• Opposition in locating large stores from small community groups due to legacy of crime, traffic, and safety violations purported.
• Environmental concerns.
• Bad Publicity.
1. Political - Legal Forces.
Opportunities:.
• NAFTA defines trade regulations in North America.
• Chile has a stable government and economy and is annexed into NAFTA.
• Lobby state legislators to lower tax rates and to increase exemptions.
Threats:.
• Sexual harassment, and discrimination lawsuits.
• The company currently expects the effective tax rate to increase to 39.3% in fiscal 1998, due to higher effective state tax rates and a reduction in tax-exempt interest income as investment balances decline.
2. Economic Forces.
Opportunities:.
• Real GDP rose 3.9% in 1997 and Standards & Poors is projecting another robust advance of 3.4% in 1998.
• Disposable personal income rose 4.7% in 1997 and Standards & Poors is projecting that disposable personal income will increase 4.1% in 1998.
• Strong U.S. economy and growing consumer confidence.
• Chile has a stable economy and government, growing middle class population and developed D-I-Y market.
• Low level of unemployment.
• During 1997, existing single-family home sales reached their highest point on record.
• New single-family home sales showed strong increases from the previous year.
• DYI industry exhibited a demand pattern that was largely recession proof.
• Home improvement spending has declined in only one recession during the past 20 years. .
Threats:.
• An increase in interest rates will result in fewer sales of major home appliances.
• Mexico does not have a stable economy and government.
• Varying degrees of seasonality in Professional Contractor market.
• Recession with an increase in emphasis on the contractor market.