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This essay contains the evaluation of the business opportunities and recommendations for the marketing strategy for a firm that manufactures large home appliance and considers entering the market in Brazil.
The physical characteristics of the country
Brazil is the fifth country in the world by the area and by the population (198,739,269, Jule 2009 est.). It is located in the Southern America and boarded mostly by Atlantic Ocean. Besides it has land borders with the most countries of Latin America. The climate is mostly tropical, though in the south part of the country it is more tempered. Among the natural and energetic resources in Brazil the main resources are bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, uranium, petroleum, hydropower, timber. The greatest river of the world Amazon flows in Brazil, and the most part of Amazon jungle is located on Brazil territory. The main natural hazards are: recurring droughts in northeast and floods and occasional frost in south.
Political climate of the country
The political climate in Brazil is generally mild nowadays. After the century under the governing of militarists the military regime peacefully ceded power to civilian rulers in 1985. Since then Brazil is the federal republic, which doesn’t know the sudden political changes. It adopted the legal system on the base of Roman codes. Current head of the executive brand is President Luiz Inacio Lula da Silva, elected 2003, re-elected 2006. The legislative branch is presented by bicameral National Congress. Brazil has multi-party political system, along with political parties the influential political forces are labor unions and federations; large farmers’ associations; religious groups including evangelical Christian churches and the Catholic Church.
Choosing the strategy for entering the Brazil market it is worth mentioning that Brazil economy is the most fast-developing in the region and even the recent financial turndown didn’t cause the stagnation of the economics of Brazil. Every year Brazil is expanding its presence on the world markets. Brazil is the great outlet and at the same time it’s the promising country for the investment. The status of the country with the developing economics allows supposition that the market segment of the large home appliances in this country is far from saturation. The electronics and electrical equipment are among the most demanded imported goods. That’s why the strategy of direct investment is reasonable on entering this market.
Specific recommendations for implementing the strategy
The Brazilian market is seeking for the foreign investments but it is necessary to remember that it is regulated with FDI regulatory regime. This regime limits the most of country’s export and outlines standard sectoral limitations.
It is also necessary to remember that the growing economic means the growing investment competition. Foreign investments come to Brazil from the most developed industrial countries, from the countries of Euro union to the United States and Canada. The best strategies in Brazil require the short-term capital investments and frequent reviews of investment strategies.
The huge area of Brazil, the number of its population, the abundance of raw materials along with tempered climate and rather stable political system makes Brazil very attractive for the foreign investments, so the strategy of direct investments would be the best choice. However it is necessary to remember about the specific features of local legislation and market regulating laws.
OECD reviews of foreign direct investment: Brazil, Part 62. By Organization for Economic Co-operation and Development. 1998.
Herbison, Ian “Foreign Direct Investment in Brazil – Navigating the Labyrinth.” Foreign Direct Investment in Brazil – Navigating the Labyrinth. 8 Dec. 2009