Assess the risks. opportunities, and threats, in terms of political, legal, and economic efforts within the context of Home Depot of entering into the UK market. Please use APA style and use and cite references. This is an International management class and the focus on the question is part of an entry strategy for Home Depot. Please identify and asses the risks above that would occur in the U.K. for Home depot. Generic risks are needed but ones specific to UK market is paramount.© BrainMass Inc. brainmass.com October 25, 2018, 8:09 am ad1c9bdddf
Home Depot Entering the UK Market
In 2004, CEO Robert Nardelli took Home Depot to China. When Frank Blake replaced Nardelli in the 2007 he pulled the plug on the Home Depot's expansion. The reason was that the do-it-yourself big box hardware never caught on. Blake contends that it was a combination of poor regional leaders, the challenge a big box model going up against China's distribution system, and a cultural mismatch that never understood why doing it yourself should be a point of pride (Dubois, 2012). In 2012, Blake closed down all the seven box stores in China and came home.
The purpose of the paper is to discuss the possibility of the Home Depot entering the Britain's global market. Considering that the United Kingdom market already supports the Home Depot equivalent B&Q do-it-yourself (DIY) store, what entry strategy should Home Depot employ and what risks, opportunities, and threats does Home Depot would face if it were to enter the United Kingdom market? General risks will be discussed in terms of which ones are specific to The United Kingdom market.
Dubois, S. (2012). Home Depot knows when to call it quits. CNNMoney. Retrieved from: http://management.fortune.cnn.com/2012/10/26/home-depot-knows-when-to-call-it-quits/
The United Kingdom's (UK) country tier risk is a country risk tier 1 or CRT-1 rating, which defines the country's low level risks across three categories: economic, political and financial system. The UK has a predictable and transparent legal environment, legal system, and business infrastructure. The country's CRT-1 rating also demonstrates that it is very unlikely that fundamental weaknesses in the UK's economy will cause adverse developments.
Although, the UK suffered a set back during the global financial crisis in 2009, enjoyed a positive growth in 2010 and 2011. Its recovery faltered in 2012 but with less of an expected contraction (0.9%) than experienced in 2009 at 4.9% (A.M. Best, 2012). The UK's CRT-1 also signals how the overall quality of the business environment, ease of doing business, and flexibility of the of the labor market, efficiency of the government bureaucracy.
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The risk, opportunities and threats are examined for an entry strategy for home depot.
1. Discuss the environment they operate in (general and task environment -- discuss Porter's forces) (Opportunities and Threats),
2. Prepare an EFAS, IFAS, SFAS
3. [societal] Environment]). This is where 'Opportunities' and 'Threats' are.
4. Discuss their internal structure, their culture, their resources. (This is really their 'Strengths' and 'Weaknesses.'),
5. What strategy do YOU SUGGEST they follow (strategy formulation)?
6. What is their 'corporate strategy' -- if they are a multi-business enterprise?
7. What does their portfolio look like (BCG -- Boston Consulting Group)?
8. Which areas do they want to grow, which do they want to keep stable, and which do they want to scale back from (retrench)?,
9. What 'business strategies' will YOU SUGGEST (low cost leadership, differentiation, focus)?,
10. What are some of their 'functional strategies,' which YOU SUGGEST they follow?,
11. Discuss some about implementing the strategy -- challenges, tradeoffs, etc.,
12. How would you control it (once you have implemented it)