International_Business_Paper 123

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Muhammad Ali Jinnah University, Islamabad *

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Business

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Nov 24, 2024

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Uploaded by BrigadierIce12196

1 International Business Paper Student’s Name Professor’s Name Institutional Affiliation Course Code Due Date

2 International Business Paper Global Business Environment Companies must have an international strategy to remain competitive and successful in today's global business environment. Companies must be aware of the risks and opportunities posed by the worldwide economy and how their international strategies can help them capitalize on those opportunities. Companies must also be mindful of the different cultural and legal environments in the countries in which they operate and the impact these can have on their strategies. The company Home Depot will be analyzed in terms of its international strategy and its effect on its costs and competitiveness through this research. Home Depot operates in a highly competitive global business environment. Home Depot is the largest home improvement retailer in the United States, but they are facing increased competition from Lowe's and other smaller regional players (melissa_repko, 2021). In addition to competition in the U.S., Home Depot faces competition from international retailers expanding into the U.S. market ( Angelos, 2021). For example, German-based OBI Group has opened stores in the United States, and U.K.-based B&Q has announced plans to enter the market. Home Depot must also compete with online retailers such as Amazon, Wayfair, and others, who are able to offer lower prices and more convenience. Home Depot must also contend with an increasingly global economy and changing customer demands. The company must stay ahead of trends in order to remain competitive. This includes focusing on customer experience, offering eco- friendly products, and leveraging technology to provide better customer service. Additionally, Home Depot must remain vigilant about keeping costs down and increasing efficiency to remain profitable. The global business environment is ever-changing, and Home Depot must stay one step ahead of the competition to remain successful.

3 International Strategy Home Depot's international strategy is focused on expanding its global presence and increasing its presence in key markets. The company has identified key markets, such as Canada, Mexico, and China, as well as other countries in Europe and Latin America, as key growth opportunities (Fazzini, 2020). Home Depot has established several stores in these markets, and an online presence in some countries better serves its customers ( Angelos, 2021). The company also has several partnerships and joint ventures in place with other companies in these markets to increase its presence and better serve its customers (melissa_repko, 2021). Home Depot’s international strategy is also focused on cost savings . The company has invested in several cost- saving measures, such as introducing more efficient manufacturing processes and increased automation in its stores. These measures have allowed the company to reduce costs and remain competitive globally. Home Depot's international expansion strategy has been relatively successful, as evidenced by its continued growth in international markets. The retailer has benefited from local partnerships, such as its joint venture with Mexican retailer Grupo Carso, to help gain a foothold in the Mexican market. Home Depot has also been able to capitalize on its existing infrastructure and distribution network in the U.S. to expand into new markets quickly. Overall, Home Depot’s international expansion strategies have been successful in helping the retailer to expand its presence in new markets and capitalize on the growing demand for home improvement products (Fazzini, 2020). Home Depot has gained a strong foothold in many international markets by focusing on local partnerships and leveraging its existing infrastructure . The impact of international business decisions on a company's costs can be significant. For example, Home Depot's decision to expand into international markets has increased costs

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4 due to the need to hire additional staff and invest in new infrastructure and technology ( Angelos, 2021). Additionally, Home Depot has had to invest in research and development to create custom solutions tailored to the needs of different international markets. Expanding into international markets also affects the company's competitiveness in its home market. Home Depot has had to invest in marketing and advertising to build awareness of its brand in foreign markets ( Angelos, 2021). This can be costly and has resulted in Home Depot competing with larger, more established competitors in those markets. Additionally, increased competition from international companies in Home Depot's home market has decreased the company's market share and profit margins. Overall, the impact of Home Depot's international business decisions can be positive and negative. On the one hand, the company has gained access to new markets and customers, which can help increase revenue. On the other hand, the associated costs and increased competition come with the decision. Ultimately, it is up to the company to weigh the pros and cons of international expansion and make the best decision for its long-term success. Ethical Dilemma Home Depot has faced some ethical dilemmas in its international operations; the most pressing of which is the issue of labor rights. Home Depot has been criticized for its labor practices in countries such as Mexico and China. The company has been accused of not providing adequate wages and working conditions for its employees in these countries and of not providing adequate safety measures. Home Depot has also faced criticism for its environmental practices in countries such as China and India. The company has been accused of not properly disposing of its waste and not protecting the environment in these countries.

5 Management Strategy Home Depot’s management strategy focuses on being a global leader in the home improvement industry. The company seeks to remain competitive by focusing on cost savings and efficiency (melissa_repko, 2021). Home Depot also seeks to maintain a strong presence in its key markets, such as Canada, Mexico, and China, as well as other countries in Europe and Latin America. The company has invested in several cost-saving measures, such as introducing more efficient manufacturing processes and increased automation in its stores. The company also has several partnerships and joint ventures in place with other companies in these markets to increase its presence and better serve its customers. The company also has several initiatives to ensure that its employees in these countries are treated fairly and provided with adequate working conditions and safety measures (melissa_repko, 2021). Home Depot has also implemented several environmental initiatives in countries such as China and India to reduce its environmental impact. The operations and financials of home depot company The company's diversified product portfolio includes building materials, home improvement supplies, appliances, tools, paint, and more. It operates over 2,200 stores in the U.S. and is the world's largest home improvement store ( Angelos, 2021). The company reported gross margins of 34.1% and 34.6% since 2010. Home Depot primarily generates revenue through the sale of its products ( Angelos, 2021). The company has seen strong revenue growth over the years, driven by increased store openings and the expansion of its product portfolio. The company has seen an increase in operating margin over the years as it has focused on improving operational efficiency. The company has seen an increase in net income over the years due to strong revenue growth, cost-cutting measures, and improved operational efficiency. Home

6 Depot's balance sheet is solid, and the company has a strong liquidity position. Overall, Home Depot is a well-run company with a solid financial position. The company has seen strong revenue growth and improvements in operating margin and net income. The company's balance sheet is solid, with a strong liquidity position. The ethical issue faced by home depot in the international business environment One ethical issue faced by Home Depot in the international business environment is the potential for bribery and corruption. Home Depot has a significant presence in the international market, with stores in Mexico, the Caribbean, and Canada ( Fazzini, 2020) . This means that the company is exposed to the risk of bribery and corruption when dealing with foreign governments and businesses. Home Depot must ensure that all its employees know and abide by the company's strict anti-bribery and corruption policies. Additionally, the company must ensure that any third-party partners they work with comply with anti-bribery and corruption policies. Doing so will help Home Depot maintain its ethical integrity in the international business environment? Christian Values Home Depot has portrayed Christian values through its international business decisions by providing its employees with fair wages, working conditions, and adequate safety measures (melissa_repko, 2021). The company has also gone to great lengths to reduce its environmental impact in countries such as China and India. Additionally, Home Depot has focused on being a responsible corporate citizen by engaging in charitable activities in the countries where it operates. These activities show Home Depot's commitment to being a responsible corporate citizen and living out Christian values in its international operations. Conclusion

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7 Overall, the global business environment has presented many challenges for Home Depot over the past few years. Home Depot has implemented various international strategies, ethical dilemmas, and management strategies to remain competitive. Home Depot has created a global presence in Canada, Mexico, and China and has implemented a global supply chain to manage its operations. Home Depot has implemented a Code of Business Conduct and Ethics for its employees and partners to ensure ethical practices. Additionally, Home Depot has implemented a strong management strategy to ensure operational efficiency and financial stability. Home Depot has remained competitive in the global market by focusing on operational excellence, customer service, and innovation. Furthermore, Home Depot has implemented a rigorous financial strategy to ensure profitability and long-term growth. In summary, Home Depot has successfully navigated the global business environment by taking a proactive approach to international strategy, ethical dilemmas, and management strategy. Home Depot has maintained a successful balance between its operations and financials, making it a leader in the home improvement industry.

8 References Angelos, P. (2021). Home Depot Investment Report 2021 Pericles Angelos. Fazzini, K. (2020, May 20). Investments abroad: Home depot leads an International Movement . HBS Dealer. Retrieved December 26, 2022, from https://www.hbsdealer.com/hardware- stores/investments-abroad-home-depot-leads-international-movement melissa_repko. (2021, July 6). Home Depot, Lowe's Amp up Focus on Home Pros, as consumers swap DIY projects for parties, travel . CNBC. Retrieved December 26, 2022, from https://www.cnbc.com/2021/07/06/home-depot-lowes-turn-focus-to-home-professionals- to-propel-growth-.html

International_Business_Paper 123

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