HOME DEPOT - when Lowes entered the Dallas market and the...

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Antoine Ngoupou MBA 545 Home Depot, Inc in the New Millennium Based on the assumption made in question 2, I do not think Home depot will be able to achieve its performance assumptions. With its intend of opening new stores throughout the country in the coming years, Home Depot will be facing an over saturation of the market, due to the fact that those stores will be opened in market where they are already in. Home depot will have to face it major competitors such as Lowe’s, whom are also thinking of expanding by planning to add 115-120 stores nationwide. As the case study mentioned, the home improvement market is already facing an over saturation of the market in some big cities market such as Atlanta, Georgia, where there are 43 Home Depot, Lowe’s, Ace Hardware and True Value stores within a 20 miles radius from each other. Opening more stores will only create a drop in their revenues because Home depot would have to cut down its prices in order to match the competition as they did
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Unformatted text preview: when Lowes entered the Dallas market and the new opening will only increase their fixed and variable costs. Macro economic conditions might also prevent Home Depot from achieving their performance assumptions. With the expectation of some slowing economy, as the case mentioned, the Home Improvement research Institute projected the average nominal growth in the industry of about 4.5% a year over the next several years. Up until 2000, Home depot has benefited of from low interest rates, strong housing turnover, rising home ownership and an increase in discretionary income throughout the nation. The fact remains that no one can really have a full grasp of the economy as it fluctuate so often, but if people happen to lose their jobs, or home, or if a the economy experience a down turn in the real estate market as it has happened recently , the need for home improvement will be surely fall....
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This note was uploaded on 04/29/2010 for the course MBA 545 taught by Professor Debraco during the Spring '10 term at American University in Bulgaria.

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