In an effort to make up for business lost amid a cooling housing market, Home Depot is taking a big step to diversify. It's adding new products and services outside of its traditional home-improvement market. At various retail locations across the country, customers are starting to see candy bars and sodas at checkout, special room in the aisles for seasonal decorations, and even parking-lot convenience stores that sell gasoline and car washes.
The new strategy goes against the gospel of Home Depot’s founders, who were adamant on keeping a singular focus on home-improvement related wares. Nonetheless, CEO Bob Nardelli sees this as a necessary step to keep its retail division afloat during a housing slump, and he isn’t afraid to invest some $350 million to makeover 500 stores, according to the New York Times.
Home Depot could go the way of Starbucks, which has been successful hawking music at its coffee shops. But it will likely take some time for the new strategy to kick in. Even giants like Google have had a hard time getting new products and services to be wildly successful. The Web services firm still gets almost all revenue from its online ad business.
Do you think the home-improvement giant will successfully diversify the company’s revenue streams, or is it just watering down the brand of the No. 2 retailer in America (second to Wal-Mart) by straying from its original mission?
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