Home Depot is a company in the United States founded in 1978 by Bernie Marcus and Arthur Blank. The Company provides home improvement appliances like power tools, home decorating ideas, patio furniture, carpeting, kitchen remodeling among others.  It operates format warehouses across the US and also on international basis overseas. The company headquarter is based at Atlanta and is popularly known to be one of the biggest competitor in the in the retail market in the provision of the equipment used by many in improving their homes. It is the biggest and the most influential home improvement company not only in America but also overseas.  The company uses the slogan “Do it yourself” (DIY) as it calls for more savings at the same time more of doing it personally. The Home Deport got into the market of China in 2006 based in Shanghai with the same aim of improving Chinese homes using its appliances. During the early years of the company’s initiation in China, it buttressed its satellites in six major cities in China. It had massive and ambitious long term plans in the Chinese market, unfortunately, due to some few cultural complications in the market; it shut some of its companies in large cities including Beijing. The paper provides a detailed description of the cultural issues that were not taken into consideration during the company’s inception in China leading to its failure.

The failure of Home Depot in China is mostly attributed to some complicated cultural mistakes that were not considered at the earlier stages of its establishment in the market.  One of the mistakes done by the Home of Depot is that they did not adopt the local conditions of the Chinese. Local adaptation is one of the very significant strategies to take into account as it helps to understand the habits of consumption by the prospective clients. As known worldwide Chinese are people who would majorly do not go for the readymade products, they mostly make their own or attempt something not approved by many. On the other hand, for them to accept the self- made product, it has to be widely used and accepted by many. They don’t practice the individualism index as in the USA but believe in the high collectivism index. They tend to the widely accepted consumed products, a standard which the Home Depot products had not reached. Besides most of the Chinese citizens who used the home improvement devices did not like the culture of do-it-yourself consumption mode as the outlined by Home Depot. The US citizens were accustomed to using the products like utensils from the company. The company wrongly transferred the same culture assuming that the Chinese were also accustomed to using the kinds of utensils they made which was wrong. The wrong perception of the cultural differences between the two nations contributed to the failure of the company in China.

The other cultural power that led to the failure of Home Depot is the failure to adapt to the consuming power of the locals which disoriented its market behavior. Most of the Chinese consumers viewed the Home Deport products to be too expensive to be bought. The company did not spend much time in convincing the customers of the reasons for setting the prices of their goods at the rate they were selling at. After all, it could not work out however nice and quality the products were because; the Chinese were used to their low set substitute product prices. The lack of the study of the local cultural market behavior and the purchasing power of the locals in the various cities led to the failure of the company.

The last cultural factor that made Home Depot lose in the Chinese market is the failure to make a prior proper social relationship with the locals. Guanxi is a significant factor according to Chinese culture that influences market entry, performance and international expansion in China. These local officials form the power of business decisions in China thus improving the performance and continual businesses in China. The management of the Home Depot was oblivious of the fact thereby neglecting them. This big mistake done made them dominate a smaller coverage of the market hence disadvantaging the company existence in the market.

If I were the manager of Home Depot, I would have done the following to resolve the errors made before quitting the market. I would have improved the customer relationship and communication to understand the market well and those who are involved. I would also apologize to the Guanxi and upon agreement affect them in marketing my products. The action would have helped me understand that there exists a considerable difference between the culture of the USA and the Chinese citizens. I would also have resolved to reduce the prices of my company’s goods to attract many customers. After the increase, the price gradually after getting a large market who understands the quality and importance of my products over others (Kotler, Philip & John, p 116). I would resolve to put joy in the face of the citizens through giving after sales services, free installation of the gargets to the few who purchase the products to attract more people. Finally, I would resolve to indulge the company in public issues and fully participating in public events. When I join them in most of the cultural activities they do, I will have taken care of the collectivism index they believe in giving me the opportunity to convince any of them. I would have decided to close some stores in other cities with meager sales and only leave one for a new takeoff.

To curb the mistakes before they occur as the manager of Home Depot, I would, first of all, do comprehensive research of the market to understand the culture and needs of the Chinese. To prevent them from hating the do it yourself system because of the low workforce, I would provide them with manpower to furnish their houses.  I would also go to the extent of providing free education and training to those willing to do them themselves to encourage others that they can always do it themselves.

To sort the issue of the claims of the product being expensive, I would use the criteria employed by IKEA Company which still exists and doing well in China. By offering the customers a reduced cost of the assembly service (Zikmund, William, et al.,  p 72). For the customers who need the lowest possible prices, I would do it with the condition that he does the fixing himself and not the company doing him. To gain a broader coverage of the market, I would have involved the Guanxi from the inception of the project. They would help me do the marketing hence increasing the company’s stake in the market and also give them a significant time of investing. In conclusion, to prevent the tremendous loss of the company as the manager, I would have tested a single warehouse extensively rather than opening more stores in the city so quickly. This would have helped me strategized so well with time to expand gradually with the few products and satellite that did well.

 
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