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Home Depot


            
             • 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.


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1. Home Depot

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