With over 2,300 physical stores in North America — accompanied by a strong online presence —, the Home Depot business model is focused on the sale of tools, construction products, appliances, and services for home improvement projects. Home Depot is the world’s largest home improvement retailer, with about 490,600 employees and more than $151 billion in revenue. Home Depot’s stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones Industrial Average and Standard & Poor’s 500 Index.
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Bernard Marcus and Arthur Blank, the two founders of Home Depot, worked as president and chairman of the board, and CFO respectively in Handy Dan Home Improvement Centers — one of the first home improvement retailers in the U.S. In the late ‘70s, Handy Dan found itself in the midst of a brutal corporate takeover, which led to the sack of Marcus and Blank.
Then, they both decided to establish a kind of store that did not exist at that time, a one-stop-shop for the do-it-yourself-er. At that time, a big project might require a customer to go shopping in two or more stores to get everything they need. With help from investment banker Ken Langone and merchandising guru Pat Farrah, they opened their first two Home Depot stores on June 22, 1979, in Atlanta, Georgia.
Though they were much smaller in comparison to today’s stores, the first stores, at around 60,000 square feet each, dwarfed the competition and stocked 25,000 products, much more than the average hardware store at that time. On September 22, 1981, Home Depot went public on NASDAQ and raised $4.093 million.
Home Depot’s stock is publicly traded on the New York Stock Exchange under the trading symbol “HD” and is included in the Dow Jones Industrial Average and the Standard & Poor’s 500 Index. It has been traded on the NYSE since April 19, 1984. According to CNN Business, its top shareholders include the Vanguard Group (8.66%), BlackRock Fund Advisors (4.54%), SSgA Funds Management, Inc. (4.44%), Capital Research & Management Co. (3.91%), and Geode Capital Management LLC (1.69%).
“To provide the highest level of service, the broadest selection of products, and the most competitive prices”.
Home Depot makes most of its money through sales of home improvement goods and related services. Let’s take a closer look.
Home Depot sells a wide range of building materials, decorative products, home improvement goods, garden and lawn products, etc. Home Depot generates massive revenue from the sales of these products. Home Depot sells its products to Do-It-Yourself customers, Do-It-For-Me customers, and professionals.
Home Depot offers professional services to its customers through its vast network of professional contractors, tradesmen, remodelers, and small business owners that assist its customers. They help customers to handle small and complicated home improvement projects. Home Depots receive a commission from these service providers for the job they do.
Home Depot offers a buy now, pay later scheme through third-party providers for consumers and businesses. Home Depot earns revenue from charges for these credit services.
The Home Depot Business Model can be explained in the following business model canvas:
Home Depot’s Customer Segments comprise:
Home Depot’s value propositions consist of:
Home Depot’s channels consist of:
Home Depot’s customer relationships consist of:
Home Depot’s revenue stream consists of:
Home Depot’s key resources consist of:
Home Depot’s key activities consist of:
Home Depot’s key partners consist of:
Home Depot’s cost structure consist of:
Below is a detailed SWOT analysis of Home Depot:
-> Read More About Home Depot’s SWOT Analysis
Home Depot has revolutionized the home improvement sector by cultivating a strong do-it-yourself and professional marketplace. Its success can be attributed to its huge catalog of product offerings, excellent customer service, and competitive prices. They have come a long way since it was founded by Marcus and Blank. They have conquered the North American market, but continue to lag in their ability to penetrate emerging markets in Asia and other parts of the world.
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Was very informative!