Brazil

Country ReportMIS480 OU Fall 2004

Jawan Brooks Gene Lopinski Igor PertrovskiNick ZeiglerKaren Zezula

AgendaGENERAL INFORMATION Physical Area Jawan Brooks

Demographics Jawan Brooks Socio-Cultural Atmosphere Gene Lopinski

Economy Igor Petrovski

Business climate of country and region Igor Petrovski

TECHNOLOGY IT Possibilities in Brazil Nick Zeigler IT industry strengths and weaknesses Nick Zeigler

IT industry Producer Characteristics Gene Lopinski

IT industry Consumer Characteristics Gene Lopinski

E-Commerce Igor Petrovski Sample of IT industries Jawan Brooks Websites Karen Zezula

REGIONAL COMPARISON French Guiana Nick Zeigler

GENERAL INFORMATION

Physical Picture

Basic Demographics Brazil is populous along the coast, less in the interior. The inhabitants are very

diverse with many races and cultures represented. Population

177.062.044 (2003). Ethnic groups

White (includes Portuguese, German, Italian, Spanish, Polish) 55% Mixed white and black 38% Black 6% Other (includes Japanese, Arab, Amerindian) 1%

Religions Roman Catholic (nominal) 80%

Languages Portuguese (official), Spanish, English, French

Exchange rate  Reals per US dollar - 1.954

Labor force 79 million

By occupation:  services 53.2%, agriculture 23.1%, industry 23.7% Unemployment rate:  7.1%

Industries textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and

parts, other machinery and equipment

Socio – Cultural Picture

Brazilians like to create relationships Brazilians, being extremely cordial Business and social circumstances you may hear

this word - jeitinho (pronounced jay-chi-nyo) In Brazil, basic business networking is based on

the family Sense of Camaraderie Dressing up for Business

Economic Picture

Brazil is advanced in agricultural, mining, manufacturing, and the service sectors.

The beginning of September Brazil’s government reported that the nations GDP grew 5.7% beating all median forecasts of 4.5%.

Economic Picture

The three pillars of the economic program Floating exchange rate

Inflation-targeting regime

Tight fiscal policyTight Use of the federal government's powers of spending and taxation to stabilize the business cycle

A floating exchange rate is when a nation's government is NOT trying to manipulate currency prices to achieve some change in the exports or imports

The central bank is responsible for achieving a publicly announced target for the inflation rate

Business Climate of Country and Region

Economy in South America Brazil's economy is greater then all other South

American countries and is expanding its foothold in the world markets

Human Resources Brazilian has high quality managers and a excellent

local labor force that contributes to the success of companies operating there.

Nokia had such confidences in the quality and production of the Brazilian workforce that they adding more than 1,000 workers to its Manaus cell phone assembly facility.

Business Climate of Country and Region

Drawbacks One of the main problems in Brazil is high

duties and taxes. In 2002 import duties averaged over 11%.

Freight hijacking organizations are known for their success in getting goods to market quickly. Hijackers, along with smugglers and counterfeiters supply Brazil's Black market which is equivalent to 40% to 50% of the country's gross national income.

TECHNOLOGY

IT Possibilities in Brazil

Possible industries for investment: Outsourced Technical Support Services

Corporate Help Desk Customer Service/Support Example: Volkswagen Call Center

Outsourced Manufacturing Lower labor costs (but not lowest) Labor skill level higher than less-developed nations Example: Nokia Assembly plant

Not a viable target market for imports: High import tariffs 20% of imports can take up to 30 days to clear customs

IT Industry Strengths and Weaknesses

Strengths: Brazil’s telecom infrastructure used to be considered a barrier

to growth. The aging telecom infrastructure was privatized in 1998. This lead to an influx of telecom-related investment, and Brazil now has a modern infrastructure.

Educated, skilled workforce Central location in South America Many sea ports

Weaknesses: Business laws not supportive of e-commerce Inadequate legal protection for e-commerce transactions Language Barrier

IT Industry Producer Characteristics

Brazil is the leading IT market in Latin America Long-term outlook IT sales is extremely good --

economic expected growth 3.5% annually, next few years

Hardware Market should increase due to private sector’s ongoing modernization of it’s operations

Brazilian governments commitment to providing Brazilians with electronic government, plus expanding computer and Internet use throughout the country

Brazilian government commitment should increase sales and opportunities for suppliers of Servers, Desktop, Notebook, PDA’s and used PC’s in the future

Peripheral Firms should benefit Scanners, Printers, Disk Drives

Demand for High-end data storage should be strong

IT Industry Producer Characteristics

Software market has enormous potential Brazilian Manufacturing & Services need for software

solutions Brazilian Corporate Security concerns result in heavy IT

spending Excellent Market for networking equipment-continuing

expansion International Data Corporation predicts IT Services

overtake investment in computer equipment Brazils acute shortage of qualified IT personnel-Great

need for consultants and system integrators Corporate execs consider data warehousing and IT

security part of their budgets

IT Industry Consumer Characteristics

Brazil has most the PC’s installed and Largest internet population in Latin America

PC use still confined to the Wealthy US market research forecasts Brazilian Internet users will triple

to 42 million by 2006, Yankee Group

Brazil was the 11th largest computer market in 1997, could reach 5th in the near future

Most PC consumers are in Industrial commercial and financial establishments

Small Office/Home Office Market to continue to increase Growth in Government Market & Educational Market

E-Commerce

E-commerce in Brazil has a firm hold in information intensive sectors with little affection by foreign business

The growth of e-commerce in Brazil has been rapid in the last two years; electronic trade grew from 100 million US dollars to nearly 2 billion dollars a year

IT Industries Variety of IT Industries in which to work:

Computer Analysts Programmers Systems Administrators Web Developers Telecommunications

Education Certifications are not mandatory Preference given to college education and relevant work

experience Graduate level degrees preferred by employers for higher

level positions

Brazil Websites Portugese

MSN Mercado Livre = free market

Sandisk SD 256MB $175.00 Reals Exchange rate

US Comparison -- EBay General Motors Brazil Extra.com

English Braslink

In translating its 'Got Milk?' slogan into Hispanic, the US Milk Board would have been best to know that it actually asked people if they were breastfeeding. Ford had a similar problem in Brazil when the Pinto flopped. The company found out that Pinto was Brazilian slang for "tiny male genitals". Ford prised all the nameplates off and substituted Corcel, which means horse. These, and dozens of other blunders, highlight how linguistic nuances can change the whole meaning of marketing slogans and would have been avoided by using native linguists in marketing translations

REGIONAL COMPARISON

French Guiana v. BrazilFrench Guiana Brazil

General Geography/Information

Population 191,309 184,101,109

Literacy Rate: 83.0% 86.4%

GDP per Capita $ 8,300.00 $ 7,600.00

Mean IQ 87 88

Land Area (sq. km) 89,150 8,456,510

Coastline (km) 378 7,491

Climatetropical; hot, humid; little seasonal

temperature variation mostly tropical, but temperate in south

Natural resources:

bauxite, timber, gold (widely scattered), petroleum, kaolin, fish, niobium,

tantalum, clay

bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, uranium, petroleum,

hydropower, timber

Land use:

arable land: 0.14% 0.14% 6.96%

permanent crops: 0.05% 0.05% 0.90%

other: 99.81% (90% forest, 10% other) (2001) 99.81% 92.15%

Irrigated land (sq. km.): 20 26,560

Natural hazards:high frequency of heavy showers and

severe thunderstorms; floodingrecurring droughts in northeast; floods and

occasional frost in south

Of Note:

mostly an unsettled wilderness; the only non-independent portion of the South

American continent

largest country in South America; shares common boundaries with every South American

country except Chile and Ecuador

French Guiana v. BrazilFrench Guiana Brazil

Technology Infrastructure

Telephones - main lines in use: 51,000 38,810,000

Percentage of population 26.66% 21.08%

Telephones - mobile cellular: 138,200 46,373,300

Percentage of population 72.24% 25.19%

Internet users: 3,200 14,300,000

Percentage of population 1.67% 7.77%

Internet TLD .gf .br