Firstly, my evaluation on the external environments of discount stores in the U.S in 70S and 80S is as [A right timing for entering but the market was very competitive]. I’d like use couple of frame works to explain my evaluation as following. Let me use the PEST frame work to analysis the Macro-Environment at first. On Politics (Positive for discount retailers expanding) It seems fiscal policy has been heavy on spending on 70S&80S. According to my research, the average spending deficit in this period is around 3% of the GDP and which is a very high level and also trending upwards. Also, the national debt was also increasing from around 1.8 Trillion USD (1975) to over 3 Trillion USD (1985) on this period. I think the government’s focus on growth of the economy must led to massive subsidies to incentivize Wal-Mart’s expansion Also, on the monetary policy point, interest rates throughout this time period (1970-1985) upward form a low under 4% to high of just above 18% as following Chart 1. It was just a good timing for Wal-Mart borrowed money it needed to lease new stores in its initial expanding period, and correlate with its high growth periods from the bank. [pic] Chart 1 Then, on the trade policy, from 1976, the importation of goods surpassed the exportation (kick start trade with China from 1971 and US/China each other most-favored-nation status in 1979) that means for the retailers, they had more selection on purchasing from development country what should reduce their cost price.
On Economy (Positive for discount retailers expanding ) The economy in 70s and 80s was in kind of throe of [ Stagflation ] what means high inflation and high unemployment. According my research, while the U.S economy experiencing severe inflation on 70S and 80s showed as following Chart 2, the unemployment rated exceeded 10% as following Chart 3

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