Question

Discuss the competitive challenges confronting Home Depot. Focus on the competition, customer, suppliers, and substitutes.

Answer 1

Stiff competition affects a firm in various ways. In most cases, areas affected by competition are the cost of production and the distribution processes. Home Depot has faced similar challenges. Two of the largest competitors being Lowe and Menards, but there are several others. Home Depot focuses on providing different services and goods for their customers to combat the stiff competition. As a result, the home retail company provides a variety of products customers can choose. However, some services, including installation, are infiltrated by so many substitutes with better service offers. Such substitutes discourage customers from accessing Home Depot services; Providing another type of competitor in the market. Therefore, Home Depot competitive advantage is not only affected by the tactics their competitors use but also the relationships the company uphold with its suppliers. In as much as competition in business is a vital constituent in the growth of a company, it can result in unhealthy competition, causing a rivalry between two companies. For instance, Home Depot and Lowe compete in the strategy; "Do It Yourself" in improving home products. Home Depot first incorporated the strategy, but Lowe ended up copying the method due to pushes by the market forces. This cultivates an unhealthy competition.