Home Depot Inc. SWOT & PESTLE Analysis

ID : 52170853| Sep 2020

COMPANY PROFILE -Home Depot Inc.

Business Sector :Consumer Products Retail

Operating Geography :North America, USA, Global

About Home Depot Inc. :

Home Depot, Inc. founded in 1978, is an American home improvement retailer that sells building materials and home improvement products. The company is headquartered in Atlanta, Georgia and has over 385,000 employees globally.

Home Depot Inc. Revenue :

$88,519 million

Competitive Analysis of Home Depot Inc.

SWOT

PESTLE

The SWOT analysis for Home Depot, Inc. is presented below:

Strengths	Weaknesses
1. Increasing sales growth rate reflecting business expansion 2. Innovation lab for attracting the best talent 3. Effective assistance for affected communities during natural disaster 4. Efficient employee management and well maintained work environment 5. First Call2Recycle participant in North America	1. High debt level from the industry perspective 2. Majorly concentrated in U.S., Canada, and Mexico market
Opportunities	Threats
1. Virtual reality’s scope in optimizing its products 2. Extend its market internationally and focus on online retailing 3. Merge with real estate developers to reap productive competitiveness	1. Imitable business model leading to intensified threat of new entrant 2. Payment systems breached by hackers leading to huge loss in terms of money as well as company’s credibility 3. Bad weather leading to postponement of home improvement projects

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Detailed SWOT Analysis of Home Depot Inc.

Weaknesses

1) High debt level from the industry perspective: Home Depot has a debt to equity ratio of almost 7:1, which is high from the industry perspective. An interesting fact which can be observed from the balance sheet of Home Depot is that it has less amount to be paid in short term loans but has significantly high amounts accumulated as long term loans. These high levels of debts will result in high interest and a negative impact on the profitability and cash flows of the company.

2) Majorly concentrated in U.S., Canada, and Mexico market: Home Depot has established a good market in the U.S., Canada, and Mexico but, in a move to enter Chinese market it failed miserably because the company’s service model of “do it yourself” was rejected by the Chinese people as they perceive manual labor as an activity only for low-class citizen and they hold a snug preference for “do it for me” business model. Also, the venture with United Kingdom and South America, which grew wings with great optimism, eventually tanked. Thus, it can be stated that Home Depot is majorly concentrated in U.S., Canada, and Mexico markets and this dependency is bound to hurt revenues if these economies fail to perform well.