Pestel Analysis

PESTEL Analysis

The PESTEL analysis contains the analysis of Political, Economic, Social, Technological, Environmental and Legal environments of a country with reference to a particular object. The PESTEL analysis of The Home Depot Inc. is as follows:

Political

The company effectively takes part in the political activities for the best interest of the company and its customer for the policies that can affect their business activities. The decisions and policies of the government at state and federal level can have a great impact on the profitability of the company. It complies with all the legal and other requirements necessary for making political contributions and interaction. It encourages the company employees to take part in the political process but it do not in any way permit them to use the company resources for their personal political matters. Home Depot has established a political action committee called Home Depot Political Action Committee (PAC) for making political contributions to the officials supporting the company and its business line (Home Depot, 2008).

Economic

Improvement in the economic condition of the country is crucial for a retailer like Home Depot. Many people are positive about the improvements in the national economy. The stock market, represented by the Standard & Poor's 500-stock index, is up more than 30% in three months (Steverman, 2009). The fate of the company is associated with the economic conditions of United States. The economic downturn has limited the people from making huge spending on these items. The related market is decreasing leaving its impact on the businesses and revenues of the companies' associates.

Social

The company has launched various societal campaigns to promote education, safe working practices and jobs assurance to the people. The company has established a foundation called the Home Depot foundation. This foundation which has invested millions of dollars in communities across the country to leverage the living standards of the people by providing affordable options for living and working in the healthy environment (Home Depot Foundation, 2011). The Community efforts of the company focus on four key areas: ³building and refurbishing playgrounds; ensuring the safety and accessibility of community gathering spaces, building and refurbishing affordable and transitional housing; preparing communities for emergencies'(Home Depot, 2011).

Technological

The role of technology in the success of any company in today's markets cannot be over looked. The company made huge investments in the previous year to upgrade the technological equipment to facilitate its employees and smooth operations