Investors willing to investigate the market should make note of what points are best for entry and exit in the market in order to maximize profits (Redig & Price, 2003). Local money is primarily credited with driving the growing economy, and as the authors point out the Brazilian economy is "no less risk averse" than any other country (Redig & Price, 2003).
Though there is risk involved with investing in Brazil (as with anywhere) the potential for rewards is also tremendous, as evidenced by Telecom Italia Mobile and LG Phillips, both who invested several hundred million in the company and are now well positioned to capture millions of additional customers (Redig & Price, 2003). The key to business success is simply market entry timing, and best practice observations from competitors has been cited as the answer to investor problems and concerns (Redig & Price, 2003).
Effects Conditions Business Operations
There are many business conditions that are considered specific to the country that foreign investors and travelers should be aware of. For one negotiation's in Brazil are generally considered very slow and much more personal that business interactions conducted in the United States (CC, 2004). Brazilian business is often conducted in Portuguese, the primary language of the nation, and executives often need an interpreter to conduct business (CC, 2004).
Customs tariffs currently exist, however the nation's president is currently working to establish a Free Trade Area to reduce the tariffs and increase market access particularly for U.S. exporters (Kullman, 2004). The GDP rose in 2002 and then remained stagnant in 2003, but in early 2004 once again grew approximately 2.7%, suggesting a lucrative market (Kullman, 2004).
The currency in Brazil however is considered weak and at this time Brazil does little international business with countries other than the U.S. (Kullman, 2004). In order to conduct business successfully...
All of these may be considered obstacles to an effective and productive business relationship with Brazil.
However, if companies are competitive and looking to overcome these obstacles, there are many opportunities for growth, in a country with more than 40 million consumers interested in new and advanced products.
Conclusions/Analysis
The business climate in Brazil, given that it is one of the largest economies in the world, should be considered positive. There are many opportunities for growth in the country, and the nation's leader has expressed an interest in expanding business opportunities as well as eliminating some potential barriers to successful business endeavors, including high tariffs and confusing or stringent tax laws. Nonetheless, historical evidence suggests that businesses interested in pursuing opportunities in Brazil should carefully weigh the benefits and risks, and time their entry into the market to ensure optimal success.
References
CC Consulting. (2004). "Brazil - Business and Social Etiquette." CC Consulting Limited.
7, December, 2004: http://www.crazycolour.com/os/brazil_02.shtml
Kullman, P. (July-August, 2004). "Opportunities in Brazil." Export America, 5(6). 4,
December, 2004: http://www.buyusa.gov/fresno/brazilmeansbusiness.html
Lomheim, C. (2004). "Doing business in brazil." Thought Software and Consulting. 7,
http://home.earthlink.net/~lomheim/avs/brazil.html
Rideg, T. & Price, J. (2003). "When is it time to go into Brazil? Reading Brazil's business cycle." Tendencias Media Cycle. 4, December 2004: http://tendencias.infoamericas.com/article_archive/2003/040/040_economic_outlook.htm
