Case Study Foreign Market Acces Brazil
* Universidad Autonoma de Madrid * Master en Direccion de Marketing * International Marketing * Shintaro Okazaki
Case Study 1:
Foreign Market Entry Evaluation:
BRAZIL
Diogo Areias
Marion Scherzinger
Marius Weitz
27.10.2011
Contents
1 Foreign Market: Brazil 1 2 Brazil Luxury Market 1 3 SWOT- Analysis 1
3.1 Strengths 1
3.2 Weaknesses 2
3.3 Opportunities 2
3.4 Threats 3 4 Market Entry Strategy 3 Bibliography 4 Appendix 5
Foreign Market: Brazil
At this moment Brazil has 190.7 million inhabitants and is the 7th biggest economy in the world, the first in Latin America, with a GDP of approximately 2088 billion dollars2. Its economy has been expanding with the help of booming commodities (meat, cocoa, sugar cane, corn, rice and soya). The biggest Latin American economy currently has a 7,5% GDP growth rate and an increasing 7,3% inflation rate. The increasing inflation rate is linked to food and fuel costs or expectations of price and wage raises. (Employees expect higher prices and demand higher wages). Brazil has a large agricultural and industrial base, but the growing service sector has accounted for over 60 percent of the GDP in recent years.
Brazil Luxury Market
It seems paradoxical that a country with so many social problems such as Brazil, where over 20% of the population lives in poverty, can be so appealing for companies offering luxury goods. Compared to other countries in which the tourists are the principal consumers of luxury products, in Brazil these products are almost entirely consumed by local citizens. As the economy grows, wages increase as well and are generating a great opportunity for the premium brands. According to a GFK Consulting study, the reflection of this fact is the consumption of luxury products worth $6,5 billion per year. Moreover, in the last five years this sector grew 60% and in 2010 the invoiced sales of luxury products increased 27% according to the same study.
Case Study 1:
Foreign Market Entry Evaluation:
BRAZIL
Diogo Areias
Marion Scherzinger
Marius Weitz
27.10.2011
Contents
1 Foreign Market: Brazil 1 2 Brazil Luxury Market 1 3 SWOT- Analysis 1
3.1 Strengths 1
3.2 Weaknesses 2
3.3 Opportunities 2
3.4 Threats 3 4 Market Entry Strategy 3 Bibliography 4 Appendix 5
Foreign Market: Brazil
At this moment Brazil has 190.7 million inhabitants and is the 7th biggest economy in the world, the first in Latin America, with a GDP of approximately 2088 billion dollars2. Its economy has been expanding with the help of booming commodities (meat, cocoa, sugar cane, corn, rice and soya). The biggest Latin American economy currently has a 7,5% GDP growth rate and an increasing 7,3% inflation rate. The increasing inflation rate is linked to food and fuel costs or expectations of price and wage raises. (Employees expect higher prices and demand higher wages). Brazil has a large agricultural and industrial base, but the growing service sector has accounted for over 60 percent of the GDP in recent years.
Brazil Luxury Market
It seems paradoxical that a country with so many social problems such as Brazil, where over 20% of the population lives in poverty, can be so appealing for companies offering luxury goods. Compared to other countries in which the tourists are the principal consumers of luxury products, in Brazil these products are almost entirely consumed by local citizens. As the economy grows, wages increase as well and are generating a great opportunity for the premium brands. According to a GFK Consulting study, the reflection of this fact is the consumption of luxury products worth $6,5 billion per year. Moreover, in the last five years this sector grew 60% and in 2010 the invoiced sales of luxury products increased 27% according to the same study.