1. Provide a detailed analysis of the firm’s general environment in China. Highlight the economic segment, demographic segment, political/legal segment, and sociocultural segment.
As of 2005, China’s economy was the second largest in terms of GDP. The people purchasing parity (PPP) GDP was $9.412 trillion while nominal GDP stood at $2.25 trillion. In the same year, the GDP growth rate was 9.8% whereas the home improvement market was worth $50 billion in sales with a growth rate of 12%. Following tight monetary policies, the inflation rate for China has remained at 8.9 % since 2001. Besides, there was $637.42 billion worth of property being constructed and this made up 28% of the country’s GDP in 2005. Considering these estimates and the expected …show more content…
Perform an internal analysis to identify Home Depot’s strengths and weaknesses.
Strengths
One of the key strengths of Home Depot is its strong leadership position. The company is the world’s largest home improvement retailer with more than 2,100 stores in U.S., Canada, Mexico and China. The company is also a leader in cost saving and efficiency strategies that enabled the company to increase its sales to $81.5 billion in 2005 from $45.7 billion five years earlier.
Home Depot also has a highly diversified product range that includes up to 50,000 different types of home improvement products such as building supplies, lawn and garden items. There are also more than 25,000 different products that customers can get through special order.
Home Depot has is a rich supplier network that brings together up to 12,000 suppliers. Besides, the company has a Cognos 8 software system that brings together and condenses data from orders and contract terms. This information helps in rating each supplier and this provides an opportunity for suppliers to improve in …show more content…
Home Depot gets its supplies directly from suppliers and this eliminates the distribution system. This warehousing system enables the company to leverage space and avail all the available products to the customers.
Weaknesses
One of the key weaknesses of Home Depot is its corporate culture. The former CEO, Nardelli, introduced a centralized military style management structure. While this structure streamlined operations, it eliminated autonomy and created an environment of distrust and fear amongst company executives and other employees. As a result many full-time employees lost their jobs because they were underperforming.
Another weakness is the efficiency strategy that led to most of the full-time employees being eliminated in favour of part time employees. This resulted in a volatile corporate culture characterized with highly dissatisfied, overworked, resentful and poorly motivated employees.
Another big drawback of Home Depot was its increased focus on wholesale while ignoring the retail sector. As a result, the retail stores were mostly served by a few part time employees who lacked the appropriate training. Besides, most of these underserved retail stores were unclean, disorganized and lacked customer services and this made Home Depot to lose a good number of its retail
As of 2005, China’s economy was the second largest in terms of GDP. The people purchasing parity (PPP) GDP was $9.412 trillion while nominal GDP stood at $2.25 trillion. In the same year, the GDP growth rate was 9.8% whereas the home improvement market was worth $50 billion in sales with a growth rate of 12%. Following tight monetary policies, the inflation rate for China has remained at 8.9 % since 2001. Besides, there was $637.42 billion worth of property being constructed and this made up 28% of the country’s GDP in 2005. Considering these estimates and the expected …show more content…
Perform an internal analysis to identify Home Depot’s strengths and weaknesses.
Strengths
One of the key strengths of Home Depot is its strong leadership position. The company is the world’s largest home improvement retailer with more than 2,100 stores in U.S., Canada, Mexico and China. The company is also a leader in cost saving and efficiency strategies that enabled the company to increase its sales to $81.5 billion in 2005 from $45.7 billion five years earlier.
Home Depot also has a highly diversified product range that includes up to 50,000 different types of home improvement products such as building supplies, lawn and garden items. There are also more than 25,000 different products that customers can get through special order.
Home Depot has is a rich supplier network that brings together up to 12,000 suppliers. Besides, the company has a Cognos 8 software system that brings together and condenses data from orders and contract terms. This information helps in rating each supplier and this provides an opportunity for suppliers to improve in …show more content…
Home Depot gets its supplies directly from suppliers and this eliminates the distribution system. This warehousing system enables the company to leverage space and avail all the available products to the customers.
Weaknesses
One of the key weaknesses of Home Depot is its corporate culture. The former CEO, Nardelli, introduced a centralized military style management structure. While this structure streamlined operations, it eliminated autonomy and created an environment of distrust and fear amongst company executives and other employees. As a result many full-time employees lost their jobs because they were underperforming.
Another weakness is the efficiency strategy that led to most of the full-time employees being eliminated in favour of part time employees. This resulted in a volatile corporate culture characterized with highly dissatisfied, overworked, resentful and poorly motivated employees.
Another big drawback of Home Depot was its increased focus on wholesale while ignoring the retail sector. As a result, the retail stores were mostly served by a few part time employees who lacked the appropriate training. Besides, most of these underserved retail stores were unclean, disorganized and lacked customer services and this made Home Depot to lose a good number of its retail