Supré Pty Ltd, since being founded in Australia in 1984, has achieved great success not only in opening privately owned stores across Australia and New Zealand, but also in providing online shopping opportunities to customers in Countries across the globe (Supré Pty Ltd 2011). This report addresses a proposal for Supré to embrace international expansion by launching a store in the country of Brazil, located in the Latin America and Caribbean Region. This report will firstly evaluate environmental factors, also known as the PESTL Analysis, for consideration when expanding operations internationally and includes Political, Economic, Socio-Cultural, Technological and Legal factors. Brazil is a large country comprising of five distinct regions, so for the purpose of the PESTL analysis the environmental factors will be considered to generally affect the country as a whole and only Brazil’s most relevant positive and/or negative environmental factors will be considered. Secondly, the report will conduct a SWOT analysis to address the Strength and Weaknesses within the organisation as well as the external Opportunities and Threats associated with international expansion of operations to Brazil. Finally, recommendations on the proposal will be presented for consideration by Senior Management of Supré.
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Brazil has a long history of corruption and unrest tarnishing Political operations as well as business in the private sector. In 2009, 69.9% of Brazil firms surveyed by the Enterprise Analysis Unit of the World Bank identified that corruption was a major constraint (Enterprise Surveys 2009). On a financial scale, a local group called Ethos Institute estimated that the cost of corruption in Brazil is $180 billion each year. In 2007 the Ethos Institute demonstrated that positive steps are being taken to address the concerning figures by encouraging 300 Brazilian companies to sign an anti-corruption pact. In addition, the Ethos Institute continues to dramatize the fight to stamp out corruption in Brazil by using an ad campaign with a tagline "Either Brazil ends corruption, or corruption will end Brazil" (Penteado 1997, 27). In more recent years, Brazil’s democracy has stabilised, encouraging increasing international investment in a country that possesses such a rich business potential. The changes to the political environment of Brazil have occurred as a result of multiple political parties across the political spectrum and Presidents (and officials on the federal and state level) being elected by direct popular vote, after vigorous, open campaigns enforcing mandatory voting by persons aged 16 and over (Noriega and Fogassa 2011). This is an encouraging sign for Supré as the people have the freedom and power to elect leaders that will take them from the depths of poverty to a fully developed and prosperous country abundant with opportunities and choice from international business. Economic Environment
Brazil’s population of over 166 million people is attractive to many organisations in the search for international investment, however the economic climate in Brazil has experienced highs and lows throughout its history and even today there remains a pressing issue of economic uncertainty. Despite more recent advancements and steps taken by the Government to address poverty, a percentage of the target consumer market is still affected.
In spite of this, a key development in emerging consumer market in Brazil over “recent years has been the modernisation of the retail sector, highlighted by the entry of major international retail chains into the market and the growth of world class shopping complexes, where all major international brands can be found. Although each of the 26 states and the Federal District retain their own market characteristics, it is interesting to note that this development is true for most major population centres across the country, each now with...
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