In analysing the market in Brazil and how this company fits in, we analyse various policies and institutions that are in place in Brazil to try and facilitate both existing and new business. We shall also explore other important aspects such as economic stability, institutional improvement as well as policies on development and the comparative advantage that business owners have in Brazil (Paul,2012).
This essay seeks to analyse the market for confectionery and chocolates in Brazil, for the chosen company, Lindlt that deals with the manufacture and sale of confectionery and chocolate. The intention of the paper is to explore the market and try and find if there is a corporate fit for the expansion strategy of the company in this new territory.
The market for chocolates and confectionery is a large one in Brazil. With a relatively youthful and chocolate loving population, the market is a rather significant one and able to support quite a number of players. In order to analyse this market we shall explain the various components of the market, in order to get a clearer picture of the market.
Market size- Information from Mintel Group intimates that the average chocolate consumer in Brazil spent $2,466.89 which is a significant market. This means that the market can still accommodate other players as it’s still quite large.
Market trends – Normally, the market for chocolates and confectionery has always appreciated the new developments in the industry. New chocolate products are finding their way in the industry and deriving significant sale.
Market growth rate- statistics available from government departments indicate that with the new lease of life in the economy, the market growth is expected to blossom. This is a great opportunity for any new entrant who expects to get into this market
Market opportunity – There is definitely an opportunity for this product in the market in Brazil. Looking at the market statistics, the market seems to have great opportunities for new entrant as is explained in the details below. Brazil is the 5th largest country both geographically as well as by population and this is a great opportunity for the market (Business Insight series).
Industry cost structure – As explained below, the government of Brazil has taken great steps to ensure that bureaucracy and other obstacles in the business environment has been ironed out and this to a large extend has ensured that the cost of doing business is significantly reduced.
In fact, Brazil has been ranked the first by the Institute of International in terms of transparency and best practice in terms of service delivery and especially to foreign investors (Advogados, 2012). This alone is a great motivator too the company that seeks to establish operations in the country.
The great infrastructural development as well as government policies that are enterprise friendly are a great attraction to any investor and the company in her expansion strategy would benefit very much in investing in this great economic giant of South America.
References
Paul, E. (2012) Brazil Market Opportunities.Adapted from: http://www.eef.org.uk/export2011/presentations/Paul-Eadie-MBE-Doing-Business-in-Brazil.pdf
Advogados,V. (2012)Selected Legal Aspects of Doing Business in Brazil. Adaptedfrom:http://askie.iesingapore.gov.sg/FA/Hybrid/themes/IESingapore/Uploads/Doing_Business_in_Brazil_-_Veirano_Advogados.pdf
Business Insight series. Economic environment in Brazil. Adapted from http://www.brasil.gov.br/para/press/reference-texts/business-environment-in-brazil-1
Chang, S. J., & Singh, H. (2000, July). Corporate and industry effects on business unit competitive position. Strategic Management Journal, 21(7), 739-752.
Furman, J. (2000).
Does industry matter differently in different places? Evidence from four OECD countries (MIT-Sloan working paper, #4121). Retrieved September 11, 2003, from
http://people.bu.edu/furman/Industry%20matters.pdf
