The Home Depot in Chinese Market.
Do it yourself is a largely American culture that has spread to the rest of the north American continent through popular culture and social factors, as well as economic ones. …
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With this, home improvement comes up and there are numerous stores and companies that supply products and advice on how to make one’s home better by installing additional hardware and items to it. This is widely appreciated throughout the world, but in some cases it is only done by contractors based on the economic status of the people involved. One such company that provides these supplies Home Depot which operates across North America. However, attempts to venture into Asia failed miserably when the company attempted to establish itself in China by providing supplies for home improvement through do it yourself antics. Different reasons have cited for this failure, but there is no full consensus on the key causes of the failure of such a large company that was unable to replicate the success of its north American operations in China. This makes it necessary to look into the causes of this failure and how they served to drive the company out of China. Background The history of Home Depot spans over three decades since its inception in the year 1976 in Atlanta Georgia, where the initial Home Depot store was inaugurated in the same year. The main concept of opening the store was to provide comprehensive supplies to all clients who sought after home improvement equipment and provisions in the name of “do it yourself”. This made the company into a di it yourself supply chain across the state of Georgia after the establishment of additional stores. Besides this, there was also the provision of giving advice on home improvement to their clients and other customers purchasing supplies from their stores. With this home improvement target market focussing on do it yourself population types, it supplied partial and full components and products such as building, plumbing and electrical supplies. This is in addition to having a large selection of hand and power tools catering to both customers who preferred the traditional feel of hand tools over electricity powered tools (Miller 2). These also included an assortment of brands for maximum variety that even went beyond convention in regard to stocking gardening tools, where home improvement did not just imply the house or its aspects but the home in totality. The expansion of the store over the years has featured its listing in the New York Stock Exchange and even opening stores to hit a 100 in the year 1989 across all of the United States. Further expansion has gone to an extent of having over 2200 stores across the North American continent ranging from USA, Canada, Puerto Rico, Guam, Mexico and the US Virgin Island, and with these, expansion still continues (“Home Improvement Industry Profile”). With the success of the company across the continent, there were talks of further expansion into the world most populous nation, China. Reasons for the expansion into China was due to the large population that China has and the saturated retail market across the US, which saw the company seek to expand into China. Another factor in consideration was the high amount of competition in China, where economic indicators were supportive of Home Depots expansion into China due to rapid growth of the Chinese economy especially following reforms after Mao’s reign as the Chinese communist leader. As such, the housing market had a lot of potential at the time of the feasibility for Home Depot to expand into China in that most of the houses in China were hardly complete or rather finished in that they needed further addition of features so that clients or home owners are charged with
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