A Strategy to Enter Brazil

Topics: Marketing, Joint venture, Variable cost Pages: 18 (6615 words) Published: January 23, 2013
International Journal of Marketing Studies; Vol. 4, No. 5; 2012 ISSN 1918-719X E-ISSN 1918-7203 Published by Canadian Center of Science and Education

Planning the Impossible with Lighting Solutions: A Strategy to Enter Brazil Sylvain Charlebois1, Meera Haque1, Caleigh Nevin1, Alicia Savile1, Dana Husain1, Maggie Chen1, Benjamin Bickers1 & Dave Howard1 1

College of Management and Economics, University of Guelph, Guelph, Canada

Correspondence: Sylvain Charlebois, College of Management and Economics, University of Guelph, Guelph, ON N1G 2W1, Canada. Tel: 1-519-824-4120 Ext. 56808. E-mail: sylvain.charlebois@uoguelph.ca Received: April 10, 2012 doi:10.5539/ijms.v4n5p56 Abstract Metalumen, a Guelph-based lighting solutions manufacturer, is considering the Brazilian market. For Canadian companies, the Brazilian market is not only difficult to enter, but it is also difficult to understand. In this paper, a strategy for Metalumen to enter the Brazilian market is explored. Based on a review of the literature, segmentation, mode of entry and distribution strategies are suggested. Data was also collected by a group who went to Sao Paolo to validate assumptions onsite. The paper suggests that Metalumen, will have the greatest success in entering the market using a Strategic International Alliance (SIA) strategy. Other dimensions of international marketing in Brazil are also presented. Keywords: Brazil, strategic alliances, global segmentation, global distribution 1. Introduction Metalumen, a Canadian-based company, which manufacturers industrial lighting solutions, seeks the best expansion strategy to enter into the Brazilian market. Brazil is currently an attractive starting-point for Metalumen’s international expansion due to the country’s tremendous economic growth, resulting in ample opportunity for infrastructure development (Chung and Enderwick, 2001). The following paper depicts the optimal strategic plan for Metalumen to pursue in this endeavor. Data was further validated by a group who visited Brazil in 2012 to verify assumptions and consolidate strategic beliefs (Gall, 2012). This includes: the ideal market segment to enter, the most efficient mode of entry, and the most cost-effective method of distribution. The market segment with the most opportunity for Metalumen’s initial entry is the transportation and infrastructure sector (Dubowski, 2010).This is due to the many upgrades, renovations, and expansion projects being funded by the government and private investors. Metalumen will have the greatest success in entering the market using a Strategic International Alliance (SIA) strategy, as the company will be able to gain valuable insight pertaining to the Brazilian market from their partner firm’s prior business experience and will gain a sustainable reputation in an otherwise unchartered region. The method of distribution that Metalumen should employ involves outsourced manufacturing in Brazil (Brida, Lionello et al. 2011). This will allow Metalumen to benefit from lowered costs of production while avoiding high exporting costs and elevated Brazilian protectionist import taxes and maintaining an ease of product access within the country (Kayo et al. 2010). Further analysis contained within this paper include: prospective organizations with whom to form a strategic international alliance, potential target projects within Brazil, pricing strategies to employ, predicted return on investments, a detailed cost analysis, and an examination of future opportunities and risks (Higgs, 2011). 2. Literature Review Dealing with emerging markets creates challenges (Oehler-Sincai, 2011). A country like Brazil has significant socio-economic and environmental challenges (Turcato et al. 2012). National competitiveness with emerging markets such as Brazil is a complex and dynamic concept that transcends macro- and micro-economic foundation of value creation and prosperity. Canada has been particularly challenged by trade disputes...
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