CNBC Home Depot - Big 3 interviews...

Discussion in 'Economics' started by syswizard, Dec 14, 2011.

  1. Very impressive IMHO. Bernie Marcus, Ken Langone, and most of all Arthur Blank. These guys were something....I especially was amazed when I heard Art say "we didn't care about the bottomline at first"....we were just concerned about the customers and associates. Making sure the associates knew what they were doing, and that the customer was getting what they needed. That was it.
    How simple can that be ?
    Ok, Ok...again, the hardware/home improvement business with the mom and pops was HORRENDOUS back then. Hit and miss...never knew if they had what you wanted....incredible amounts of wasted time, etc. Poor quality abounded. Returns ? What returns ? If you bot it, you OWNED it, whether it worked well or not.

    What other businesses today exhibit that same characteristic ripe for being "home depoted" ??
    Anyone ?
    vanzandt likes this.
  2. No one ?
    No comments ? no criticism ? (always present on this board !)
  3. U.S. Government?
  4. Anything having to do with health care. Put it all under one roof similar to an "assembly line". :cool:
  5. -----------------------------------------------------------------------------------
    That may be true for you today but i lived in an area and time where MOM and POPs (mostly pops) hardware stores knew more about plumbing, electric, roofing than any of todays big box enployees .Returning anything was never a problem when i started out in business
    Latter when i started building houses the small lumber yards
    were a timesaving service that never was replicated by H.D
    or Low's.
    I see contractors today spending mornings in Home depo
    loading materials and other time consuming chores .
    Theire savings in materials are offset by this time consumption
    and scaling up for them is near inpossible
  6. So what I am hearing in this thread:

    1) Basically.... Home Depot via "deep pockets" was able to secure a purchasing advantage that enabled them to sell at a lower price than existing small competitors. As they grew, this was transformed into a form of extortion as suppliers risked going out of business if they lost a contract with the home depot, their only customer. They were practically forced to accept Home Depot's terms and conditions...which guaranteed favorable gross margins.

    2) This advantage eroded the sales for the mom and pop's, especially in the area of standard household materials and appliances. Small hardware stores anywhere within 10 miles of a Home Depot quickly went out of business.

    3) Home Depot, by providing so many SKU's in one location, effectively made home improvement shopping more efficient for the consumer. One stop shopping was in huge demand as gasoline prices and cost of car repairs skyrocketed.

    And lest we have forgotten: after eliminating competitors, prices were raised, and this immediately went to the bottom line. Cash coffers grew so rapidly that Home Depot could afford $200 million pay packages to less-than-stellar former CEOs.

    Didn't any of you guys go to business school ?
  7. 1) HD benefited a lot from the building boom of the 1990's until 2007. That environment probably will not happen again for atleast 20 years. :cool:
    2) A mediocre CEO can appear to be "competent" during a bull market. :p
  8. Sshhhhhh. Don't tell Jack Welsh that !
    Jack's great .... just ask him.
    (All bow down, all bow down.....)
  9. nor Warren Buffett and Bill Gates. :)
  10. Oh, the egos !
    #10     Dec 15, 2011