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Macroeconomic factors that affect businesses
Macroeconomic factors that affect businesses
Influence of the economic environment on a business
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The external forces that are taken into consideration for The Home Depot’s are the economic, sociocultural, and ecological. Similar forces were taken into consideration by Ford Motor Company which is the economic, ecological, and legal. Here both the companies worked on same forces except one. Coming to the economic and ecological forces, they both affect the companies adversely in terms of purchasing and recession. Due to this none of the companies would be able to make a profit as they can’t sell their products. In case of The Home Depot, projects like the DIY might be increasing which would result in the downfall of the economy. This had had its effect on its durable goods like the dishwashers at the time of recession (Choi, 2012, p. 1). …show more content…
And so the company may face trouble with strong ecological forces and they need to make lots of innovation and research in order to gain product improvisation which would take lots of time. When it comes to The Home Depot, the ecological forces might not be making a huge impact as they produce many other products which include not just the household products but also the lumber and gardening tools (Choi, 2012, p. 1). Now considering the forces that are not similar the sociocultural and legal forces, Ford Motor Company might be viewing and giving more importance to the legal force compared to The Home Depot as they are stubborn in terms of following the regulations and guidelines strictly being an automobile industry. This is not applicable to a retail industry like The Home Depot. Instead, The Home Depot will be reviewing the other force sociocultural as they produce a wide variety of goods based on its demographics. It may also depend on the type of customer who lives in different regions and their interests (Choi, 2012, p. 1). …show more content…
This label will be also having a positive note on the customer mind in terms of profitability, shareholder value, and the profitability if the products could able to earn more profits to the shareholders. In this regards, The Home Depot is trying its best to make sure that their suppliers earn the label of Eco Options brand and their products meet the guidelines ecologically and strictly. This would help them develop their reputation in the market and achieve their desired results both socially and economically. The Home Depot was responding well to the needs of the customers when they launched the Eco Options brand label. This is considered as one the favorable option from the customer point of view as they thought The Home Depot is caring the needs of them. And so the chances of purchase by a customer increased as the perceptions are more favorable to them. This led to the increase in the performance as well as the revenue which made the shareholders happier. By this, the balanced scorecard would be always on a positive note (Morganbridges, 2016, p. 1).
The Home Depot is recognized as being the leader in the home improvement retail industry by combining the economies of scale inherent in a warehouse format with a level of customer service unparalleled among warehouse-style retailers. ("Home Depot to", 1999)
During 1990’s, the Home Depot was well renowned for its amazing customer service as orange- blooded entrepreneurial culture and outstanding customer service. Since the initiation Home Depot took a long-term approach by training its employees to form enduring customer relationships rather than push for incremental sales gains. This made the company grow very quickly becoming the fastest
For example in the economic forces they work to provide higher end discounted items to keep the profits up by allowing shoppers to have quality and cost savings. In the technological forces, Target has used the increase use of mobile platforms to allow their customers to shop online and pick up in the store by saving time. With the political-legal forces Target works to provide a safe and non-discriminating environment for all customers. Environmental forces are taken in to effect by looking at better waste recycling management to decrease their carbon footprint. Target works hard to represent the values and mores of their customer base, by being actively involved within the community and addressing current social
There are a number of smaller players but lack the public existence and retail footprint of their larger counterparts. With such high levels of market absorption, both HD and LOW enjoy high bargaining power with suppliers of goods. The two companies vary significantly in terms of the strategies they employ to compel consumer traffic. Home Depot centre of attention is customer service, while Lowe’s offers discounts to improve sales. Home Depot has determined on customer service as a driver to grow customer traffic and sales, Lowe has battled mainly on the basis of lower prices. Home Depot has a status for lesser prices and more pro-friendly impression where Lowe’s is trying to capture the traditional do-it-yourself customer by trying to appeal the female customer, who the company declares, is responsible for eighty percent of home improvement
Home Depot is the brainchild of Bernard Marcus and Arthur Blank and came about after both men lost their job in the home improvement industry in 1978 (Parnell, 2014). Home Depot has acquired several smaller home improvement stores in both the U.S. and abroad through the years which enabled it to position itself as the world’s largest home improvement chain (Parnell, 2014). Home Depot focuses on the do-it-yourself segment of the market and sells sells tools, construction products and services. Marketing is a strong point for the company. They are able to maintain a competitive advantage by keeping themselves available to their customers at all times. Home Depot has been using both online and offline marketing efforts. The internet has become a very useful tool for the company and part of the reason that they are leading the market in DIY stores. Home Depot currently provides DIY videos on YouTube and Vine that cover current topics that consumers are likely to be interested in. They also have social media pages on Facebook and Twitter, where they have a huge following. They provide online communities where actual employees answer consumer’s questions and provide assistance on
Opening its doors for the first time in 1946, Lowe’s is now the second largest home improvement chain in the world, operating over 1,800 stores in the United States, generating $56.2 billion in sales and $2.6 billion in net income for 2014 (Lowes Newsroom, 2015). Employing around 265,000 personal making them one of the top employers in the nation, there is no question that Lowe’s must be doing something right. According to Lowes Newsroom, “Lowe’s professional customers represent approximately 30 percent of total sales, approximately 16 million retail and professional customers are served each week. (2015, para 3) “Never Stop Improving”, is Lowe’s slogan; encouraging employees and customers to work together to maximize their in store
The Home Depot began changing consumer’s perspectives about how they could care for and improve their homes, by creating a “do-it-yourself’ concept. According to the founders, the customer has a bill of rights at the Home Depot. The bill of rights entitles the customer to the right assortment, quantities and price (of tools and home improvement supplies) along with trained associates on the sales floor. Home Depot describes their business strategy as a three legged stool, which stands for customer service, product knowledge and availability and disciplined capital allocation. (Moskowitz,
Content 1.Preface 2.Introduction 3.Problem definition 4.Summary 5.Conclusion 6. Chapter 1: External analysis of Home Depot Inc. 7. Chapter 2: Internal analysis of Home Depot Inc. 8. Chapter 3: Strategic forces. 9.
Lowe’s is taking a step further with these efforts and building “green” stores. Lowe’s now has 30 “green” stores nationwide and making efforts to build more in the future.3 Lowe’s was also awarded with the Energy Star in 2004.4 Intangible · Culture: o Lowe's has a rich history of community involvement across the country, from natural disaster response to community improvement and education-based initiatives. In 2007, Lowe’s and the Lowe’s Charitable and Educational Foundation together contributed more than $27.5 million to support community and education projects in the United States and Canada.5 · Brand Reputation: o Lowe’s home improvement is rated second in home improvement stores nationwide.1 During its existence Lowe’s has created a great environment for its customers to come and shop and find the quality product they can count on Lowe’s to have. Human Resources · Skills: o Lowe’s and Home depot both employ specialists from their respective fields, but Lowe's provides a supplemental commission-pay structure with a philosophy of retaining energized quality staffing, while Home Depot's employees are paid a flat salary.5 ·
Wal-Mart is one of the world's greatest assets to most people. It provides consumer's a place they can go to virtually get anything they need from, car repairs, to groceries, prescription's, even the latest toys and electronics. With all that said, this paper relates to the different forces in business that affects business: competitive, economic, political + legal + regulatory, technological, cultural + social, demographic, and natural forces. Although there are technically seven we are going to focus on competitive, political, technological, and natural forces.
New businesses will take longer to thrive with the United States falling economy. The faltering job market and the deepening slump in housing threaten to hurt consumer spending. Consumers are becoming more conscious of their spending and therefore using cash to pay for smaller necessary purchases. The cost of entertainment and other presumed luxuries may be pushed to the background by most families, when having to choose whether to pay for a bill or treat the family out. Thriving businesses will understand the need to provide a service or product at affordable prices.
Analysing McDonalds (fast food outlets) using Porters 5 Forces model – sometimes called the Competitive Forces model.
Organizational change is the altering of organizational structures and business strategy. As consumer preferences change, competition increases, and the economic environment fluctuates, business need to adapt to these changes to remain competitive. The management of Home Plus, a regional discount store, has proposed an increase of high-end products and a significant reduction in discount packaged goods. This is a change from the original business strategy in which the primary offerings were discount products. Before implementing the proposed strategy, Home Plus management must consider the benefits of the change and the consequences that may occur. As a member of the management team at Home Plus I disagree with the proposal to increase high-end
By quality/value – positioning of the product based on high quality. Also can be claimed that the product have high value.
The label provides as a primary source of customer alertness and is very important to make the most of the usefulness of the merchandise. Labels stay customers knowledgeable; the explanation of