Problem:
One of the major changes that might be expected to impact Home Depot industry and operating environments in the next 10 years, is the rapid expansion that is occurring in house sales and new house buildings in the United States. This boom in house constructions and sales will definitely continue for the coming years since interest rates are still considered attractive to get a house loan. This boom will serve to increase the sales of Home Depot and enhance its position as the world's largest home improvement specialty retailer.
There are a few long-term objectives that Home Depot wants to achieve. Chairman, President & CEO Bob Nardelli and his team have plans for the coming fiscal year and a company's growth vision for 2010.
According to the Webbot website Nardelli mentions that "Over the next five years, The Home Depot expects to maintain and grow its leadership position in home improvement retail worldwide". He also says "At the same time, we expect to become the nation's largest diversified wholesale distributor, become number one in services and will dramatically increase our direct-to-consumer channels. Our 2006 initiatives demonstrate that we are well on our way to accomplishing our 2010 goals."
The company long-term objectives are
a) Annual sales growth of 9-12 percent.
b) EPS (earnings per share) growth of 10-14 percent.
c) Opening new 400-500 stores from now till the year 2010 (which should increase the revenues by $4-8 billion.
d) Store organization and continuous product innovation and an increased brand selection.
e) Expanding into new markets by growing internationally, and increasing market penetration in both Mexico and Canada.
f) One long term goal is the acquisition of "Hughes Supply" by Home Depot. This should add to Home Depot Supply's strong positions in waterworks, non-industrial facility maintenance, professional supply and plumbing, while also adding new growth platforms like utilities, industrial pipes, valves and fittings, and electrical distribution.