Strategic Plan Part II: SWOTT Analysis 1 Strategic Plan Part II: SWOTT Analysis Marco Elizaldi BUS/475 Integrated Business Topics February 5th, 2018 Professor: Ryan Simpson Strategic Plan Part II: SWOTT Analysis 2 Strategic Plan Part II: SWOTT Analysis Strengths • • • • • • • • • • • • • • • • • Organization reputation. Track record Existing brand Long term economic stability Resources Penetrating new market with new services and goods. Job creation. Capital Knowledge Purchasing inventory Large capital Realistic goals Community consciousness Obtaining quality technology Investing in new markets. Creating efficient vending machines Company culture Opportunities Weaknesses • • • • • • • • • Lack of experience in new market Need more services Initial cost investment New market Brand power Cost of overhead material Relationships in new market Market challenges Constant investment on technology Threats Strategic Plan Part II: SWOTT Analysis • • • • • • • • • • • • • • • • • • • • • • • • • • • Explore new market Relationships Partnership strategy Multi-billion dollars market share available Develop new innovation Create more jobs Recognition Continued market development More investments Create more community programs Time management Become more efficient Creativity in new business approaches Make more profit Diversify Trends Business expansion Business experience Existing customer base Reputation Capital Reliable supplier management Technological investments Goal consistency Innovation Culture improvement Great profits Great leaders 3 • • • • • • Competition Liabilities New competitor in new market Lack of experience Market fluctuation Upfront investment cost Strategic Plan Part II: SWOTT Analysis 4 Strategic Plan Part II: SWOTT Analysis The SWOTT analysis is a tool that evaluates the strengths, weaknesses, opportunities, threats, and trends. This analysis examines the aspects of the business and recommends changes as deemed necessary to achieve the desired success. SWOTT analysis is very important in the strategic planning of a business. During a SWOTT analysis the business being studied exposes itself to companies whom assess and evaluate their capabilities, capacity, and their competitiveness in their specific market. One of the most important benefits of doing a SWOTT analysis is that it provides the business being studied with an strategic solution for their areas of improvement and also improves their operational functionality. A SWOTT analysis provides a strategic plan with an external and internal viewpoint of the business. Knowing both the external and internal factors that affect the business in both a positive and negative way is extremely beneficial. Knowing the strengths, weaknesses, opportunities, threats, and trends allows businesses to determine the wellbeing of the business but it also allows them to explore other avenues that may make the business better. Home Depot Inc. has a great opportunity to penetrate a market that they have never explored that has the possibility of being successful and generate millions if not billions of dollars in revenue. Economic, Legal, and Regulatory Forces The new division of the Home Depot Inc. as previously discussed in the prior assignment is exploring into a new market in which they have never contemplated doing business before. This new division focuses strictly into the manufacturing sector and metal working markets. These areas of business are designed for industrial tool distributors and the Home Depot Inc. has always focused in residential and commercial business. This new business approach offers a lot Strategic Plan Part II: SWOTT Analysis 5 of benefits and some liabilities as well, that is the reason in which a SWOTT analysis is posted with this assignment. Economic, Legal, and Regulatory Forces The Home Depot Inc. will encounter economic, legal, and regulatory forces during their exploration and implementation of the new vending solutions and metal working divisions. The economic forces are the reason in which the Home Depot Inc. is contemplating expending their business into the mentioned new sectors. The SWOTT analysis has demonstrated a set of great strengths in the economic external forces. The businesses long term economic stability is a key factor that the Home Depot Inc. can achieve in a successful transition of the new division. However, this also comes with weaknesses. The weakness that the business will face is the lack of experience in these new services and goods. Additionally, the opportunities outweigh the weaknesses. The opportunities allow the Home Depot Inc. to get a piece of the large pie of the manufacturing business, where the available market share is estimated in the multi-billion dollars figure. The threats that the business will encounter are based on being a new competitor in the manufacturing business. The competition is extremely hard, that is the main reason that the Home Depot Inc. may slowly get into this new business. However, the trends of the Home Depot Inc. are positive because of their great name and reputation that their name offers to consumers. The legal and regulatory forces that the Home Depot Inc. will face in this new endeavor are based on obtaining the required permits for operations and licenses to sell into the manufacturing sector. The strength of having a great track record as being the biggest hardware store in the world give the Home Depot Inc. an advantage over their weaknesses of having the lack of knowledge on this new division. The opportunities to build strong relationships with new and current suppliers is a plus. The liabilities that the business can encounter as part of the threats Strategic Plan Part II: SWOTT Analysis 6 are possible kickback by the competitors of not allowing the Home Depot Inc. to introude the new division. However, the trends of the Home Depot Inc. of having a lot of years of experience in running a multi-billion dollars business gives them again the required leverage to overcome these obstacles. Adapting to Change Change is the always scary to anyone. It is no different for businesses, as these try to brainstorm how to expand their business and when to do it. Change is inevitable. The Home Depot Inc. knows that they must keep growing and testing new markets and product lines. The culture that the Home Depot Inc. has, allows them to focus on what is right to their customers, their stakeholders, and their community. Adapting to change can be very challenging, however the Home Depot Inc. has an approach where their leadership provides all their stakeholders with the necessary support to face all these and any changes. Any new adventure has its pros and cons. That is why the Home Depot Inc. has a strategic plan in place with detailed steps to succeed in this new division of vending solutions and the metal working product lines. With both the great leadership, culture, and strategic plan in place the Home Depot Inc. will adapt to any required changes that they may face during this new endeavor. Supply Chain – Plan for Success Any large business requires a good and stable supply chain. The Home Depot Inc. has in place a plan that will provide the necessary support to their new division. The creation of five major distribution centers geographically located in strategic points throughout the US will be key factors to their success of their new metal working product lines. A distribution center in Atlanta, Pittsburgh, Kansas City, Seattle, and Reno will provide the right amount of transit times to deliver the metal working products. The picking of material in these distribution centers and Strategic Plan Part II: SWOTT Analysis 7 the shipping of material will be very fast thanks to the new technology that the Home Depot Inc. will implement. Real-time data and the assistance of IBM Watson will facilitate the speed and accuracy of the supply chain. Internal Organizational Considerations Being prepared to roll out the transition of the new division requires precise goals, plans, and approaches. Having a primary internal organizational strategic plan is a key factor for a proper roll out. The Home Depot Inc. must create jobs to fill the supply chain distribution centers. In addition to this, additional offices will be required in their main corporate building in Georgia where they will have to create procurement, accounts payable, accounts receivable, and credit positions. Issues and Opportunities A very large investment will have to be made by the Home Depot Inc. to buy vending machines. These vending machines will be installed at customers locations depending on their tool needs. There will be many different sizes and configurations of vending machines. A business need analysis will be created by the outside sales agents that the Home Depot Inc. will have to hire. The vending solutions will be discussed with the customers and upon agreeing on paper via an LOU (letter of understanding), the order would be placed for the vending machine at no cost to the customer. In the LOU, the terms will determine the number of machines, the schedule in which they will order, and how often the machines will be filled. The Home Depot Inc. will also have to create a new position called VSR (vending solutions rep), where the VSR will stock the machines and scan any new items that the customer may need via VMI (vendor managed inventory). With the creation of both outside sales reps and VSR’s, the Home Depot Strategic Plan Part II: SWOTT Analysis 8 Inc. will have to invest ones again to provide a company paid vehicle, gas card, cell phone, tablet, laptop, and scanners. The new roll out of this division will be implemented in waves or phases. The map of the US will be broken down into 10 waves, in which the Home Depot Inc. will make sure that each one of the waves is implemented accordingly. The issues that the Home Depot Inc. will face are financial or economic, since this division requires a huge investment upfront. However, the opportunities that will present themselves will pay for the investments in no more than 2 years from the roll out date. The manufacturing business is huge, players such as General Motors, Ford, Boeing, Government agencies such as the Air Force and Army will generate multi-million dollars in contracts on a yearly basis. An empire can be built with all the opportunities and the available market share. Conclusion In conclusion, any available opportunity for positive change should be properly evaluated and assessed. The new division of vending solutions and the new metal working product lines will be a very large investment for the Home Depot Inc. However, the available market share and opportunities are worth the risk. The reputation that the Home Depot Inc. has will make the business not only the largest hardware store, but the largest tool distributor in the US.
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