1. Brazil Ordem e Progresso Order and Progress

2. ECONOMIC- GEOGRAPHIC ENVIRONMENT 3. Brazils Geographic Factors Largest country in South America and fifth largest country in the world per area and population Contains Amazon River and Central Highlands The largest river in the world, the Amazon River contains over 4,000,000 sq. meters and takes up over half of Brazils coastline Amazon rainforest contains as many as 3,000 different species in 1 sq. mile and occupies roughly 40% of Brazils total geographical area Rains 250 days per year Rainforest contains 11 of 12 mammals that inhabit Western Hemisphere 1,600 species of birds, 100,000 invertebrates, and 70,000 species of insects Iron Ore is Brazils most occupied mineral Steel, automotive, petrochemical, and utilities are leading industries Leading exports: processed meat, electrical equipment, tobacco, oil, shoes, iron ore raw sugar, and poultry Leading imports: milk and dairy products, beef, cars, electric integrated circuits, car parts and accessories 4. Economy Slightly worse then average economy as ranked by The Heritage Foundation Due to absence of successful functioning legal and regulatory framework Plagued by corruption and lack of protection of intellectual property rights 6% unemployment rate 6.6% inflation rate High inflation rates have been a problem in Brazil for the past decade Government believes increases interest rates to abnormally high rates will lower inflation and fix economic problem in Brazil Plano Real changed currency to the real to try and make fixed exchange rate with the American dollar of 1:1 5. Recommendations Companies should ship products rather then build factories in Brazil Poor regulatory structure makes it hard introduce new companies in Brazil Reduce costs to make product to make product cheaper for consumers Brazilian consumers have fewer disposable income due to high interest rates 6. SOCIO- CULTURAL ENVIRONMENT 7. Overview of demographic Trends Brazil is the 5th most populated country in the world, with a current population of 200,674,130. However, population growth rates are slowly declining as the countrys wealth increases and as it becomes more urbanized. Brazil is currently the 6th largest economy in the world and it is 107th fastest growing country, which generates more consumer spending and growth opportunity for firms from all around the world. In a country this big, there are great chances that different industries will succeed if they can make their products desirable. Brazils population is also very young. 27% of the population is under the age of 15, 62% are 29 years old or younger, and only 7% of the population is older than 65. With a better economy comes a larger middle-class and a significant growth in "new money. Families who couldnt afford basic necessities such as kitchen appliances and cell phones, now have enough money to buy not only that, but a second car and private schools. The number of women entering the workforce and attaining an education has increased significantly. Today, two-thirds of women have a job.They stay longer in school than men, and represent three-fifths of graduates. 8. Cultural factors, Social institutions, and Informal trade barriers Brazilians really like imported goods. Since having such items is a status and power symbol, Brazilian consumers are more than willing to pay high prices for them. They also enjoy celebrating their culture at all times. Not only on Fridays after work, but basically everyday there is a reason to drink and celebrate. Brazil has one of the worlds first sustainable biofuels economies and is the biofuel industry leader. They have flex-fuel vehicles that run on 100% ethanol or 25%/75% ethanol/gasoline blend, or any combination of the two. Brazilians are used to flex-fuel cars and like the way they work, so some consumers may be a little reluctant to switch to a Hybrid since they have been using flex-fuel cars for so long. Some informal trade barriers that may affect the company are for instance the way the company will negotiate with Brazil. Shipping can become a problem. If products arent delivered on time or are damaged upon arrival, the companys image can be hurt. The government may also impose informal measures to favor domestic products over imports by requiring costly testing, standards, and certifications requirements for international products, in order to favor the domestic industry. 9. Recommendation The first step to ensure the company succeeds in Brazil is to have satellite or corporate offices in Brazil and to hire local talent and business school graduates to work in these offices. This will help the company understand the needs of the market and will minimize the cultural differences of having an American company move into a new country. Even though Brazil isnt a conservative country and there are few chances of cultural blunders where someone actually ends up offended by an advertisement, the company still needs to be careful When it comes to food and beverages, costumers are more likely to buy products or services they are familiar with, because they know what to expect. If they see a commercial that shows a cool drink they can make with Bacardi, using ingredients they have at home, they will be excited to try it. With the rising number of educated females in the workforce who need cars and want to be up-to-date with the newest technology, offering girly iPad Mini covers and accessories would be a good way to help sell more iPads to women. Commercials where women are leaving work and getting in their Camrys will make many of these consumers relate and want to buy the car. 10. POLITICAL-LEGAL ENVIRONMENT 11. Regulations, trade barriers, taxes Regulations INMETRO CONMETRO SINMETRO Trade Barriers Brazil ranked 130 out of 183 countries in the World Banks 2012 Doing Business Report International Agreements. High tariffs Uncertain customs system Brasil Maior showed a rise in trade protections Taxes Import Duty Ranges from 10% to 35% Industrialized Product tax (IPI Ranges from 0% to 15% Merchandise and Service Circulation tax (ICMS) Varies between states, around 7% to 18% 12. Intellectual Property Rights In the past, Brazil was very much against foreign intellectual property but have slowly been reforming their laws. 1995, Brazil joined the world Trade Organization and finally came to agreements with international intellectual property laws. Although the Brazilian intellectual rights are coming together, trademarks are still taking too long to get registered which is very displeasing to the foreign company. The president of the INPI, Brazils patent office, has realized that they must protect their own intellectual property to encourage innovation. the Brasil Maior (Greater Brazil) plan, we have seen a rise in trade protections such as tax breaks to benefit local manufacturers, increased tariffs, and local content requirements 13. Recommendations We need a strong local presence in Brazil A great way to do this is through building relations with local distributors Though intellectual property rights and tariffs are becoming more efficient, it is still difficult for a US company to enter a public market in Brazil without the help of a reputable partner Not only do tariffs pose a conflict, Brazil also holds complex customs and corruption in the legal system We need to visit Brazil and make strong relations with local partners and distributors. 14. PRODUCTS/SERVICES RECOMMENDATIONS 15. Products Bacardi Gold Rum IPAD mini 2014 Toyota Camry Hybrid 16. Bacardi Gold Rum Product Description Smooth & Mellow Toasted oak barrels, shaped through secret blend of charcoals By Ron Bacard in 1862 Original Cuba LibreRecommendations Adapt the price of the rum but the flavor should not change Continue to use social media outlets to promote the product 17. IPAD mini Product Description 7.9 inch retina display Up to 4x CPU performance, Up to 8x graphics performance, up to 10 hr. battery advanced wireless ios7Recommendations Make sure product meets standards to comply with the existing technology in Brazil 18. 2014 Toyota Camry Hybrid Product Description 4 Door LE Sedan Continuously variable transmission Fuel efficiency 39/43/41 (mpg hwy/city/combined) 6 Gallons of Gas, Southeast Toyota Distributor PlusRecommendations Ensure its reliability to get consumers from point A to point B Promote eco-friendly concept Additional financing programs or specialized prices 19. ASSESSMENTS OF INTERNATIONAL BUSINESS SUCCESS 20. Economic Benefits Home Country Increase in overall sales volume and market share Increasing economies of scale Accessing inexpensive labor and cheaper production methods Rum: Build assembly operation in Brazil to have greater access to raw materials Hybrid Car: Subsidies and tax concessions from government Host Country Jobs created, provided capital, tax revenue increases, new skills and technologies learned Greater choice of products for consumers Opportunity's for other MNCs to do business in Brazil 21. Social Costs and Benefits Rum Drinking in moderation can alleviate stress and be healthy for the heart Drinking and driving can adversely affect Brazils roadways Hybrid Vehicle Lower toxic emissions and release less carbon dioxide into the environment Cheaper fuel costs Helps fight the growing global warming crisis, and creates cleaner air IPAD More efficiency in a smaller device Reduce amount of paper used in offices and schools Helps small businesses