ipl-logo

Pest Analysis: Home Depot's Macroeconomic Factors

924 Words4 Pages

Home Depot’s PEST Analysis There are many macroeconomic factors that impact the performance of an organization. An organization needs to carefully analyze the external macroeconomic factors with the strategic analytical tool called PEST. The PEST tool analyzes the political, economic, social and technological factors of the external environment which may impact with opportunities and threats to the organization. In other words, the PEST analytical tool helps to assess the macroeconomic factors in relation to the organization’s success. In this essay, I am going to identify key external forces such as political, economic, and technological that might influence in the success of Home Depot (HD). The political factors that might impact HD are …show more content…

The organization depends on the economic stability of the country. When unemployment is low, HD can benefit from this positive environment because people have more buying power and purchase more homes. When there is more demand for homes, HD increases its sales and makes more profit. However, in the 2008 real estate crash, purchasing power was less and many people couldn’t afford to buy houses or even to rent. Home Depot was negatively affected because people were prioritizing other essential things than buying home repair products or services. Unemployment and real estate can impact the organization’s success. When the unemployment is low, people have more purchasing power and can afford to pay mortgages, down payment and credit (Frue, …show more content…

Home Depot depends on the middle class and millennial’s ability to buy their products. However, the middle class has been greatly affected by the rising wealth gap and the millennial are not buying enough homes (Ferguson, 2017). One of the reasons why millennials have low purchasing power is because there aren’t enough credits available for them. Moreover, this segment group is increasingly demanding for higher quality products at lesser cost. In this sense, Home Depot could offer this demographic group high quality and more durable products. The technological factors that can impact HD are the automation and mobile technology (Ferguson, 2017). These factors could be seen as opportunities for the organization because automation can increase productivity and efficiency. The rising use of mobile technology gives the organization a unique opportunity to capture more consumers such as the millennials. The younger generations hardly go to a physical store to purchase anything, they prefer to procure online and request home

Show More
Related
383 Words | 2 Pages

Lowe’s has two different design layouts for their stores. One of their layouts that cater more to the larger metropolitan markets while the other layout is smaller an intended more remote location areas. The sizing of the store depends on which area and group that they are trying to reach. Stores that are owned by Home Depot stock product quantity amounts from 35,000 to 45,000 in a year for their stores (encyclopedia.com, 2017.)These products include power tools, painting materials, plumbing materials, electrical materials, appliances, gardening materials, landscaping items, and more. On the contrary, Lowes has a large number additional products in their store that include home décor items, home repair materials, home maintenance, and more that can be specially ordered (encyclopedia.com,

Read More
1214 Words | 5 Pages

However with few exceptions, The Home Depot outperforms Lowe’s considerably. Lowe’s did outperform The Home Depot in revenue growth this most recent quarter, but this is just a snapshot when in reality both The Home Depot and Lowe’s have been experiencing very similar growth for years. Next is Earnings/Share, The Home Depot is earns over two times more than Lowe’s for one dollar of share price. Key differences can be found in profit margins, debt vs equity, and return on equity. The Home Depot has a considerably higher profit margin when compared to the margin of Lowe’s, and is much better at turning invested capital into equity.

Read More
1511 Words | 7 Pages

If cuts are made or political actions shift, it can directly affect Home Depot. Incalculable spending by the government can affect Home Depot because they are one segment of their targeted consumer. Economic Factors: Millennials have been deemed as Home Depot's saving grace. Millennials make up the largest percentage of the population. And if they couldn’t buy houses, it’s a risk to Home Depot’s stability.

Read More
676 Words | 3 Pages

Lowes Companies, Inc. The Home Depot, Inc. Menard, Inc. Open more stores Open more stores Slowly controlled growth Target women Target DIY Target DIY, customer centric Centralized distribution Increase regional distribution centers Hub-and-spoke distribution system Better store appeal Improve supply chain and merchandizing tools.

Read More
775 Words | 4 Pages

Home Depot is expanding rapidly within the USA but not internationally. Even though it has opened some stores in Canada and Mexico, 90% of the market is located in the USA (Dalavagas, 2015). The other weakness for Home Depot is the legal issues. Over the years HD has had many class action lawsuits. For example, in 2015, the company paid 1.8 million settlements for violating the Credit Reporting Act (LaFreniere, 2016).

Read More
444 Words | 2 Pages

Home Depot is a multi-million dollar industry, with over 2,000 stores around the world. They supply contractors with tools and products to build a house or supply Do-It-Yourselfers with home and business improvements. But with all the good Home Depot has done, they have their faults too. Home Depot has faced job cuts, ethical violations and the mistreatment of their customers. When a person hears job cuts, they assume that the reason for the job cuts is downsizing.

Read More
300 Words | 2 Pages

At B & B Pest Control, we serve the residents of New Orleans, LA, Belle Chase, LA, Covington, LA and surrounding areas for all of their pest control needs. We are the exterminator to call for everything from rodent control to termite control. We help you get back control of your home. Pests such as bed bugs, termites and rats have no business living inside your home. They don 't pay the mortgage, they don 't help with the bills.

Read More
2674 Words | 11 Pages

Political factors, like changing government, political leaders and political issue directly

Read More
1581 Words | 7 Pages

In this article written by Joseph Bower and Clayton Christensen discuss disruptive technologies and why large corporations lose to smaller emerging companies and their technologies. Additionally, they examine the risk of solely listening to their customers or consumers, and finally how to spot a disruptive technology versus sustaining technology. In the article Bower & Christensen use many examples from different industries to explain disruptive technologies. The one most prominently discussed is the hard disk drive, so I will be using that mostly for my examples illustrated in this review. I believe the reason they use the hard disk industry almost exclusively in their research is because it is a tenured industry that is very fast paced and

Read More
1745 Words | 7 Pages

Marketing Principle Marketing is characterized as "the aggregate of exercises required in the exchange of merchandise from the maker or dealer to the purchaser or purchaser, including promoting, sending, storing, and offering. A substitute definition is reworded from memory of an initial business content is: Marketing is all exercises directed to get ready for deals. Sales is all exercises required to finalize the negotiations. Delivery and consumer loyalty would be incorporated into deals to dodge the client from turning around or unclosing the arrangement.

Read More
989 Words | 4 Pages

Walmart has succeeded in achieving the leading position in the retail industry. Walmart now stands as the biggest retailer in the world. However, the external factors constitute pressure on the company that must be address carefully. By analyzing the five forces of external factors we will define the nature and power of our rival power in the market. The five factors are competitors from rival, potential new entrants, substitute products, supplier bargaining power and customer bargaining power all of these competitive forces affecting Walmart position.

Read More
1333 Words | 6 Pages

PEST analysis is a model that uses environmental scanning to analyze the four factors, such as political, economic, social-cultural and technological. PEST analysis is a part of external analysis when making market research, giving the company an overview of the different factors in the overall environment. This strategy tool can also effectively understand the growth or decline of the market, the business situation, potential and operational direction. Political factor include government type and stability, freedom of press, rule of law, Bureaucracy, Corruption, environmental controls, trade restrictions, tariffs and likely political change. Economic factors include business cycle stage, economic growth, interest rates, exchange rates and

Read More
885 Words | 4 Pages

PESTEL analysis is a tool that is used to analyse an organisation’s macro-environment. Political Environment The incident of 9/11 has affected the airline industry adversely. The number of tourists to different countries has immensely decreased due to the fear of safety and security issues. On the other hand countries have put measures in place such as strict visa policies and border controls in an effort to combat terrorism attacks.

Read More
901 Words | 4 Pages

Introduction Forever 21 is a clothing brand that is based in many countries. Most people would be very familiar with the brand as it caters to them in terms of a fashion retailer. The country that will be in this report would be in Singapore and the purpose of the report is to perform an environmental analysis on a company. The structure would be an introduction, followed by company background, country background, PESTEL analysis, porter’s 5 forces, strategic recommendations and conclusion.

Read More
901 Words | 4 Pages

PESTEL ANALYSIS Pestel is a strategic analysis tool used by organizations to scan the macro-environment in which they operates, helps to identify external factors that can affect the organization's business activities and performance (Gockeln 2014). Macro-environmental factors are those that affect clothing industry and the industry have no control over rather than adapting to it. By so doing, it gives ability to differentiate themselves from potential competitors and sustain performance. Table 2 depicted, (PESTEL) Political, Economic, Social/ Cultural, Technological, Environmental and Legal external factors. Political factors: these are examined from the political stability point of view, which covers government policy intervention in the economy, deregulation, taxation changes, as well as the attitude of political parties on the government policy.

Read More

More about Pest Analysis: Home Depot's Macroeconomic Factors

Related Topics

Open Document