Performance of Home Depot in Chile

Describe and assess the performance of Home Depot in Chile. Analyse the potential effects of the cultural, political and economic environments of the host country on the company’s performance in Chile. To which of these environmental elements would you attribute the poor performance of this company? Justify.

Performance of Home Depot in Chile

The performance of Home Depot has proven uncompetitive when dealing with consumers, partners, suppliers, competitors with a managerial style. With Chile in particular, women have been the significant contributing factor when influencing purchases for the family, and Home Depot did not have enough focus on this market to capitalise on its sales. Additionally, Home Depot stores were far less attractive compared with what competitors had in regards to aesthetic appeal, design and product choice.

Home Depot’s business operations were ineffective and was a result of not including the local area partner Falabella, in the major corporate decisions. Falabella had a strong knowledge base about their consumers, the target market, the home improvement industry and had good networking relationships with the community at large. For this reason, part of Home Depot’s failure was not utilising a main asset and their resources to full potential particularly in a volatile market.

An inappropriate managerial style was also a significant barrier in preventing the integration of Home Depot to the Chilean’s culture, business and social side of the country. Home Depot could communicate with the consumers in Chile in Spanish, which removed the language barrier but ignored the importance of social networks and business common practice of the country which create negative effect on relationship with suppliers and competitors.

Attractive but highly competitive business environment in Chile

The figures from the economic and political environmental factors in Appendix ….. have showed numerous advantages of doing business in Chile. From an initial...