Suzana B. Rodrigues

Brazil Means Business Symposium

The experience of small firms entering the Brazilian

market

Brazil is a new market for SMEs

32 UK small and medium-sized enterprises [SMEs]

Generally high-tech firms; 11 servicing oil & gas sector

For most of them Brazil was a new market Despite being experienced exporters,

many encountered problems in entering Brazil

What kind of problems did these firms have when trying to access the Brazilian market?

Brazil – Areas of difficulty of doing business

Area Ease of doing business rank (out of 183)

Starting a business 126

Dealing with construction permits 113

Employing workers 138

Registering property 120

Getting credit 87

Protecting investors 73

Paying taxes 150

Trading across borders 100

Enforcing contracts 100

Closing a business 131

OVERALL 129

Main problems of entering the Brazilian market reported by UK SMEs

Regulations and bureaucracy

Complexity of the legal system

Corruption

Language

How did the firms address these problems?

Coping with difficulties

“Bridging” gaps in understanding the local

environment

Through a Brazilian partner or agent that helped to deal with

difficulties and had a relevant network in Brazil

“Avoidance” of risk and hassle

Business through agents or offices in other countries

Skirting around regulations

Insisting on pre-payment

“Bridging”: Finding a reliable agentThrough Business/trade missions Trade association or trade promoters in your country or host country Through personal network Employing a Brazilian student or local resident to help with contacts,

translation, searching relevant information Serendipity

How can agents help? Find customers and partners To develop relations with already identified partners Contacting business people who are interested in exporting to

Europe

However... There is the issue of whether to have a sole agent. Balance

between opportunity to develop trust versus risk of dependence

How to succeed in Brazil?Have something to offer

A competitive product and service

(advanced specific knowledge, price, quality, delivery)

Work with the customer in the provision of solutions

Customer support

Reciprocity

“If one wants to trade in Brazil, one should start off by representing

a Brazilian organization in Europe and then, if you’ve got something

to offer, go back out to Brazil’

Start small

If anything goes wrong, the company has the resources to get over it

Build relationships

Personal visits to the customer

Doing your homework 1. Go personally to Brazil

“You may get a detailed market research from export promoter institutions , but this will not allow you to feel the market for yourself . You need to know yourself how people behave. A report does not provide the same information and meeting people”

2. Understand your client

“You have to understand your customer well, his intention and what he wants to do. You have to understand things from his point view and transform potentially conflictive situations into cooperation”

Doing your homework3. Work with export promoters, after due preparation “I think that it is probably more cost effective if you have done your

homework, your own sort of intelligence, gone on a trade mission, made

contacts and only then go for the market report because then you know what you are want from it”

“We weren’t used to dealing with government bodies, we did not know

what was required. Gradually we worked with them more, being more

specific on targets and parameters. The help that can be given to the

company is tremendous, but it is down to the company to be specific and

refine its research closely”

Doing your homework

4. Knowing the culture

Personal relationships Limitations (promising too much) Flexibility (diverse and broader interests) Informality Time management Short-term orientation National identity National pride

How can export promoter institutions can help more effectively?

Providing information which is relevant to the stage of internationalization of the SME

Understand the relevance of the market for a particular SME. Some firms operate in very specialized niches

Partnering match (finding a partner that falls into the product niche of the SMEs).

When is assistance useful?Two key factors: General internationalization experience (new to export) Experience with Brazil (new to exporting to Brazil)

Two of the most useful activities: Missions (useful for sharing support, contact with EPA,

financial support for the trip) Partner matching (socials, meetings) The more labour-intensive and costly activities were

less useful (market research, exhibitions etc.)

Brazil Means Opportunities

Infra-structure Railways Airports Roads Ports Water engineering

Energy Oil and gas Biofuels

Agriculture/Agribusiness Market gardening Irrigation