Brazil: Exporting Computer & Office Parts

Brazil: Exporting Computer & Office Parts

Brazil is the largest country in South America, and has been the subject of conversation as one of the leading emerging markets. Cateora and Graham say "today many Latin American countries are at roughly the same stage of liberalization that launched the dynamic growth in Asia during the 1980's and 1990's" (Cateora & Graham, 2007, p. 264). Which means, if this is true, there is a lot of potential and profit to be made in this particular emerging market. However, there is much to be considered before exporting products and beginning to make a profit. In studying Brazil, we will look over several concepts, promotional, distribution and pricing decisions along with the country's economic status, trade sectors and political, legal and socio-cultural environments before introducing a category of products that I believe will be prosperous.

Brazil is not only the largest country in South America, but it has the majority population and is "leading the other countries" in power, status and potential (Maps of the World, 2009 para.1). Despite economic crisis, it has also been one of the most resilient countries. According the World Bank, Brazil's "Gross Domestic Product is worth 1613 billion dollars or 2.60% of the world economy" (TradingEconomics.com, 2010 para.1). Brazil is one of the few countries that are "experiencing rapid economic expansion and industrialization" (Cateora & Graham, 2007, p. 248) and it fits into the classification of being an NIC, newly industrialized country. This means that the country is growing in areas of world trade and exporting (Cateora & Graham, 2007, p. 248). It seems perfect timing for anyone exporting and/or importing into Brazil.

Brazil's economy is "characterized by large and well-developed agricultural, mining, manufacturing, and service sectors" (Brazil, 2009, Economics) and is expanding at an impressive rate into the global economy. From 2003 to 2007, Brazil ran record trade surpluses" (Brazil, 2009, Economics) and even though they did incur some financial loss after the financial crisis seen around the world, we are now seeing a climbing GDP (TradingEconomics.com, 2009, Brazil GDP Growth Rate chart).

Cateora and Graham state that Brazil is a world player in several different areas from food to weapons and automobiles. Companies like VW have taken to utilizing product production facilities and are planning to continue to invest and expand. In fact, the plans include "investing a total of 2.3 billion euros in new products and manufacturing capacity expansion in the country between 2009 and 2014" (VW newsroom, 2009 para. 1). Other key companies that are currently operating in Brazil include, Shell, General Motors, Nestle and Nokia. While Brazil's success is almost unexplainable, there is no question that it is becoming more and more prosperous.

Some relate Brazil's accomplishments due to its culture, politics and literate population while others claim that it is cheap labor and great climate. Although we may not be able to pin point, these factors together contribute to the overall profits and popularity. Brazil is structured as a federal republic "with two legislative houses; its chief of state and government is the president" (Britannica Concise Encyclopedia, 2006 para.1). In fact, Brazil and the U.S. are the "two largest democracies in the Hemisphere" (U.S. Department of State, 2010 para.1) and in many ways Brazil's system is similar the U.S. with having legislative, executive, judicial branches. There are political parties and diplomats. Overall, Brazil is proving itself as a strong country that is moving towards the right direction when it comes to gender equality, humility, justice, and outreach programs that help the less fortunate.

Brazil is also alike the U.S. in that it is a region of immense ethnic diversity and culture. There are many religions, races and languages that make up their current population of 198,739,269 (CIA World Factbook, 2009, People). Also, despite not being of the wealthiest of nations, they have an 87.3% literacy rate (Catora & Graham, 2007, p. 248) that is aiding in their business successes, along with their growing economy, expanding technologies, cheaper labor costs and popularity.

Doing business with Brazil may not be as difficult as trading with China, however there are many policies, procedures, requirements and issues to plan for. Before pricing products to be introduced in Brazil, there are several guidelines to follow. According to RB International Trade Services, "to obtain trade and economic statistics, you need to know the classification code(s) of your product(s)" and there are "four classification systems necessary for a successful research" (rosalienebacchus.com, 2010, para.3). After this is determined, we must then establish knowing the exact percentage of Brazil's tariff amount to be applied onto the cost of the product(s). Currently, Brazil charges a tariff between zero and twenty percent on most items, with the only exclusions being "telecommunications equipment, computers, some capital goods and products included on Brazil's national list of exceptions to the CET, such as shoes, automobiles and consumer electronics" (Trade Information Center, 2010, para.4).

Another important growth factor in success is information technology, and its advancements. Advancements in technology "open opportunities for emerging economies to catch up with the richer ones" (Cateora & Graham, 2007, p. 251). This is one reason why I believe the exporting of computer and office parts to Brazil will prove to be very successful. According to B2B Marketplace by Bridgat.com, the 5th most valued trade is computer and office parts (2008, Top Products Imported by Brazil). As other, larger companies move into Brazil, they will need computers, office supplies, IT related infrastructure assistance, etc.

There are many benefits to exporting computer and office parts. For one, these parts are generally not too heavy, there is a multitude of variation, and the costs of these products have been dropping as newer and better technology emerges. Plus, we already know that these are of the top ten imports into Brazil. In dealing with such high demand products, it does not seem to have a viable downfall unless we choose the wrong target market.

In choosing a target market for these products we have to first look at where we can make the most profit. General speaking, it would be nice to create customers of the corporations, however, I believe we should generalize our target market to being small to medium size businesses, particularly those in the IT related fields/repair