Should Home Depot Expand into China?

Please answer all the questions given at the end of this paragraph.

Should Home Depot Expand into China?
In this case, which was written about in May 2006, Home Depot Inc. is considering whether to enter the home-improvement market in China, where private homeownership has skyrocketed in recent years—to 70% of all housing today. The biggest problem is that several home-improvement competitors—Homemart, Homeway, Orient Home, and British-owned B&Q—are already well established in China. Moreover, the way home improvement works in China is vastly different from the Home Depot model in the U.S.: in China, people who buy newly constructed homes buy concrete shells and are obliged to do all the interior finishing work, including installing inner walls, doors, wiring, and pipes. The Chinese home-improvement stores don’t just dispense advice and sell materials, as the U.S. Home Depot stores do; they offer a complete package, including designing the floor plan, helping choose materials, and providing installation work, including provision of the installation crew. If Home Depot goes ahead, it would have to train thousands of staffers to do such floor-to-ceiling installation, something it doesn’t do in the U.S.
1. Based on Michael Porter’s discussion of the characteristics of an effective strategy, does Home Depot have a good strategy when it comes to China? Discuss.
2. To what extent is Home Depot following the five steps of the strategic-management process?
3. Conduct a SWOT analysis of Home Depot’s potential expansion into China and recommend whether the company should enter the home improvement market in China.
1) Strengths
2) Weaknesses
3) Opportunities
4) Threats
4. To what extent will Porter’s five competitive forces help or hurt Home Depot’s potential entry into China? Explain.
5. Which of the three core processes of any business are going to create the biggest problems for a Home Depot expansion in China? Discuss your rationale
Asked Nov 15, 2012
I don't have all evening to do your schoolwork for you but the home construction/improvement industry in China is very different than other parts of the world and the risks of moving into that market are much greater. The fact that your competitors are willing to take those risks is no reason to do it.

It isn't like a fast food restaurant with 25 menu items. The enormous product mix, the different expectations of the Chinese population and government red tape make the risks outweigh the rewards by a mile.

Answered Nov 15, 2012
Edited Nov 15, 2012
There are several kinds of mature business models showed in current home appliance circulation industry, including the direct operating self-owned exclusive store of home appliance manufacturer, the affiliated and self-operation model of home appliance circulation enterprise; the home appliance e-commercial model. Home appliance industry is one of most open industries among the industries’ competition around China, which is with severe homogenization. Moreover, the positioning of home appliance manufacturer and home appliance circulation company keeps changing.

Impressive changes have taken place in the format model of home appliance circulation industry under the new situation, so it’s necessary to explore new routines to adapt to the environment of commercial model innovation, in purpose of get the more advantages sales volume, income and profit. A key successful factor for so many companies is innovation of commercial model, just as the success of Dell, Wal-mart, Haier, etc., includes the innovation of commercial model.
Answered Nov 04, 2013
Edited Nov 04, 2013
I have seen on the google, "The Home Depot and The Home Way share the desire to bring quality home improvement products and services to Chinese customers. We look forward to this exciting new chapter that our two companies will write together," said Du Sha, chairman and CEO, The Home Way. "We believe that we can continue to enhance our customers' experience as we benefit from The Home Depot's expertise in retail, sourcing and supply chain operations."
Answered Jul 15, 2015

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