Brazil

1. Brazil Country Report MIS480 OU Fall 2004 Jawan Brooks Gene Lopinski Igor Pertrovski Nick Zeigler Karen Zezula

2. Agenda GENERAL INFORMATION • Physical Area Jawan Brooks • Demographics Jawan Brooks • Socio-Cultural Atmosphere Gene Lopinski • Economy Igor Petrovski • Business climate of country and region Igor Petrovski TECHNOLOGY • IT Possibilities in Brazil Nick Zeigler • IT industry strengths and weaknesses Nick Zeigler • IT industry Producer Characteristics Gene Lopinski • IT industry Consumer Characteristics Gene Lopinski • E-Commerce Igor Petrovski • Sample of IT industries Jawan Brooks • WebsitesKaren Zezula REGIONAL COMPARISON • French Guiana Nick Zeigler

3. GENERAL INFORMATION

4. Physical Picture

5. Basic Demographics • Brazil is populous along the coast, less in the interior. The inhabitants are very diverse with many races and cultures represented. • Population • 177.062.044 (2003). • Ethnic groups • White (includes Portuguese, German, Italian, Spanish, Polish) 55% • Mixed white and black 38% • Black 6% • Other (includes Japanese, Arab, Amerindian) 1% • Religions • Roman Catholic (nominal) 80% • Languages • Portuguese (official), Spanish, English, French • Exchange rate • Reals per US dollar - 1.954 • Labor force • 79 million • By occupation:  services 53.2%, agriculture 23.1%, industry 23.7% Unemployment rate:  7.1% • Industries • textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment

6. Socio – Cultural Picture • Brazilians like to create relationships • Brazilians, being extremely cordial • Business and social circumstances you may hear this word - jeitinho (pronounced jay-chi-nyo) • In Brazil, basic business networking is based on the family • Sense of Camaraderie • Dressing up for Business

7. Economic Picture • Brazil is advanced in agricultural, mining, manufacturing, and the service sectors. • The beginning of September Brazil’s government reported that the nations GDP grew 5.7% beating all median forecasts of 4.5%.

8. Economic Picture The three pillars of the economic program • Floating exchange rate • Inflation-targeting regime • Tight fiscal policy A floating exchange rate is when a nation's government is NOT trying to manipulate currency prices to achieve some change in the exports or imports The central bank is responsible for achieving a publicly announced target for the inflation rate Tight Use of the federal government's powers of spending and taxation to stabilize the business cycle

9. Business Climate of Country and Region Economy in South America • Brazil's economy is greater then all other South American countries and is expanding its foothold in the world markets Human Resources • Brazilian has high quality managers and a excellent local labor force that contributes to the success of companies operating there. • Nokia had such confidences in the quality and production of the Brazilian workforce that they adding more than 1,000 workers to its Manaus cell phone assembly facility.

10. Business Climate of Country and Region Drawbacks • One of the main problems in Brazil is high duties and taxes. In 2002 import duties averaged over 11%. • Freight hijacking organizations are known for their success in getting goods to market quickly. Hijackers, along with smugglers and counterfeiters supply Brazil's Black market which is equivalent to 40% to 50% of the country's gross national income.

11. TECHNOLOGY

12. IT Possibilities in Brazil • Possible industries for investment: • Outsourced Technical Support Services • Corporate Help Desk • Customer Service/Support • Example: Volkswagen Call Center • Outsourced Manufacturing • Lower labor costs (but not lowest) • Labor skill level higher than less-developed nations • Example: Nokia Assembly plant • Not a viable target market for imports: • High import tariffs • 20% of imports can take up to 30 days to clear customs

13. IT Industry Strengths and Weaknesses Strengths: • Brazil’s telecom infrastructure used to be considered a barrier to growth. The aging telecom infrastructure was privatized in 1998. This lead to an influx of telecom-related investment, and Brazil now has a modern infrastructure. • Educated, skilled workforce • Central location in South America • Many sea ports Weaknesses: • Business laws not supportive of e-commerce • Inadequate legal protection for e-commerce transactions • Language Barrier

14. IT Industry Producer Characteristics • Brazil is the leading IT market in Latin America • Long-term outlook IT sales is extremely good -- economic expected growth 3.5% annually, next few years • Hardware Market should increase due to private sector’s ongoing modernization of it’s operations • Brazilian governments commitment to providing Brazilians with electronic government, plus expanding computer and Internet use throughout the country • Brazilian government commitment should increase sales and opportunities for suppliers of Servers, Desktop, Notebook, PDA’s and used PC’s in the future • Peripheral Firms should benefit • Scanners, Printers, Disk Drives • Demand for High-end data storage should be strong

15. IT Industry Producer Characteristics • Software market has enormous potential • Brazilian Manufacturing & Services need for software solutions • Brazilian Corporate Security concerns result in heavy IT spending • Excellent Market for networking equipment-continuing expansion • International Data Corporation predicts IT Services overtake investment in computer equipment • Brazils acute shortage of qualified IT personnel-Great need for consultants and system integrators • Corporate execs consider data warehousing and IT security part of their budgets

16. IT Industry Consumer Characteristics • Brazil has most the PC’s installed and Largest internet population in Latin America • PC use still confined to the Wealthy • US market research forecasts Brazilian Internet users will triple to 42 million by 2006, Yankee Group • Brazil was the 11th largest computer market in 1997, could reach 5th in the near future • Most PC consumers are in Industrial commercial and financial establishments • Small Office/Home Office Market to continue to increase • Growth in Government Market & Educational Market

17. E-Commerce • E-commerce in Brazil has a firm hold in information intensive sectors with little affection by foreign business • The growth of e-commerce in Brazil has been rapid in the last two years; electronic trade grew from 100 million US dollars to nearly 2 billion dollars a year

18. IT Industries • Variety of IT Industries in which to work: • Computer Analysts • Programmers • Systems Administrators • Web Developers • Telecommunications • Education • Certifications are not mandatory • Preference given to college education and relevant work experience • Graduate level degrees preferred by employers for higher level positions

19. Brazil Websites • Portugese • MSN • Mercado Livre = free market • Sandisk SD 256MB • $175.00 Reals • Exchange rate • US Comparison -- EBay • General Motors Brazil • Extra.com • English • Braslink • In translating its 'Got Milk?' slogan into Hispanic, the US Milk Board would have been best to know that it actually asked people if they were breastfeeding. Ford had a similar problem in Brazil when the Pinto flopped. The company found out that Pinto was Brazilian slang for "tiny male genitals". Ford prised all the nameplates off and substituted Corcel, which means horse. These, and dozens of other blunders, highlight how linguistic nuances can change the whole meaning of marketing slogans and would have been avoided by using native linguists in marketing translations

20. REGIONAL COMPARISON

21. French Guiana v. Brazil

22. French Guiana v. Brazil