Analyzing and evaluating alternatives
Lack of market information: The most important point which the company should consider while entering a foreign market is to do an exhaustive market research. Home depot failed to understand the fact why they want to enter China, what is the customer base, how will they market the product and what products they would supply to China. Thus the company should have worker on the how, what and where of marketing while entering a new market.
Do it yourself – do it for me approach: the people of China by nature like their work to be completed by somebody else rather than they doing it themselves. The labor is cheap in China because the people are not at all motivated to do their own chores. It is quite evident that the Chinese people would love to buy a house but they would never be motivated to improve it. Hence once the company knew that they would not be able to sustain with do-it-yourself approach, they would have proactively incorporated the do-it-for-me-approach.
The management team: It is very important for the company to have a proactive and a dynamic management team. They should have deep understanding of the market. The main problem with Home Depot was that it failed to hire a management team for China itself otherwise the scenario would have been different.
No adaptation: Another problem with the company was that they forgot to implement the differentiation strategy. They were offering the same products in Chinese market as they were offering in the American market. They could not succeed in Chinese market because of the lack of adaptation to the new market.
Selecting the preferred alternative
The most preferred alternative would have been to tie up with a local giant and then introduce the Home Depot products to the market. This would have given time to the company to understand the preferences of the local market and then to understand the buying pattern of the masses. The local retail store would have helped the company to customize its products and to promote the products which are as per the preference of the Chinese people.