depot 2016 annual report. Retrieved from http://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/reports-and-presentations/annual-reports/annual-report-2016.pdf

Johnson, S. (2012, December 18). What Is the Meaning of Organizational Strategy? | Chron.com. Retrieved from http://smallbusiness.chron.com/meaning-organizational-strategy-59427.html