Analyses
Internal Analysis
Home Depot posse’s superior corporate values and currently have a strong market position being the fourth biggest detailer in the world. Internally I feel that they have a lot of aspects working in their favor leading them towards being the successful company that they are. They demonstrate strong corporate governance, are persistently growing both within the United States and globally, and are demonstrating effective and efficient corporate and business strategies. After reading recent news regarding Home Depot and the extensive research that was conducted, I didn’t find anything alarming within their internal practices. The leadership within the company all demonstrate to aligned with one another keeping the stakeholders in mind. All these factors are contributing and are reflected in the financial success of Home Depot. If they continue to remain aligned with one another and stay dedicated towards having effective internal practices, I strongly feel that Home Depot will continue to grow as a company as well as their shareholder value.
External Analysis
Over the last few years, Home Depot was facing many negative external factors. The biggest external factor that Home Depot was affected by was the decline in the economy and the collapse of the housing market. As a result of the collapse of the housing market, as many people weren’t buying homes which resulted in less people renovating their homes and making other home improvements. This factor obviously impacted Home Depot’s sales and revenues, but since they had strong market share and are an overall effective company, they were able to survive this external factor. Now that the economy is improving, it reversed to become a positive external factor. Home Depot is now experiencing an increase in revenue each year. Their revenue increase 13.9 percent from quarter 4 in 2011 to quarter 4 in 2012. Considering home improvement retail industry environment, Home Depot has what it takes to continually dominate the market even though some consider Lowes somewhat of a threat. When considering the product advancements that exclusively are offered at Home Depot and their strong strategic alliances, I feel that the only threatening external factor will continually be our economy.