Brazil case study
1. In your opinion, why is there still political uncertainty in Brazil?
I believe the current wave of uncertainty in the Brazilian political system is purely due to lack of the government to uphold socialism in their policies. In socialist governance the infrastructure, industries and development is widely controlled and owned by the state. However, in recent years the ruling class has been advocating for increased foreign and direct investment to accelerate growth. This has in turn rubbed some of the political elites the wrong way leading to an escalation in political heat. This creates an uncertainty in the Brazilian political system.
2. What strategy would be the most useful to companies interested in Brazilian investment?
Growth style management strategy.
Brazil enjoys some of the lowest prices in the property market; this offers any aspiring investor a great opportunity to enjoy great returns for any investment made. In addition, Brazil enjoys very low inflation rates which have been decreasing over the years. This coupled with stable macroeconomic policies offers great returns to any investor. These great returns are what offer investors growth prospects in Brazil.
3. Considering the economic and political environment, what types of companies would benefit the most by expanding their operations in Brazil?
Some of the best companies, to benefit the most from expanding in the Brazilian economy are firms concentrated in; telecommunications, petrol and gas explorations and road, rail and air infrastructure companies. This would be due to the high growth prospects in these industries in the Brazilian economy. This is greatly accelerated by the large market availability and major economic reforms being carried out by the government.
4. How should Bellsouth, AES, and other companies address concerns about government policies in Brazil?
BellSouth should find ways of seeking the governments help in helping alleviate the currency turmoil and the volatility in the political scenes as exciting will cut off the Millions of subscribers they hold currently.
AES should look for ways of decreasing their electricity supply charges as this will earn the firm favorable consideration from the general public.
