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Conduct a complete study of Home Depot Asias external environment and identify the critical strategic factors in each of the following areas:
The General Environment
The Industry Environment
The Competitor Environment
Based on your analysis, do you agree with The Home Depots decision to move into China?
The case content provides a great deal of information about the external environment for Home Depot Asia, specifically homeownership conditions in China and the home improvement market in which the company plans to participate. These environmental conditions present relevant opportunities and threats that will impact the success of company expansion efforts.
The General Environment. Assessing the general environment focuses on a companys future and the forces that will influence its growth and performance. The table below outlines segment conditions and the potential opportunities and threats that they present.
Opportunities
Threats
Economic Segment
*See regional differences in table below
Fastest growing economy in the world
Second largest economy in the world
Per capita GDP $1,703 (varies by region)
Increasing productivity
Village enterprises being set up in rural areas
Promotion of self-managed state-owned enterprises
Increased competition in marketplace
10% growth rate in agricultural and industrial output
Doubling of per capita income
Major industrial gains, especially in coastal areas
Influx of foreign capital driving up industrial output of domestic and export goods
Prices accelerating
Increased trade
2008 Olympics - huge investments
State bank lending readily available to home buyers
Property speculation moving westward from east-coastal region
Agricultural output steadily declining since 19851998-1999 Asian Financial Crisis: growth fell to 7.1% in 1999, inflation dropped sharply 1995 to 1999, tighter monetary policy of central banks, stronger measures to control food prices
Large economic disparities between rural and urban regions
Unemployed
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