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Essay / Research Paper Abstract
This 7 page paper looks at the large USA based DIY retail firm and discusses whether or not expanding into China would be a good idea. The aims of the company to increase the return on investment is considered in the context of the current operations and push and pull factors that may influence the decision to undertake further international expansion, with China examined as a potential target market. The bibliography cites 8 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEhomechina.rtf
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Unformatted sample text from the term paper:
of its subsidiary brand names, all over the US as well as in seven different Canadian provinces, Puerto Rico and Mexico and most recently with the acquisition of Chinese retail
firm The Way Home giving the firm 12 braches in China (Home Depot, 2008). The company has expansion plans; these may be aided by the fact that the current international
operations contribute 10% of revenue to the total revenue but 12% of profit (Home Depot, 2007). The current strategy of Home Depot is to increase the return on investments for
the shareholders with a focus on the retail side of the business, but it is also noted in the 2007 annual report that in the US there will be fewer
new stores opening compared with past years (Home Depot, 2007). With the desire to increase sales and revenues along with profits the firm faces a challenge in the best way
for this to be achieved. Expansion into China may be one strategy that offers opportunities for the firm, especially with the existing limited presence in the country. The question is
whether or not this would be a good strategy for Home Deport to follow and if it will achieve the main goal of the company, which is increasing the return
for investors? The idea of expanding into China is an international expansion strategy. A common strategy of many businesses is to seek international expansion with the assumption that
increase size and geographical scope will increase revenues by increasing the available target market which will also increase the level of profits1 created for shareholders (Mintzberg et al, 2003). There
are a number of underlying reasons for this strategy to be deemed attractive, the ideas of economies of scope and scale may have an impact, as could the concept of
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