Brazil is the largest country in Latin America and the fifth in the world. Brazil's economy is the most powerful in the region and has a significant impact on world markets due to highly developed agriculture, mining manufacturing and services economic sectors. Brazil is the world's largest producer of coffee and sugar cane, and one of the largest exporters of agricultural products (Business Monitor International (BMI), 2011 1st Q, pp.47-48). This assignment is about Brasil Foods, the largest Brazilian producer of meat and dairy. Today it has leading position in almost all its domestic sectors and strengthening its presence on the global market due to its potential. The globalization provides company many opportunities. First of all, it allows company to expand its market. Secondly, it is expected to raise the importance of country during the food crisis. Brazil with its rich resources is expected to be the largest supplier to the countries as China and India where the shortage of food will occur. In such circumstances, Brasil Foods, as the largest domestic producer, has all chances to become one of the largest producers in the world. Currently, company is considered as the largest world exporter of poultry and has much more growth. It is important for success of company to develop the effective and competitive strategic plan of entering to the new markets and to find the solution on how to decrease the risks. In this assignment, author will analyze the main company’s tactics in its operation and decision making and the main influences of globalization on it. For successful completion of the work there are 4 main objectives of the work: •
To analyze the economy of Brazil, Its internal and external influences. •
To explore the Brasil Foods’ position in the domestic market by implementing PEST and Porter’s Five Forces analyses. •
To estimate its overall strengths, weaknesses, opportunities and threats in both markets, domestic and global. •
To evaluate the globalization impacts on the decision making and management complexity. 2.
INTRODUCTION: THE BOOMING BRAZIL
In 2010, Brazil had economic boom due to the high growth of the GDP in amount of 7, 5 %. There was a significant growth of middle class. Economic boom and social policies have led to the fact that more than 20 million citizens overcame poverty (Lissardi, 2012). There was significant reduction of unemployment rate and income growth in 2010.Currently, economy continues to expand in the moderate way. Although the GDP growth was 2,7% in 2011, there is still high rate of job place creation (IHS Global Insight, 2012 p.12). The main factors of economic boom were due to the development of industrial sector and agriculture. 3.
INTERNEL INFLUENCES ON BRAZIL
STRENGTHS OF ECONOMY
IHS Global Insight (2012, pp. 27-28) distinguished particular the most important economic sectors that could be considered as the main strengths of Brazilian economy which contributed to the prosperity growth of the country. 3.1.1.
Brazil is the largest producer of coffee. In addition, the country is one of the leading producers of cocoa, sugar cane, oranges, beef, soybeans, and corn. Brazil’s strong position in the agricultural sector owes to huge areas of fertile land and vast water resources. Very large amount of land has not been used yet that indicates a potential for further expansion, in particular, the production of soybeans. Despite of the fact that agriculture composes only about 5% of GDP, the sector employs 20% of the labour force in Brazil (Business Monitor International, 2011 1st Q, pp.47-48). 3.1.2.
OIL AND GAS INDUSTRY
The development of the oil and gas industry also had a positive impact on the growth of national economy. Brazilian oil and gas market is a major energy market in South America. BMI forecasts that there will be 33.85% of Brazilian oil demand in Latin America regions by 2015, providing 29% of supply (Business Monitor...
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