The Home Depot

Résumé du document

Home Depot's presentation
Home Depot's strategy under Nardelli as CEO

Ralph V. Whitworth
His background
His vision
His strategy

The impact of Whitworth's strategy on Home Depot business
Impact on the management
Impact on figures

Extraits

[...] Fichier:TheHomeDepot logo.svglogo Process follow when they invest Establishement of a stake in a company They sent a letter to the company's board with proposal of changing to improve performance and shareholder return. If they accept, they kept a more important stake and persuade the management to change their methods. If the company refused they make the proposal public, and they invested when the company declines. Fichier:TheHomeDepot logo.svglogo Home Depot's business environment had changed since mid 90's due to greater competition, lower projected earnings and revenue growth. The stock price was stagnating because of the error of Nardelli's growth strategy and it decreased the investor confidence. [...]

[...] After joining Mesa Petroleum founded by T. PICKENS, he became interest in revitalizing underperforming companies and improving corporate governance. During 8 years Whitworth was the director of United shareholders association, an association create by Pickens to defend the interest in shareholder rights. It was a lobbying group, which proposal for example a greater board independence. In 1993 they were members, mainly individual investors. Fichier:TheHomeDepot logo.svglogo Relational Investors Create in 1996 by Whitworth and Batchelder they had $ 7.1 billion under management. [...]

[...] Their strategy : Build home-improvement wharehouses, larger than any of their competitors' facilities Fichier:TheHomeDepot logo.svglogo Some figures : Home Depot it's about 2,248 stores, the most part across the United States and Canada, and the other part in China and Mexico Employees in 2008 : 355,000 Market Capitalization : 44,94 Billions $ Fichier:TheHomeDepot logo.svglogo Who is Nardelli ? Prior to become the CEO and CFO of Home Depot, he was one of the top four executives at General Electric company. He got a Bachelor degree in science from the western university of Illinois, and then a MBA from the university of Louisville. [...]

[...] In an American Customer satisfaction Index, Home Depot was the last among 15 US major companies, well behind is main competitor Lowe's. Between 2000 to 2006 the Lowe's tock price has jumped from $11 to $31 when in the same time HD stock price had fallen from $44 to $40. Fichier:TheHomeDepot logo.svglogo 4 proposals: Focus on the core retail business and exit wholesale supply Make efforts on the core business to recapture the old customer of Home Depot. Established a strategic plan in the allocation of the capital and return cash to the shareholders if the retail business have been maximized. [...]

[...] Fichier:TheHomeDepot logo.svglogo < number > Whitworth believed that the best way to change a company is to take a stake and and try to change it from inside. Pickens is a corporate raider. He has a strategy of publicized takeovers, to buy shares and diffuse to public changes in control to raise the value of the shares. Fichier:TheHomeDepot logo.svglogo Yes : Because even if he succeeded in his objectives, he had a really short term vision and he don't hesitate to damaged the company to achieve his goals. [...]