Home Décor

Home Décor

Home Décor

Task 2

Home Décor is losing its market share rather than gaining it in the UK markets. The company and its board of directors are not aware of the problems. Rather they are excitedly focused expansion strategies that look to expand the brand in global markets. The case study on the chain of furniture stores has a natural environment, that needs to be understood before consumer oriented decision making is undertaken.

Some of the essential environmental factors for the business are that the forestland coverage has grown by 1.5% from 1990-2005. Scientific consensus on "endangered regions" of forestry has risen as well. Societal and economic environment is not highly effected by the recession. Business is seasonal and requires technical know how.

Following are some of the important SWOT factors for the company (in no order). These are:

Developments in technology. (O)

Internet became increasingly important as a distribution channel. (O)

Political- Legal

Acquired Total Home, a Mexican home-improvement chain, in 2001. (O)

Agreement to lease commercial office space in Shanghai. (O)

Sociocultural

Rising interest rates. (T)

Increasing gasoline prices during spring and summer. (T)

Housing turnover had slowed down. (T)

High level of U.S. homeownership in 2006. (O)

Task Environment

Stores continue to become modernized. (O)

Primary retail business expanded into multiple channels. (O)

Expanding the market to open stores in new countries. (O)

Rivalry is low. (O)

Buyers' power is low. (O)

Suppliers' power is low. (O)

Distributors' power is high. (O)

Threat of substitutes is low. (O)

Entry barriers are high. (O)

Internal Environment

Corporate Structure

Legally a set of companies composed of two business segments; retail and supply. (S)

Organized and managed by geographic region. (S)

Corporate Culture

98% of 170 top executives left since 2001. (W)

56% of headquarters personnel hired outside of company. (W)

Demoralized Staff. (W)

Centralized organization. (S)

Corporate Resources

Marketing

Broad assortment of high-quality merchandise at services at low prices. (S)

Uses major sponsorships. (S)

Uses various media to maintain an aggressive campaign. (S)

Finance

Net sales increased 11.5% in 2005. (S)

Earnings per share increased from $1.10 to $2.72 in 2005. (S)

Long-term debt-to-equity was 24.5% end of second quarter in 2006. (W)

Common stock fell 30% from 2000 to 2006. (W)

R & D

88,000 square-foot innovation center for testing. (S)

Tested new and radically new product categories and store designs. (S)

Operations

End of 2005, 40% of merchandise shipped to Home Décor stores was processed through the company's network of distribution and transit facilities. (S)

Developed the concept of all-in-one discount warehouse home improvement superstore. (S)

Human Resources

Committed to promotions from within. (S)

Proprietary automated system for identifying the best candidates for store sales associate positions. ...