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The Home Depot, Inc. Market Trends

1279 words - 5 pages

The economy is the main topic of discussion between neighbors, classmates, the mass media, and the President. Unfortunately, all that is discussed are the negative notes of how much money one lost in the stock market, how homes no longer have the equity it once had, and how some lost a home because of having the current status of consulting and being in between jobs. Because Home Depot is the leading supplier of home improvement building materials and related tools and supplies, the economy has greatly affected the company's revenue and generating lower profits. However, a close watch on market trends will help the company foresee challenges or issues the company might encounter so steps for a successful short-term and long-term goals will be reached.During the initial stages, Home Depot dominated the do-it-yourself, home improvement market. Although Home Depot entered the oligopoly where there were existing companies that offered home improvement remedies, such as Wal-Mart, K Mart and Orchard Supply Hardware, none of the competitors offered do-it-yourself remedies at such a large scale. With Home Depot's number one contender being Lowe's, offering comparable prices with the same do-it-yourself warehouse environment, Home Depot is still in the lead as the largest home improvement retailer in the US.The price elasticity of demand is extremely important to any business, especially to a retail company such as The Home Depot. Determining how changing the price on specific products will affect the demand is crucial, especially in the current economy. Due to the amount of retail competitors and the recent decrease in consumer confidence, we determined that The Home Depot supplies thousands of elastic products. Increasing the price on items such as appliances, building materials, fixtures, and flooring would decrease the demand.Production of technology and/or any equipment that may facilitate a project or job has been a part of the marketing for The Home Depot. Now they offer electronics such as cameras, televisions, car audio, computers, home theater equipment, and other technology that has allowed them to expand into new markets (The Home Depot, 2009). This new department will increase their market share into additional retail markets.With such a sharp downward trend occurring in productivity Home Depot's inventories will doubtless be reduced quickly, with little means to replenish its supplies. With less material to sell, major changes would have to take place in Home Depot for it to stay afloat, changes, which will affect its cost structure. A major change that took place recently within Home Depot was their cutting of some seven thousand jobs. Home Depot has gone on record as saying the job cuts are intended "to better align the company's cost structure with the current economic environment." Whether or not this reduction of workers will have the effect desired by Home Depot remains to be seen, but those fortunate enough to remain in the company...

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