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
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).
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.
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.
Business level strategies differentiates each from one another due to corporate leadership: However, they are also very much alike concerning the functional level strategies. All three strive for better customer service, and all three seek to provide low cost value to the consumer. What does set them apart is how they serve their customers. Lowes’ target market tailors more towards females to increase sales, Home Depot targets both commercial and residential customers, and Menards targets the entire family by providing houseware as well as building materials and groceries. One key difference between the three companies is that Menards believes they can better serve their customers by remaining a private company versus going
Even though Tesco largely support British jobs and expertise by consistently encouraging UK branded supplies but it has recognized the need for products from abroad and thus have started working with many different suppliers of different region and ethnicity. For example, “Tesco cooperates with 1500 Polish suppliers and a number of shopping mall’s tenants. Tesco promotes polish producers and local economy.” PESTLE Analysis To get a better understanding of the external environmental factors, the PESTLE analysis is presented below: Political Factors
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
Political factors, like changing government, political leaders and political issue directly
Their philosophy of customer service – “whatever it takes” – means cultivating a relationship with customers rather than merely completing a transaction. As one of the CEO stated in article, “at the end of the day, we’re in the people business” (The Home Depot, 2016). I feel that Home Depot, does and it does not fit into the corporate level strategy. I see the low-price come out a little more in the marketing strategy.
The household manufacturing industry is a competitive one and has all the major corporations that are involved in them. All of the other companies have the various pressures that they get from the rivals as they all want
Contents Page Page 1. Introduction 2 2. PESTLE 3 2.1 Political 4 2.2 Economic 4 2.3 Social 4 2.4 Technological 5 2.5 Environment 2.6 Legal 3. Porter’s Five Forces 3.1 Competitive Rivalry 3.2 Threat of New Entrants 3.3 Threat of Substitutes 3.4 Bargaining Power of Suppliers 3.5 Bargaining Power of Customers 4.
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
Residential Pest Control Ecopest provides residential pest control services and is the name you can trust to deal with any kind of pest problems. We guarantee our residential pest control service is fast and effective and offers the highest level of safety for your family, friends, pets, and the environment. Drawing from over 14 years of experience in pest control, we specialize in pest control services designed to be safer for those you care about. In addition, we offer several services in order to keep your home pest free and at a Fair, Budget Friendly Price.
Internet Assignment Anyikor Acuil MKGT-6609 Best Buy With internet boomed which led to growing of Electronics Consumption, Best Buy have to has continually sought ways to stay connected by concentrating on what it can do well and keep the customer experience at the vanguard. Four years ago, best was predicted to go out of business; has held up own against it competitors like Amazon. Moreover, the Best Buy sees the growing difficulty of tech and interconnection of electronic devices consumers used, gives his organization a brilliant opportunity to demonstrate its helpfulness to purchasers as Best Buy hopes to come back to development.
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.
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.