Brazil is a South American country with a population of more than 200 million, and it is the fifth largest country in the world. In Brazil, only 10% of the population live inland and over 90% live in coastal areas, particularly along the east coast strip that is approximately 500km wide and makes up only a quarter of Brazil’s total area.
Brazil’s per capita income (2018) is estimated to be $ 15,242 (The Heritage Foundation, 2018). Its major trading partners include China (exports 41.2%, imports 34.2%), the USA (exports 26.7%, imports 32.4%), Argentina (exports 18%, imports 16.4%), Netherlands (exports 15%), Japan (exports 8%, imports 1.1%), and Germany (exports 7.3%, imports 14.2%) (Farah, 2013). From 2008 to 2017, Brazil’s ease of doing business averaged 121.60, and it is currently ranked 125/190 (Trading Economics, 2018). Brazil has low domestic production and high non-salary labour costs, with an inflation level of 8.7% CPI (ExportGov, 2017). The government enforces intellectual property, though with persisting challenges.
Industry – Market Opportunity Analysis for your products and/or services
Brazil is Florida’s major international partner, and in 2014, it made a total of $21 billion in both imports and exports. Brazil’s economy is the largest Latin American economy, with US$24 trillion. The country has massive investment and business opportunities in the fields of IT, logistics, aircraft parts, defence and aerospace, agribusiness, energy, hospitality, education, electronic parts and health care (Brazil-Florida Business Council, 2018). Now, the new product that I have identified based on Brazilian industry and market analysis is the distribution of affordable computer software and hardware targeting the IT sector. According to the 2017 Gartner projections, IT services would increase by 6.3 per cent to reach US$17.3 billion (ExportGov, 2017). Additionally, the IT market in Brazil was projected 2017 to grow by 2.5 per cent, making it one of the most viable opportunities.
Market entry strategies for Brazil
The Brazilian business environment currently faces numerous challenges, including the high cost of business operations, uneven income distribution, and a commodity-driven economy, among others. These challenges create obstacles that make it difficult for potential foreign investment to enter into the Brazilian market. However, if a potential investor visits Brazil to get to know the insights of the local market, he would have a better view of the best market entry strategy to use (Masterclass Brazil, 2014). But, going by the latest Brazil rank of 129/190 of ease of doing business there, a new foreign venture will have it difficult to compete with other firms. The current business trends in Brazil lie in personal relationships with the locals (ExportGov, 2017). For a company willing to enter into the Brazilian market today without facing many obstacles, the best strategy would be to enter into a joint venture with a local company that has already established itself.
Summary
There are some interesting facts about Brazil that one needs to know. They include the following. Brazil’s major cities, including Sao Paulo, have some of the worst traffic jams in the world; “Silva” is the most commonly used surname; the country has in excess of 4000 airports; it has the largest garbage dump in the world (Smith, 2017). There are also risks, challenges, and threats to doing business in Brazil. First, the government favours and protects local companies, making it difficult for foreign investments to thrive. Again, due to its large size and the fact that most of the population lives along the coastal strip, there is an imbalance of economic distribution, creating limited opportunities outside major cities (Wade, 2013). The presence of large informal settlements in the cities limits the sales potential of highly competitive firms in major Brazilian cities. Strict liability rules are also a big concern for businesses in Brazil.
References
Brazil-Florida Business Council. (2018). Doing Business in Brazil. Brazil-Florida Business Council. Retrieved from http://www.brazilfloridabusiness.com/business-in-brazil
ExportGov. (2017). Brazil – Information Technology – Computer Software and Hardware. The International Trade Administration (ITA). Retrieved from https://www.export.gov/article?id=Brazil-Information-Technology-Computer-Software-and-Hardware
ExportGov. (2017). Brazil – Market Entry Strategy. The International Trade Administration (ITA). Retrieved from https://www.export.gov/article?id=Brazil-Market-Entry-Strategy
ExportGov. (2017). Brazil – Political Environment. The International Trade Administration (ITA). Retrieved from https://www.export.gov/article?id=Brazil-Political-Environment
Farah, A. G. (2013). Largest Trading Partners of Brazil. The Brazil Business. Retrieved from http://thebrazilbusiness.com/article/largest-trading-partners-of-brazil
Masterclass Brazil. (2014). Market overview Brazil. Masterclass Brazil. Retrieved from http://masterclassbrazil.com/market-overview-brazil/
Smith, O. (2017). 30 amazing facts about Brazil, home to a hidden mountain and a ghost town in the jungle. The Telegraph. Retrieved from https://www.telegraph.co.uk/travel/destinations/south-america/brazil/articles/brazil-fascinating-facts/
The Heritage Foundation. (2018). 2018 Index of Economic Freedom. The Heritage Foundation. Retrieved from https://www.heritage.org/index/country/brazil
Trading Economics. (2018). Ease of Doing Business in Brazil. Trading Economics. Retrieved from https://tradingeconomics.com/brazil/ease-of-doing-business
Wade, J. (2013). The Risks and Opportunities of Doing Business in Brazil. Risk and Insurance Management Society, Inc. Retrieved from http://www.riskmanagementmonitor.com/the-risks-and-opportunities-of-doing-business-in-brazil/
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