Pao de Acucar

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Doing Business in Brazil

Contents
Section A: Pão de Açúcar Overview3
Market Situation3
Company Overview3
Architecture of the Brazilian Retail Industry3
Section B: Pão de Açúcar SWOT analysis5
Electronics and Appliances Companies5
Strengths & Weaknesses - Internal to the Electronics and Appliances Companies5
Opportunities & Threats - External to the Electronics and Appliances Companies6 Section D: Pão de Açúcar’s success in Brazil6
Political7
Economic7
Social8
Technological9
Environmental9
Legal factors10
Section E: Recommendationsfor Pão de Açúcar’sOther Retail Formats10 Pão de Açúcar against Walmart10
Four key Criteria in Identifying Recommendations10
Recommendation 1: The Boutique Experience11
Recommendation 2: Department store specialized for Electronic goods and home appliances13
Recommendation 3: Event marketing14
Exhibits15
References18

Section A: Pão de Açúcar Overview
In this paper we will review GPA’s strengths, weaknesses, opportunities and threats as it relates to their “Other Retail Formats”. Using the PESTEL frame work, we will review the key factors that have contributed to their past successes and propose three strategic recommendations in order to increase market share against Walmart. Market Situation

The Federal Republic of Brazil is not only the largest country in South America (fifth largest in the world) but it’s also positioned as the world's seventh largest economy by nominal GDP and eighth largest by purchasing power parity. With over 192 million people fused by a rich diverse heritage, it is no wonder that an innovative and highly profitable company such as Pão de Açúcar (GPA) could remain mono-national in its business initiatives. As a founding member of the United Nations, the G20, CPLP, Latin Union and as a member of the BRICS countries, Brazil is recognized as a strong economy, attracting numerous investors and hosting opportunities (such as FIFA 2014 and Summer Olympics 2016). The attributes of the country foster many challenges and opportunities for all Brazilian businesses. Company overview

As the second biggest revenue generating retailer in all of Latin America, GPA has been a highly sought after company for many international and local investors. Keeping up with Brazil’s consumption demands and targeting the new found middleclass has offered them the prestige of being the biggest Brazilian company engaged in the retail business of food, clothing, merchandise, electronics and home appliances. Through key acquisitions, such as with Nova Casas Bahia, GPA has come to own over 1577 stores through all of Brazil. Its numerous stores, supermarkets and hypermarkets have made them an established Brazilian household brand. Some of the key retail arms, which have been maintained for better market segmentation, penetration and marketing initiatives, include Pão de Açúcar (162 supermarkets), Extra (204 supermarkets & 135 hypermarkets), Assaí (61 stores), Pontofrio (455 stores), and Casas Bahia (560 stores). A selection of these logos is represented in Figure 1 of the Exhibits section. [Assessed: Group Project DBIB Course, Industry Analysis (2011); Sourcing Key Numbers from the Company Web Sites] [Assessed: Group Project DBIB Course, Industry Analysis (2011); Sourcing Key Numbers from the Company Web Sites]

architecture of the Brazilian Retail Industry
Figure 3 and 4 in the Exhibit section depicts the present situation of the retail industry in Brazil. The reconstruction of the industry structure is of crucial importance - first, to document historic growth, second, to illustrate relations of ownership, dependencies, alliances, and, lastly, to track the development of the past strategic moves. These two figures illustrate the strengths, weaknesses, opportunities, and threats inherent to the company’s situation supporting future recommendation for strategic moves. Within the Brazilian market three major...
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