Doing Business in Brazil · 10/10/2012 · Brazil is still relatively vulnerable to a downturn in...
Transcript of Doing Business in Brazil · 10/10/2012 · Brazil is still relatively vulnerable to a downturn in...
Doing Business in Brazil Jade Sims Business & International Trade Specialist International Business Center Michigan State University
Jade Sims, Michigan State University
International Business Center Mission: To provide superior education, research, and assistance to businesses, public policy makers, academics, and students on international business and trade.
CIBER * U.S. Commercial Service Affiliate * MEDC STEP Program Statewide Partner & Training Provider * Global
Business Club * International Trade Center * globalEDGE * Michigan Export Growth Program *
Academy of International Business
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Benefits of Trade:
• Interchange of new ideas, technologies, shared platforms, emergence of “best of the best”
• Lower costs, market efficiencies, development of core competencies (95% potential customers/75% purchasing power abroad)
• Main source of economic growth for U.S. (esp. manufacturing)
– exports make up 12.5% of U.S. gdp (11.2% in 2009) – exports make up ½ of the 2.9% gdp increase between 2009
and 2011 – International trade represents _25_% of world economy
• Evidence suggests export-related jobs pay more—18% • For every $1b in US exports, 6,000 jobs are created
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Cross-Border Business Continues to Grow Exponentially
Source: The World Bank World Development Indicators
Shifting Global Marketplace
Percentage share of the world production
Source: The World Bank World Development Indicators
We Need to Have the Ability to View the World through Alternate Lenses…
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…And That Takes Global Competence
• A survey of Human Resource Managers on six continents: global competence is critical to the success of international managers and necessary for professional development.
• Global competence refers to the acquisition of in-depth knowledge and understanding of international issues, an appreciation of and ability to learn and work with people from diverse linguistic and cultural backgrounds, proficiency in a foreign language, and skills to function productively in an interdependent world community (NEA Education Policy and Practice Department, 2010).
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What does the US Export?
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US Exports of Goods
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US Exports of Services
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Growth in US Exports to Top 10
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Welcome to Brazil
Jade Sims, Michigan State University
Jade Sims, Michigan State University
Jade Sims, Michigan State University
Brazil Population 194,946,000
GDP (ppp) per capita $11,210 (2010)
Inflation rate 6.5 percent
Politics & freedom index (1-30=Free, 31-60=Partly Free, 61-100=Not Free)
40
Corruption index (10=least corrupt, 0=most corrupt) 3.8
Country risk rating A4 - A somewhat shaky political and economic outlook and a relatively volatile business environment can affect corporate payment behaviour. Corporate default probability is still acceptable on average.
Global competitiveness (of 144 countries listed 48
Economic freedom index (higher score is better—179) 99
Foreign policy globalization index (higher score is better)
67
Ease of doing business ranking (higher score is better)
126
E-readiness ranking (ranking of 70 countries included) 42
Global services location index (highest ranked country is the most attractive as a potential offshoring destination) 50
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MSU globalEDGE MPI
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Leading Export Market Countries
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Leading Export Market Countries
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Leading Exports from Brazil
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Leading Import Market Countries
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Leading Import Market Countries
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Leading Import Products
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Top US Exports to Brazil
Brazil – Strengths & Weaknesses
• Strengths – Brazil boasts abundant and varied
natural resources and a relatively diversified economy.
– Manufactured products constitute a growing proportion of production and exports.
– The country has increased its economic and financial stability and its capacity to withstand international financial market volatility.
– The policy of preserving fundamental macroeconomic equilibrium should stay on track.
– Brazil's domestic market potential and favorable labor costs have tended to enhance its attractiveness to foreign investors.
• Weaknesses – High cost of credit – Substantial political roadblocks and lack of
official commitment to addressing uneven income distribution, poor public education imbalanced market concentration, and informal economy (limited tax collection), complex & confusing law & tax structure*
– A lack of investment has resulted in deficiencies in energy, rail, road and port infrastructure, with public/private partnerships not yet really effective.
– Brazil is still relatively vulnerable to a downturn in raw material prices.
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OPPORTUNITIES
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OPPORTUNITIES—transportation
• Waterways require upgrading (13% usage vs 25-35 in North America)
• High logistics costs
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OPPORTUNITIES—agriculture
• Agricultural equipment to cultivate increasing acreage
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OPPORTUNITIES—aerospace
• Planes & helicopters, parts & components, defense & executive use
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OPPORTUNITIES—IT
• 7.3% CAGR over the next 4 years • Corporate network servers, networking equipment • Computer hardware & peripherals
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OPPORTUNITIES—telecom
• Cell phone service infrastructure, satellite services (video/e-learning), broadband infrastructure, power line communications, pay TV
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Opportunities—Social Media
Social Media • Social media growth in line with economic growth • 76 million internet users • 60% use social networks (facebook, twitter, Orkut/google),
231 “friends” or connections • Most social media growth in Rio, Sao Paulo, & the south • TV culture is strong and informs social media • 6th largest YouTube market—15 million views: http://www.youtube.com/watch?feature=player_embedded&v=5AFna6R-rAo#!
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Opportunities—Social Media
Jade Sims, Michigan State University
Opportunities—Social Media
Jade Sims, Michigan State University
Opportunities—Social Media
Brazil’s continuing GDP growth
Households by income level
Jade Sims, Michigan State University
Jade Sims, Michigan State University
Jade Sims, Michigan State University
Jade Sims, Michigan State University
Jade Sims, Michigan State University
Jade Sims, Michigan State University
Jade Sims, Michigan State University
globalEDGE
• Online Course Modules (70+) – Export Modules from “A Basic Guide to
Exporting”
• Export Tutorials • Country Insights • Country Rankings • Blog • Diagnostic Tools
– CORE – FREIGHT – PARTNER – DISTRIBUTOR
• Resource Directory
Online Course Modules
globalEDGE
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globalEDGE: Online Course Modules
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globalEDGE - Export Modules
• The World is Open for Business • Developing An Export Strategy • Export Advice • Developing a Marketing Plan • Methods and Channels • Finding Qualified Buyers • Using Technology Licensing and Joint Ventures • Preparing Your Product for Export • Exporting Services • International Legal Considerations • Going Online: E-Exporting Tools for Small Businesses • Shipping Your Product • Pricing, Quotations, and Terms • Methods of Payment • Financing Export Transactions • Business Travel Abroad • Selling Overseas and After-Sales Service • BONUS MODULE: Analyzing a Company's Ability to Export
“Sourcing and selling goods around the world has never been easier, and more and more small U.S. businesses are competing and winning in the global economy. A Basic Guide to Exporting is a great source for anyone preparing to do business or to increase their sales overseas. We strongly recommend it to our customers.”
Frederick W. Smith President, Chairman, and CEO
FedEx Corporation
Thank you! Jade Sims Outreach Specialist for Business and International Trade Michigan State University | International Business Center Eppley Center 645 N. Shaw Ln, Rm 7 East Lansing, MI 48824-1121 P: (517) 884-1660 F: (517) 432-1009 E: [email protected] W: http://global.broad.msu.edu/outreach/