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HOME DEPOT COMPANY Case Solution & Answer

HOME DEPOT COMPANY

PESTLE Analysis

The external analysis of the Home Depot Company are as following; (Shafarin, 2015)

Political

The United States is a large market for Home Depot and the company is heavily focused on that market. The country’s economy and workforce talent availability can be influenced by political factors, which in turn may negatively affect the company’s revenues. For this reason, the company analyzes the level of immigration and what kind of policies are in place in the United States to encourage immigration. Depending on these factors, the company can better predict which economic sectors are likely to be affected by government policy and spending. A rising wealth gap has reduced the middle class, which is Home Depot’s core market. Because of this, consumers are choosing more durable goods to avoid low quality imported items. This means that the company will have to offer better quality goods and services to remain competitive. While the company has always had good growth records, it is not immune to these issues. Its competitors have taken advantage of these circumstances to make their products better.

Economical

The market trends are one of the most important factors that affect the growth of a company, and Home Depot is no exception. With increasing income levels in the United States and a slow but steady recovery in the housing market, the demand for home improvement products will continue to increase. However, the cost of capital in the country will continue to rise, which will hinder the company’s ability to expand. Despite the challenges, the economic outlook for Home Depot is bright. (Shafarin, 2015)

Social

Home Depot should analyze the power structure in society, as this will affect demand for its products. In addition, it must study the attitudes of people toward immigration and their perceptions of this group. For example, the US has an older population than China, so older people need less expensive products. Furthermore, the aging population is largely dependent on technology and waste management. Further, the US government has recently imposed stricter norms aimed at urban environments. The company is heavily focused in the U.S. and Mexico. These markets are key to the success of the company, but they also affect the company’s revenues. In the United States, the influence of the government in the business is important. The government is able to affect the level of consumer demand. For example, a company’s profits depend on its brand image.

Technological

The Home Depot has long been the leader in the home improvement market, and its success has been based on its commitment to protecting its unique brand image and proposing low-cost products. As the home repair industry becomes increasingly competitive, a retailer like Home Depot is the frontrunner in innovative technology and product development. Besides the technological advancements, Home Depot has built a strong culture of customer loyalty and morale among its employees.

Legal

There are many legal forces affecting Home Depot. These include increased competition, high taxes, and corporate expenses. The major changes came towards the end of the 1990s, when the European market became more competitive. This resulted in a period of reassessment for Home Depot. As a national company, these changes have a great impact on the company.

Environmental

The growing wealth gap in the US has eroded the middle class and shifted the dynamics of the relative cost advantage dynamics. This has resulted in a decline in the market share of companies like Home Depot that cater to this segment. Consumers are increasingly opting for more durable goods from local manufacturers and have become wary of imported items. The company has to take measures to provide better quality and durable goods. The government’s environmental policy is also an important factor. It affects how well the company does in implementing sustainable business practices. The government is increasingly requiring businesses to adopt standards of health and safety. Many countries are increasingly enforcing stricter standards, and this can result in higher costs for a company. Furthermore, these laws often impact the cost structure of production.

Current trends

Market share battle

Interestingly, with Lowe, The chain indented a 21% increment on that measurement in monetary 2020, contrasted with Lowe’s 26% spike.

Prices and profits

Home Depot’s benefit stayed unchallenged in the previous year, with working edge holding at around 14% contrasted with Lowe’s 11%.

Source: The motley fool

Major competitors

During the past few years, the home improvement sector has grown to record levels. This is due in part to the rise in home values, which have led homeowners to buy more expensive products. Compared to other retailers, spending on home improvements has nearly doubled. While this is great news for consumers, it also means that the home improvement sector is highly competitive. As a result, companies in the industry have been experiencing growth in recent years. One such retailer is Amazon. This company operates over 1,834 retail locations in the United States and specializes in selling discounted products. It offers consumers a variety of items, including household appliances, furniture, and building materials. Its online interface is simple to use and allows users to place orders quickly and easily. Customers can track their orders through their website, and return any unwanted items. This is why it’s a great home improvement competitor.

Ace Hardware is a leading home improvement company. It opened its first warehouse in 1924 and has more than five hundred locations in more than 70 countries. Its extensive distribution network has expanded to include offices and service centers outside the country. Currently, it is the third largest competitor of Home Depot, and it is the third largest retailer in the world. Although it’s not the only company that is growing internationally, it’s certainly the most profitable. (Bianchi, 2004)

Home Depot competitors

Competitive Strategy

Regardless of the competitive environment, Home Depot remains a strong brand in the market, offering superior customer service and lower prices than its rivals. The company has also made investments in its infrastructure and customer experience, and its international expansion strategy has enabled it to reach a broader market than its competitors. The company relies on high-quality customer service to remain competitive. This has led to an increase in online sales. In addition to offering competitive prices, Home Depot also offers many promotions and incentives to keep customers happy. This strategy has made it one of the top players in the industry. Despite its growth in the home improvement industry, it has continued to grow its business. The company invests in training staff members to be brand ambassadors, and focuses on the customer experience. Moreover, the company promotes the availability of products on its website and in its stores, and trains them to be helpful to the customers. (Darrow, 1994)

Inference

Home Depot is a chain of stores that sells a wide variety of tools and home improvement products. The company’s headquarters are in Atlanta, Georgia, and it serves customers throughout the United States. Founded in 1974, TheHomeDepot.com has over one million customers. The home improvement retailer has over 1,200 locations in the United States. Its website is the largest home improvement retailer in the country, and it has more than two million employees. Regardless of the competitive environment, Home Depot remains a strong brand in the market, offering superior customer service and lower prices than its rivals…..

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