Environmental Analysis Of Brazil Marketing Essay

Environmental Analysis Of brazil-nut tree nut Marketing Es positDAIM Co. is the company that has been operating successfully for the past 15 years providing and manufacturing information processing system and calculating machine devices and considered as the commercialise leader in the Malaysian market. Due to the tall competition in the market, the manager of DAIM Co. intends to persuade companys BOD (Board of Directors) to penetrate brazil-nut treeian market. The chief(prenominal) idea of the business is to sell computers and computer devices in brazil.The main purpose of this assignment is to perform environmental analysis of Brazil, to identify possible opportunities and flagellums, and to analyze how the environmental factors in terms of goernmental-legal, social, economic and technological environment can affect the international operation functions and decision-making of a business. Also, this research paper provides most appropriate market entry strategy.Selected Pr oduct Computer and computer devicesExecutive Summary flag_of_brazil.png images.jpgGeographyIt is a country that situates in the South America, and innocents largest nation. Borders almost exclusively the countries on the continent except Chile and Ecuador and has exit to Atlantic Ocean that makes country palmy to access by the sea. The surface ara of the country is 8 547 000 squ ar km. Brazil ranks as fifth largest country. The ceiling city is Brasilia, while the most important cities ar Sao Paulo and Rio de Janeiro.Brazils climate is tropical due to the post of the country, with the south being temperate. (Appendix 1, semipolitical Map of Brazil)DemographyIt is the most populous nation in the South America, and worlds 6 country according to population after China, India, USA, Indonesia and Russian Federation. The population of brazil is equal to 190,732,694 people as of August 2010, which is 2.76% of Worlds Population. And the birth rate is 22.65 births per 1,000 populatio ns.Different ethnic groups can be exposit as follows 55% be whites of European descent, 22% are mulattous of mixed European and African Descent, 11% blacks and 0.1% Native Americans. (http//www.ibge.gov.br/english/presidencia/noticias/noticia_visualiza.php?id_noticia=1766id_pagina=1 )Economic ProfileBrazil has best economy among all countries in Latin America. Since its independence September 7, 1822 the economy is rapidly developing. And the result by 2010 isGDP (nominal exchange rate) $ 2.1 trillion.GDP (purchasing office parity) $2.194 trillion. (Appendix 2, GDP of Brazil)Annual corporeal evolution (2010) 7.5%.Natural resources Iron ore, manganese, bauxite, nickel, uranium, gemstones, oil, wood, and aluminum. Brazil has 14% of the worlds renewable fresh water.Agriculture (6% of GDP)Productssoybeans, coffee, sugarcane, cocoa, rice, livestock, corn, oranges, cotton, wheat, and tobacco.Industry (28% of GDP)Typessteel, commercial aircraft, chemicals, petrochemicals, footwear, ma chinery, motors, vehicles, auto parts, consumer durables, cement, and lumber.Exchange rate (March 3, 2011) U.S. $1 = 1.65 Brazilian reals.International BusinessTrade balance of Brazil as for 2011 is $20 billion surplus.Exports $202 billion.Major markets of exports are China 15%, USA 10%, genus Argentina 9%.Imports $182 billion.Major providers are USA 15%, China 14%, and Argentina 8%. (http//www.state.gov/r/pa/ei/bgn/35640.htm)PESTLE AnalysisPESTLE is a strategic management tool that provides useful framework to analyze the environmental pressures on Business (Goyal et al, 2009).PoliticalBrazil is a federal republic with 26 states and a federal district. The 1988 nature grants broad powers to the federal government, made up of executive, legislative, and judicial branches.Electing Lula da Silva in the 2002 as the president of Brazil has been described as a milestone, a starting point for secured democratic rule in the nation. This was an important in the establishment of economic no rms and practices for the country the more(prenominal) collectivized pretenses of state-run industry have been rejected, and significant international debt has been incurred to address the social ills facing the country. During the economic crisis in Latin America, the Brazilian economic situation becomes even more important the growth of the Brazilian market has come to bear significantly on the worlds economy.After the election thither have been significant improvements in the political environment, but political wrangling still exists, and a fragmented congress means economic risks still remain.Issues surrounding policy implementation mean that evaluate future reachs from current policies are uncertain.EconomicBrazilian economy is the largest in the South America region country has well developed agriculture, mining, manufacturing and service sector. From 2003, Brazil improved its macroeconomic situation, built foreign relations, reduced internal debt, kept splashiness rate under control. Later during the financial crisis Brazilian economy had a solid performance and its strong and early reco genuinely, including 2010 growth of 7.5%, have contributed to the countrys transition from a regional to a global power. Expected to continue to grow in the 4% to 5% range, the economy is the worlds eighth-largest and is expected to rise to fifth within the next several years. During the administration of former President Lula, surging exports, economic growth and social programs helped lift tens of millions of Brazilians out of poverty.SocialThe large and growing consumer market provides a strong basis for considering market entry. It is unlikely that overall workforce availableness ordain be an issue, given the option of using international labor if requirements cannot be met locally.Labor costs are attractive but there are significant costs on top of basic wages and requirements for additional training.TechnologicalBrazil is a leader in science and technology in South America and in some fields a global leader, such as bio fuels, agricultural research, deep-sea oil production, and remote sensing. U.S. Government, private sector, and schoolman researchers have extensive ties with Brazilian counterparts, and the extent of bilateral scientific and technological cooperation is expanding. The Brazilian Government seeks to develop an environment that is more supportive of innovation, taking scientific advances from the laboratory to the marketplace.LegalThe Legal rules governing business activities in Brazil are basically laid down in federal legislation, but constitution allows Federal Government to legislate on certain matters related to business activities, such as tax, financial and economic issues, liability for environmental and consumer damages. Federal Governments power is limited to enacting basic rules on such issues, whereas States and Federal District have authority to legislate on a supplementary basis, in line with the popular rules laid down in the federal legislation.Brazil offers bighearted business opportunities for foreign investors, in light of its economic potential, its diversified economy and its huge domestic market, now considerably expanded as a result of several international trade agreements entered into with economic blocks and countries the World over.EnvironmentalAccording to the geographical location of Brazil, it is very easy accessible by the sea, this means the country has an exit to the Atlantic Ocean. The raw materials, equipment, and products can easily be delivered by the sea which is not costly comparing to transportation by air.Also, according to the geographical location of the country there is no natural disaster like earthquakes and tsunami, which may wee stoppage of the business.Due to the large size, the climate of Brazil is different, even though the most part of the country is within tropical zone. The climate of Brazil experiments deuce seasons the rainy which is su mmer and dry season which is winter. There is no cold at all, so the climate is partly same as in Malaysia, and it is very suitable for doing business in this country.Market and Segment AnalysisSTP (Segmentation, Targeting and Positioning) is the essence of marketing. (Kotler, 1994, p. 93)Segmentation is theprocessof defining and subdividing amarketinto clearly specifiablesegments having similarneeds,wants, ordemandcharacteristics.(http//www.businessdictionary.com/definition/market-segmentation.html)Demographic Segmentation refers to a wide study of the potential customers (Kotler, P., 2002). It consists of the variables such as age, income, occupation and gender.The below plot demonstrates the age segmentation13-25 years for Education and Entertainment25-65 years for doing business.Segment.jpgThe income level is an important part of segmentation, everyone can afford computers and computer devices, because nowadays there to many types of devices and they vary in pricing. It is available for all levels of users, occupation and gender.Geographic Segmentation is done by dividing people (markets) into different geographical locations. (Kotler Armstrong, 2002, p.252)Here, the main target will be main cities like capital Brasilia, and the most important cities in the country Sao Paulo and Rio de Janeiro.Targeting system is theselectionofpotentialcustomersto whom abusiness wishes tosellproductsorservices. The targetingstrategy involves segmenting the market, choosing whichsegments of the market areappropriate, and determining the products that will be offered in each segment. (http//www.businessdictionary.com/definition/targeting-strategy.html)Mostly computer devices will be selling to the big companies who need computers to operate their business and customers who uses computers that need devices to coordinate their busy schedules and communicate with colleagues, friends and family.Also, high schools, colleges and different educational institutions will be targeted in Brazil.Positioning Strategy stateshow thefirmdefinesitsbusinessor how abranddistinguishes itself, how thecustomerswill benefit from itsfeatures, and how thesebenefitsor aspects will be communicated to the intendedaudience.(http//www.businessdictionary.com/definition/positioning-statement.html)We are positioning our computers and computer devices as the versatile, convenient, value-added devices for doing business, personal and professional use. The marketing strategy will focus on the convenience of doing business, entertainment with access to the internet.Mode of Entry to the MarketThe proposed carriage to enter Brazilian market is through Joint Venture strategy, which is defined as a contractual business undertaking between two or more parties. It is similar to a business partnership, with one key difference a partnership generally involves an ongoing, long-term business relationship, whereas a occasion act is based on a single business transaction.Establishment of juncture ventures is a common practice in Brazil. A major motivation for joint ventures is to pair foreign firms with Brazilian partners to compete in segments of the government procurement market or in other markets subject to government regulation, such as telecommunications, computers and capital goods. Formation of a joint venture can be accomplished through a variety of business entities.Entering a joint venture is a complex, and sometimes, time consuming process. As any type business structure, it holds a good opportunity for anyone to grow and make money tumultuous but just like any other business type joint venture also holds threat to anyone who wants to enter.Porters 5 ForcesPorters fives forces modelis a model which is using to analyze a particular environment of an industry in terms of Competitive controversy, power of suppliers, power of buyers, threats of substitutes and threat of new entrants.Competitive contenderWhen entering to the market, the first thing you h ave to do is to analyze competitive rivalry in the country you going to set your business. If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for customers to move to substitute products for example from coke to water then again rivalry will be high. Generally competitive rivalry will be high if There is little differentiation between the products sold between customers. Actually, there is not so much difference between computer devices sold in different companies. This means the customers will look for those products which have better forest or long life cycle of the product, in other words durability. Competitors are approximately the same size of each other. Those companies who are operating as retailers only, will face a big trouble against big companies. The buyers prefer to work with best, well known companies who provide stability and confidence to them.Power ofsuppliersSuppliers are also essential for the success of anorganization . Raw materials are needed to complete the finish product of the organization.Suppliersdo have power. This power comes from If they are the onlysupplieror one of fewsupplierswhosupplythat particular raw material. If it costly for theorganizationto move from onesupplierto other If there is no other substitute for their product.Power of buyersBuyers or customers can exertinfluenceand control over an industry in certain circumstances. This happens when There is little differentiation over the product and substitutes can be found easily. Customers are sensitive to price. The pricing should not be high, it must suit their expectations. The overall life concerns in Brazil are low, this means we have to identify the prices in relation to the customers, are they able to buy our products. If the prices will be high, the customer will switch to another product or company which is not costly for them.Threat of SubstitutesThis is about the alternative products that customers can purchase over your product that offer the same benefit for the same or less price. Threat of substitute is high when the price of your PC is higher than your competitors price, or when competitors decide to cut the prices of their products. In this industry, we can say that there is high competition, so this can bring to losing customers because customers sometimes are willing to substitute and compare the products or companies itself.Threat of new entrantThe threat of a neworganizationentering the industry is high when it is easy for an organizationto enter the industry.Anorganizationwill look at how loyal customers are to existing products, how quickly they can achieve economy of scales, would they have access tosuppliers, wouldgovernment legislationprevent them or encourage them to enter the industry.Actually, there is high probability that other companies will enter the market and will compete with you in the market.ConclusionDoing business in Brazil may be very profitable to the internationa l companies. All the factors that may affect the business are positively affecting the business. PC industry is developing on Brazil. And there are many drivers to start your own business in the Brazil.International companies have advantage over the local companies, as they are undervalued and in need of restructuring, capital and technology. There is creative and flexible labor force, which is not expensive comparing to other countries. Growth potential of consumer market is very high. Privatization in late stages, inflation is under control in the last 10 years. There is increasing globalization and international trade. Foreign investors are eligible for most available monetary incentives. And established transportation networks such as railways, highways, ports make it easy to operate in Brazil.