Home Depot Environmental Analysis
An organizations external environment consists of three interrelated sets of factors that play a principal role in determining the opportunities, threats, and constraints that the company will face. The first factor is the remote environment that comprises of factors originating beyond any organizations operating situation such as economic and technological factors. The second factor is industry environment. This more directly influences organizations prospects originating in the environment of its industry like competitor rivalry and the bargaining power of buyers and suppliers. Finally, the operating environment comprises factors that influence an organizations immediate competitive situation that could include the factors competitive position, suppliers, customer profiles, creditors, and the labor market. These three sets of factors provide many of the challenges that a particular firm faces in its attempts to attract or acquire needed resources and to profitably market its goods and services (Pearce, 2004).
A major factor in the remote environment for Home Depot is in the area in technology. To avoid obsolescence and promote innovation, a firm must be aware of technological changes that might have industry influence (Pearce, 2004). Creative technological adaptations can suggest possibilities for new products, for improvements in existing products, or in manufacturing and marketing techniques (Pearce, 2004)
A long-term objective that Home Depot must address is in this area is product innovation. The company needs to introduce distinctive and innovative new products in 2006 and beyond to support emerging consumer trends. This type of strategy is needed to help differentiate Home Depot from others competitors in the marketplace (Webbolt, 2006).
Home Depot faces competition in product innovation from Lowe 's and other companies (and sometimes individuals). This can have
References: Levinson, M (2004). Home Improvement. CMO. Retrieved April 24, 2006, from http://www.cmomagazine.com/read/081004/homedepot.html Pearce, J. A., Robinson, R. B. (2004). Strategic management: Formulation, implementation, and control (9th ed.) Boston: McGraw-Hill. Webbolt Global Business News, Research & Intelligence (2006). The Home Depot: The Home Depot Presents 2006 Initiatives and Long-Term Growth Vision to Investor Community Retrieved April 24, 2006, from http://webbolt.ecnext.com/coms2/news_58773_COR