Doing Business in Brazil Jade Sims Business & International Trade Specialist International Business Center 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 Jade Sims, Michigan State University
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 Jade Sims, Michigan State University
Cross-Border Business Continues to Grow Exponentially Jade Sims, Michigan State University 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
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 indepth 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).
What does the US Export?
US Exports of Goods
US Exports of Services
Growth in US Exports to Top 10
Welcome to Brazil
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) Ease of doing business ranking (higher score is better) E-readiness ranking (ranking of 70 countries included) 42 67 126 Global services location index (highest ranked country is the most attractive as a potential offshoring destination) 50 Jade Sims, Michigan State University 12
MSU globaledge MPI
Leading Export Market Countries
Leading Export Market Countries
Leading Exports from Brazil
Leading Import Market Countries
Leading Import Market Countries
Leading Import Products
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.
OPPORTUNITIES
OPPORTUNITIES transportation Waterways require upgrading (13% usage vs 25-35 in North America) High logistics costs Jade Sims, Michigan State University
OPPORTUNITIES agriculture Agricultural equipment to cultivate increasing acreage Jade Sims, Michigan State University
OPPORTUNITIES aerospace Planes & helicopters, parts & components, defense & executive use Jade Sims, Michigan State University
OPPORTUNITIES IT 7.3% CAGR over the next 4 years Corporate network servers, networking equipment Computer hardware & peripherals Jade Sims, Michigan State University
OPPORTUNITIES telecom Cell phone service infrastructure, satellite services (video/e-learning), broadband infrastructure, power line communications, pay TV Jade Sims, Michigan State University 30 of 33
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 6 th largest YouTube market 15 million views: http://www.youtube.com/watch?feature=player_embed ded&v=5afna6r-rao#! Jade Sims, Michigan State University
Opportunities Social Media
Opportunities Social Media
Opportunities Social Media
Brazil s continuing GDP growth
Households by income level
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 Jade Sims, Michigan State University
Online Course Modules globaledge
globaledge : Online Course Modules Jade Sims, Michigan State University
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 Jade Sims, Michigan State University 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: sims@bus.msu.edu W: http://global.broad.msu.edu/outreach/