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Home Depot Case Solution & Answer

Company Background

Home Depot was founded by Bernie Marcus and Arthur Blank in the year 1979, it gradually became one of the finest and impressive retail stores in the United States of America. The retail store started operating in Atlanta, Georgia and offered product and services in the home improvement and construction. The company changed the landscape of the home improvement industry in no time and almost revolutionized the do-it-yourself method in the industry. The company started with no frills warehouses which helped the company grew significantly and respond to the changes in the industry efficiently.

The company started to expand in terms of product and penetrated in the US market with a portfolio that seems attractive. The company’s portfolio accounts around 50,000 products with different features and brands but also accommodates the brands of Home Depot as well. The company did not rely on penetration and product development, but also emphasized on the market development as well. Currently the company resides in four countries that include, US, PuertoRico, Mexico and Canada and is also planning for further expansion globally.

Home Depot Case Solution & Answer

The total number of outlets that the company has in these global locations are around 22,000 which is a significant number and is expected to increase with the passage of time. The company has been listed on the New York Stock Exchange and has been one of the growing retail chains across the US with total revenue is more than $83 million. The financial position of the company is quite strong and one of the major contributors towards the impressive growth the company attained in all these years.

Objectives

As the company is aiming to expand its horizons and expand globally, one of the most attractive locations for the company to expand is Nicaragua. The aim of the company is to exploit the opportunities available in Nicaragua as the Nicaraguan Canal is on the verge of construction which opens a variety of opportunities for the company to exploit. The reason the company has chosen to expand in Nicaragua is due to the opportunities available there and also the accessibility of the company since Nicaragua is closer to Mexico. The company needs to assess the opportunity and come up with a proper plan of entry covering all the aspects.

SWOT Analysis

This portion will analyze the internal and external activities of the companies which will cover the strengths and weaknesses of the company along with the strengths and opportunities present for it.

Strengths

The company’s major strengths lie in its ability to lead the market as the company is the market leader in the home improvement equipment retail industry. Adding more to the strengths of the company is the financial position of the company with profits growing rapidly. The company has been able to sustain in a highly competitive US market, but it clearly enjoys the position of the market leader in markets like Canada and Mexico. Furthermore, the brand name is well established which is a major advantage and strength of the company which is clearly supported by another strength that states the business model of the company.

Being a global player the brand equity is also very high for the company and the product offerings are also vast which support the extensive growth of the company. Moreover, the company has a major strength in the form of research and development unit which is translated in their Rapid Deployment Centers. The opening of these centers support the supply chain and offer potential to enhance the supply chain network of the company adding another strength in the curtail. Besides that, the marketing strategies are also among the strengths of the company along with the cost leadership strategy followed by the company.

Weaknesses

Although the company has achieved rapid growth, but one weaknesshas always surrounded the company includes lack of innovation. The company did not emphasize on bringing innovation to the products and services offered by the company. This resulted in the decline in sales, which is why the sales of the company are always fluctuating. The company has grown rapidly, butfailed to capitalize on the economies of scales due to immense focus towards their market saturation strategy. On the other hand, the company has been offering the same set of products which has created difficulty in creating product recalls. The company has been at the stage of maturity and did not try to expand on product offerings and targeting new segments…………………….

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