In the year 2006, the performance of the company was quite satisfactory in terms of revenue generated, return on investment, market share and profitability. In 2005, the total revenue of the company was $81.5 billion with an operating margin of 11.5 percent. Growth had been…
The primary objective of the company had been to make a holistic improvement and incorporate everybody in this innovative drive.
The company nurtured a corporate objective to occupy the leadership position in the home improvement retail global market. The business strategy aimed to diversify the business and to open new stores whereas the functional strategy attempted to provide better service. However the management failed to achieve the objective within the allotted timeframe.
In 2006, the company framed a new strategy that was comprised of 3E’s; “enhancing the core” by improving the quality of products and services offered, “expanding the business” by entering different business operations and “expanding the market” by opening new stores in US as well as in the international market. None of these strategies were consistent with the mission, strategy and objective that were adopted by the company. This led to the non alignment of the internal as well as external environment.
The company then adopted a policy that would improve store productivity, increase acquisitions and mergers, diversify the product and services offered to the clients, and open new stores. In reality, the company failed to implement its policies in all the occasions because they were not aligned with the mission, strategy and objectives.
At present, the company has planned its mission, objectives, strategy and policies to achieve higher growth in the services provided by it. However the direct-to-consumer section contributes very little in the revenue portfolio of sales. The current policy is to open stores in 1500 locations. But the market in US is already saturated and the company managed to open only a few stores in the last 5 years.
As on May 25, 2006, the company had 11 people in the board out of which 9 were independent. Hence majority of the board members were from external sources (as they belonged ...
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