Country Evaluation On Brazil

This statement is a country research on Brazil, it will provide a variety of analytical insight of the various tourism opportunities available for Global Contacts pursue as it looks for to increase its operations in an overseas market. The main objective of the report to the assistance the planks of directors of Global Contacts make sound to decisions as they prepare to choose their next overseas market This survey analysis the political, economic, sociable, and technological framework of Brazil. The survey provides a alternative view of Brazil current and future investment opportunities in the tourism sector by executing an examination on critical current and future issues.

Brazil is defined to host the earth cup in 2014 and 2016 summertime Olympics; they are both the biggest occasions in the sporting world which create to substantial investment opportunities for Brazil's travel and leisure sector. Holiday destinations will be loaded due the large number of fans set to go to the country; this is just a suggestion of the iceberg of why Global Relationships should prioritize Brazil as their number one investment vacation spot as they look to expand their chain of Enjoyment World resorts.

Table of Contents

INTRODUCTION

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Source (www. google. com)

Brazil gained its self-reliance in 1822 after more than three centuries of Portuguese colonization maintain a monarchial system of government until it abolished slavery in 1888 (Internationalliving. com ). Brazil is by very good the greatest country in the continent of South America and Latin America region. It's the fifth major country on earth both by physical area and human population with over 193 million people with only the Russian Federation, Canada, USA and China being bigger. (Geography. learnontheinternet. co. uk (2007)

Brazil is on the eastern aspect of South America and it is bordered by the Atlantic Sea on the east and on the western by Andes Mountains. Brazil is on either attributes of the Equator with part of the country in the north hemisphere but most part of the country is in the southern hemisphere. The united states is made up of one federal district which hosts the administrative centre city of Brasilia and 26 other areas (Brazil. angloinfo. com (2010). The primary spoken vocabulary in Brazil is Portuguese but there other indigenous dialects and dialects spoken in Brazil rendering it a country of combined races with a rich culture and unique history.

Over the years Brazil has achieved exceptional monetary success making one of the fastest growing economies on the globe (www. prlog. org (2007). Because of economic transformation from a less developed country to a fresh industrialized country Brazil is becoming one of the most notable destination of international investment particularity in the travel and leisure, property and energy sector

More information about Brazil make reference to Appendix 1

PEST ANALYSIS

Political Environment

The political environment of an country can either influence business favorably or adversely, depending to the on the prevailing situation in a country. The politics environment forms the exterior factors which can be part of macro-environment that is beyond control of the business. The factors are the way politics are conducted in a foreign country, which directly reflect on how the united states is governed and the policies adopted

Brazil is a federal republic consisting of 26 areas and a national area. The 1888 constitution gives broad capabilities to the federal government, which comprises of legislative, judicial and professional arms of authorities. The president retains office for four years, with the to contest a re-election for an additional four yr term and appoints his own case. (Globaltrade. net (2011) Brazil being truly a democratic country is it has enjoyed political stability for quite some time and this has been the cornerstone of the recent monetary growth attracting attention from overseas investors. Corresponding to (Keith Martin Rio de Janeiro structured director of international trade and investment with Aon Risk Alternatives) many countries are attracted to spend money on Brazil as a result of business environment is more familiar than other countries such Russia, India, and China. Kieth Claims that Brazil has an improved stable community and private sector and a better proven legal; framework than other countries such Russia, India and china.

Brazil has emerged as one the top destination for international investment due its political satiability, this has created self-assurance in buyers because buyers want to invest their money where it is safe and their house is safeguarded. A democratic Brazil has given traders the freedom to freely setup businesses in Brazil as the government claims to keep their interest at heart thus allowing business to thrive.

However despite Brazil being truly a politically secure country their various concern Global Associations should to take note of has it plans to increase it string of Pleasure World Resorts. Global Relationships would need to face advanced of bureaucracy and insufficient transparency of rule making Brazil a difficult country to carry out business. Brazil has one of the best levels of problem and bribery making the legal process of registering a new business more difficult and costly. Many businesses that contain rushed into buying Brazil without conduction proper research have closed shop to due high level of corruption that lead increases operational costs influence profits.

Another point Global Cable connections should be aware of is the high costs of labor and taxes enforced by the Brazilian federal government. Corresponding to Carlos Caicedo "the tax system is antiquated and is continuing to grow into a monster, numerous layers of taxes" this might have a negative aftereffect of Global Interconnection business efforts" as final result it'll be difficult to comply with the tax guidelines making it difficult to make clear taxes forecasts. Also there exists a large casual job market which as lead the Brazilian government to enact labor regulations that favors worker protection under the law. This distorts the labor market by empowering with staff better barging electric power therefore increasing the minimum wages

Despite the negative attributes of the politics environment in Brazil, recently the federal government of Brazil has undertaken some positives actions to attract foreign investment. FDI flows and companies have greatly increased over the past 15 years, making the united states the largest number for foreign investment in South America and secondly and then china among the expanding countries. (Mia, I. et al. (2009)

In recent years in a bid to appeal to FDI in the tourism industry, the Brazilian administration announced it could exempt jobs in the tourism sector from the lately passed three 12 months secure. The exemption is a measure considered by the Brazilian government to encourage international investment in the hospitality sector. This an opportunity Global Cable connections could bank to open up a new Joy World Hotel as their could indicate high return on investment of the company

Economic Environment

Brazil rating 57. 9 on the freedom score, making its economy the 99th freest in the 2012 Index to perform business. Brazil is one of quickest growing economy one of the producing countries and with money from the globe Bank; the united states is becoming increasingly an integral players in the world economic market. The united states is largely characterized by development in agricultural sector getting into the category of the newly industrialized countries on earth. The country has steadily enhanced macroeconomic stability, conditioning foreign reserves, lessening its debt, lowering it inflation and also trying to accomplish fiscal dependability (CIA World Simple fact book 2010)

The following are several monetary explanations why Brazil offers investors a prosperous future for investment and why Global Connections should prioritize it there number one investment destination.

Capital Growth

Brazil is categorized as a fresh rising property market, which puts potential information at their highest at present. Within the last five years, the property market in Brazil has done remarkably well which includes seen increases as high as 20% in earnings (Propertyshowrooms. com (2003)

That being said now could be the befitting companies in the house market to invest in Brazil. Property awards are low and are arranged to rise in the near future as there exists anticipated increase spending in infrastructure development as Brazil blueprints host two of the largest occurrences in the wearing world, the 2014 World Cup and 2016 summer months Olympics. Global Associations should look into getting a cut of the action because with event like the world cup in 2014 Brazil is expected to experience tremendous development in the travel and leisure sector as result this provides an opportunity that Global Relationships with is Pleasure world resorts cannot afford watch to pass by.

Booming Property Market

Many areas are being altered into top quality resorts with increased shelling out for infrastructure spending to boost the tourism industry. Brazil success in travel and leisure is creating an enormous demand in the hospitality sector such as accommodation. Global relationships should act early so as to gain purchasing great buy of properties with the potential of creating good rental produces.

Currency Exchange

The Brazilian currency has in the recent time gain earth and stabilized to be far more competitive with other major world currencies such the US dollar. Because of this this has increased the purchasing electricity for foreign investors in Brazil. Along with the competitiveness of currency exchange it does mean companies like Global Links that has been successive in the Malaysian market can easily set bottom in Brazil and also operate at a lower cost, therefore increasing profits and production.

Current exchange rates prefer Brazil, which makes it one of the very most conducive and viable investment market for investors looking at buying property and avoid losing large amount of money in their exchange rate ventures contrary to the Brazilian real

Inflation Rate

After the elections in 2003 inflation dropped to 16% now inflation stand at an all time low around 5. 7%, highly giving an indication of a robust and secure overall economy to invest in (Propertyshowrooms. com (2003). Brazil's financial success, development and low inflation could to lead to a predicament where the central loan company adopts a economic policy of cutting down interest rates. Therefore would spur development in the house market and heightens spending since it would decrease the cost of borrow making loans cheaper for both Brazilian resident and traders.

Social and Cultural Factors

Cultural Characteristics

Brazil has several local differences and even though the residents are united by one vocabulary, some areas are so diverse form the other person that they may be easily mistaken to be from another country. The Brazilian society is made up of a multicultural combination which includes Africans, Europeans, and Native North american which form the majority of the Brazilian culture. This affects culture behaviors and patterns in population (Noble J. , Chandler G. , & Clark G. , 2008). Nova, carnival and samba include some of the popular abundant culture and history.

Hofsted recognized 5 cultural sizes that may be used as indications to give information into different ethnicities. Using the Hofsted cultural proportions we can identify how values in Brazil are influenced by culture. The five ethnical dimensions are Ability Distance, Individualism, Masculinity, Uncertainty Avoidance and LONG LASTING Orientation. These five Hofsted ethnic dimensions could also be used to compare two different civilizations. For instance Malaysian culture and Brazilian culture

Uncertainty Avoidance

Brazil is mainly characterized by its high uncertainty avoidance which ultimately shows that the Brazilian population has a low level of tolerance for uncertainty. The strict regulations, policies and rules implemented help decrease this level of doubt (international, 2010). The primary goal of the overall population is to control everything in order to eliminate the sudden. As effect this higher level of doubt avoidance reveals that the Brazilian world is not willing accepts change and is also very risky and diverse. (Meuleman & Roeland, 2006)

Long Term Orientation

The Brazilian people tend to be more patient and tolerant to problems in the short term because they mainly target more on the near future consequences of these action of today. This implies change will take a long time to happen in these societies and business relationships' might take awhile to build up more specifically for foreigners. Therefore Global Relationships should under consideration when building relations with business partners.

Individualism

The brazilin world is a far more collective culture since Brazilians commit to a group ranging from family members to work mates. Also the Brazilian population has high level of loyalty and offer utter most admiration with their leaders

Masculine/feminity

The Brazilian modern culture leans towards being truly a more masculine modern culture, as women expect men to be the breadwinners and the mind of family. Inside the Brazilian society boys are not expected to weep and girl expected to be well behaved and not fight in public. However despite the men being viewed up in the brazilin society women play big in role the governance of the united states as women are elected in general elections.

Technological Environment

According to a written report posted by World Economic Website Brazil has advanced slightly in framework of its use within of ICT in the digital economy. Also the lasted Global information Technology Report now rates Brazil 56th out the 138 economies worldwide (itdecs. com (20120). However not surprisingly ranking Brazil's shelling out for public infrastructure has face a major problems due the fast economy advancement the united states has to deal with electricity shortages and dark-colored outs which have only reduced from 10% (1960-1980) to only 3% today. This could have a poor impact on business functions by increase costs as business might have to use other ability options such as generators to ensure clean running with their businesses

Companies like Global Contacts could consider take up these opportunities of providing energy solutions in future to the Brazilian people if they're able to meet the legal requirements.

Mode of Admittance - Foreign Direct Investment (FDI)

Foreign direct investment is an activity of using an overseas property or manufacturing facility through buying plant, equipment and labor in the mark market. Direct investment can be made through

Greenfield entry that involves establishing a new business entity from scratch

Brownfield entry which involves acquiring an already existing business entity

Joint Venture requires partnering with the local entity or a international entity in the same occupation.

The main benefits of FDI include

More control over international operation

Offers better safety for firms FSAs

Better knowledge of web host market, easier and quicker to change product for market and react to make changes

The drawbacks of FDI include

High cost involves inventing a huge amount of capital to set new property

Increased contact with economic and political risk

Global Connections being truly a Malaysia company that has enjoyed success in the Malaysian market for the past 15 years and with the current monetary situation and property market in brazil, foreign immediate investment trough a Greenfield accessibility approach is among the best suited function of accessibility for the business This would supply the company the possibility to identify an idea location to set up a new 5 star Resort in one of Brazil's most populous vacationer destination. Locations such Salvador (brazil's second most significant tourist destination for international tourists) is actually a ideal spot to create a resort as this might enable Global Associations earn good return on investment and maximize revenue at the same time. This option would give Global Interconnection the full possession of the property meaning that the business can choose the design of their new holiday resort to meets their long-term tactical goals. However just as much this venture might be require heavy capital expenses at the start the permanent benefits outweigh the costs

Conclusion and Recommendations

It would be a wasted opportunity for Global Contacts to disregard Brazil as their next investment vacation spot as the united states has enjoyed gigantic economic growth recently and its destined to prosper soon, the country also has more political stable economy which freely welcomes foreign immediate investment therefore Global Connections shouldn't be afraid getting rid of its investments credited to politics instability

If Global Links was to made a decision to spend money on Brazil in their future growth plan it should you should think about the Island of Salvador as their number 1 location in Brazil as the Guardian newspaper declared Porto da Barra Beach in Salvador as another best beach on earth with an friendly to the environment and sustainable environment provides stunning opportunity.

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