Home Depot, Inc is the global biggest home improvement retailer as per the 2017 fiscal year. The enterprise provides its customers with an assortment of building materials, lawn and garden item, home improvement items, decor product and gives a couple of services (Bruner, 2018). As of 2017 fiscal year, the firm had 2284 stores that were in various locations in the U.S. The firm also extends it operation in Puerto Price, Canada, Mexico. The stores have an average of 104,000 square feet with about 24,000 additional areas of outside garden locations (Bruner, 2018). The enterprise also has a network of fulfillment centers and various e-commerce website. The firm has two categories of customers that are homeowners and professional customers.
The firm helps the homeowners both at the store and online platforms get the most suitable material for their home improvement (Bruner, 2018). To the professional customers, the firm gives them special services like delivery, will-call services; dedicated sales enhance credit, designated parking space and service staff. The firm also has a loyalty program that rewards the professional client on useful business services. The firm also enables it clients to finance their projects by giving the private label business card. In the fiscal year 2017, the enterprise registered about 4.4 million new private label business card holders.
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The active user of the private label business card was 15 at the end of the 2017 fiscal year. Sales from the private card were estimated at 23% of the net sales in the fiscal year of 2017 (Bruner, 2018). The firm also operates online sales platform, at the end of the 2017 fiscal year sales from the online platform rose by more than 21%. As shown in table 1, the firm’s sales from the year 2013 to 2016 has had an upward trend. The upward movement in sales of the firm has also led to rising in the inventory and account receivable.
General economic situations domestically and internationally are potential risk element that can drastically affect the business (Weber J, Weber A and Weber W, 2016). These include higher rate of interest, high or low prices in petroleum products inflation, deflation and higher electricity prices. The overall slowdown in the economy can drastically influence the consumer demand that may lead to a reduction in net sales (Weber J, Weber A and Weber W, 2016). The other risk element identified by the firm is the inability to respond timely to changes in consumer trends and preferences. It can negatively influence the relationship of the firm with its customers, demand for their product and services and the market share.
The third risk factor for the firm is strong competition from other retailers and wholesale clubs (Cooper and Wheeler, 2014). These have the potential of drastically influencing their financial performance. The fourth risk factor is an operational risk; it can come from the occurrence of a disaster, drastic alternation in climate and political conflict (Cooper and Wheeler, 2014). If those events were to occur in countries why the enterprise has subsidiaries, it would affect their operation and financial position. The fifth risk factor is a risk from suppliers who provide the products and services. The firm needs suppliers who provide quality services it is a challenge to get them especially from outside the U.S (Cooper and Wheeler, 2014). The other risk factor is from the unsafe product; it can lead to loss of trust by the customer and reduce market share. Overall home depot stores face risk from various corners; it is crucial for them to reduce the risk and increase financial performance.
