Home Depot is known as the place to go for those who embody the DIY mindset when
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Question:
- So, why the quick exit from the Chinese market for Home Depot?
The problems they encountered can be boiled down to two main issues. First, the Home Way stores were predominantly located in Chinese suburbs. While being located in the suburbs makes sense in the U.S. — as this is where people tend to move when they gain wealth — this is not the case in China. Chinese citizens who acquire wealth will typically stay in the cities and live in apartments or condominiums, which typically don’t require the need for renovations. Home Depot took their time when it came to deciding whether or not to enter the Chinese market. However, it seems they still lacked the proper amount of preparation and social understanding it takes to successfully navigate a new and foreign market.
Question:
Where was the mistake of the company? (global strategy, evaluation of international risks, inaccurate information, extremely different market, the problem with market analysis, etc). Suggest your decision as a market analyst to avoid this failure in the future.
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