Home Depot, Inc.: SWOT Analysis: Home Depot
This paper explores Home Depot SWOT analysis. The company overview was briefly examined in the context of home improvement products. Financial performance, multi-channel selling and multiple categories are the company’s major strengths, whereas debt and inventory turnover ratio remain major areas of concern. In the future, stringent regulations, expansion by the competitor and foreign exchange risks could affect the business performance. However, expanding the retail market in the US, expanding e-commerce industry in the US, and focus on a customer-centric business model are likely to offer growth opportunities to the company. Keywords: Home Depot, SWOT Analysis.
The Company Overview
The Home Depot, Inc. (Home Depot) is the retailer of home …show more content…
AS of January 2017, it operated a total of 2,278 retail stores, which included 1,977 Home Depot stores in the US including the Commonwealth of Puerto Rico and the territories of the US Virgin Islands and Gaum, 182 stores in Canada, and 119 stores in Mexico. Home Depot’s online platforms efficiently support its physical stores. Its online channels sales increased by 19.3% in FY2017 as compared to FY2016 and accounted for 5.9% of its total sales during the review year.
Weakness – Debt: In FY2017, total long - term debt increased by 7.5%, whereas total revenue increased by 6.9% for the same period. This increase in debt levels indicates that Home Depot could incur higher interest expense in the future, which would affect its profitability. In FY2017, it reported an interest expense of US$972 million an increase of 5.8% over the previous year. The company’s business operations could be affected if it is incapable to make adequate cash flow for high debt servicing. It also might become difficult for the company to raise funds from the debt market at favorable