Viability of doing business in Brazil Assignment

Viability of doing business in Brazil - Assignment Example Global business competitive has taken a new twist where it has moved from inter-organisational competition to inter-country competition, and this is the observation of Accenture (2007). Clearly, there is so much justification in this observation with empirical records of economic growth of some major emerging markets, particularly those classified in the BRIC, namely Brazil, Russia, India and China. For example, Brazil’s trade investment is said to have jumped as up high as 50% in recent times. This report therefore looks into important factors that make Brazil viable for market expansion into that country. Any inconvenient factors shall also be outlined for further recommendations. Demographic Data of Brazil Brazil is a highly populated country with a population growth that continues to grow by the years. As of 2008, the PNAD had pegged the population of Brazil at 190 million people with a male to female ratio that is quite close, which is 0.95:1 (Kanter, 2008). Brazil benefi ts from a higher urban population which accommodates 83.75% of the total population of the country. Characteristically, business and economic development in that country is centred in the urban areas. Because of the higher urban population, this obviously means that there is a very active trade and business activity in the country that makes labour cheaper than compared to other developed countries (Colquitt, Lepine & Wesson, 2013). Quite unusually, there is less population concentration in the two most extensive regions of the country, which are the Centre-West and the North regions which have only 29.1 million inhabitants even though they encompass 64.12% of the country’s territory (Chen, 2008). Economic Variables Statistics from the World Bank and International Monetary Fund gives Brazil some of the most favourable economic ratings in the world and among their peers in the BRIC. For instance Brazil is ranked as the world’s 7th largest economy at market exchange rate s and representing Latin America’s largest economy with the world’s 7th largest purchasing power parity (PPP) (Hryckiewicz & Kowalewski, 2010). Brazil’s GDP given in 2012 by the International Monetary Fund was $11,875 which is contributed by a mixed economy. The mixed economic nature of Brazil’s economy is a major boost for all investors and entrepreneurs around the world who want to expand to that country, giving the assurance that there exist multi-variant areas in the economy where they can do business in. There is however exchange rate disparity with some of the world’s major currencies compared to the Brazilian Real, which gives exchange rate risk to most companies (Colquitt, Lepine & Wesson, 2013). Socio-cultural environment of Brazil Socio-culturally, Brazil operates a very open ended environment where the people are very open to socio-cultural changes and adjustments. Even though there are generally the high class and low class divisions, t he middle class seem to dominate the socio-cultural environment, helping to foster evenness between the rich and the poor. Popular culture has its roots in the socio-cultural make up of Brazil with so much dominance of this focused on sports following (Accenture, 2007). There are several social activities and programmes that bring people together such as naming ceremony, marriage, funeral, and parties. The reason for these socio-cultural characteristics could best be linked to the abundance of tourism in the country, which is patronised by both natives and foreigners. For the company, this will come as an advantage because it makes the people more spending focused and thus willing to do business without really thinking of spending as a waste (Pelle, 2007). Political-legal factors As part of a national consented effort to make Brazil an attractive global destination for doing business, there are several government interventions and programs that are aimed at making the country