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How Has E-Business Affected Home Depot?

Essay by   •  August 22, 2011  •  Research Paper  •  798 Words (4 Pages)  •  1,875 Views

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With the emergence of the internet, businesses have found that in order to compete and increase revenue they must expand into a new segment of the market. Home Depot is one such organization that has expanded its business into the e-commerce market. E-business has become a valued part of Home Depot's business strategy and has many advantages over the traditional business plan. There are also some limitations and risks that affects Home Depot when doing business over the internet.

How has e-business affected Home Depot?

Home Depot was a traditional business that started in 1978 by Bernie Marcus and Arthur Blank. There first two stores were opened in 1979 and has since became the fastest growing retailer in U.S. history. "Home Depot currently operates 947 stores in 45 states, five Canadian provinces, Puerto Rico, and Chile." (Wire, 2011) Home Depot totally ignored e-commerce for years until it huge an earnings slump in 2001 due to competition and a uninspiring internet business model. Since then Home Depot has greatly increased its e-commerce efforts and has "generated e-commerce sales of $500 million in 2009 and is No. 39 in the Internet Retailer Top 500 Guide" (Internet Retailer, 2010) E-business has made Home Depot focus more on its communication with its customers and allowed them to focus more on their needs.

The advantages of using the Internet for business activities

Home Depot is improving its productivity and efficiency by taking advantage of all the benefits from using e-commerce. The first of these advantages is being able to reach a greater audience. Home Depot is now able to reach potential customers across the world without having to physically construct stores in various areas. The internet allows their customer base to reach nearly anyone with a computer and an internet connection. The second advantage of e-business is that it lowers the expenses of marketing and promotions for Home Depot. The internet allows Home Depot to market its good and services worldwide at a much lower price. E-business permits Home Depot to reach multiple markets nationally and internationally at much lower cost. Another advantage of using the internet for business at Home Depot is that purchases can be made around the clock and everyday of the week, making it convenient for any customer regardless of the time. E-business is a huge advantage to Home Depot and any organization. It leads to increased revenue, increased productivity, lower business costs, and improved customer service.

The limitations of using the internet for business activities

Although there are several advantages of using the internet for business, there are also some limitations that Home Depot must handle.

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