Brazil - Pestl Analysis and Swimwear Industry Review

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| RESEARCH ASSIGNMENT | Brazil: Swimear & Surfwear | | Warwick Brown (87354922) | |

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Contents EXECUTIVE SUMMARY 1 SITUATION ANALYSIS 1 POLITICAL 1 ECONOMIC 2 SOCIAL 3 TECHNOLOGICAL 5 LEGAL 6 ENVIRONMENTAL 7 THE SWIMWEAR INDUSTRY 8 BRAZILIAN BRANDS 9 AUSTRALIAN BRANDS 10 MARKET ENTRY STRATEGIES 12 EXPORT 12 JOINT VENTURE 12 DIRECT INVESTMENT 13 PREFERRED STRATEGY 13 APPENDIX 15 BIBLIOGRAPHY 16

EXECUTIVE SUMMARY
Brazil is the largest economy in South America, with GDP of $US 1,314 billion and a population of 192 million. It is also one in which there is enormous inequality of wealth distribution, which presents challenges for the government, and the economy. Largely internally focused, Brazil is opening its doors to more international trade, though biased towards exports rather than imports. For the foreign company doing business in Brazil, there are few barriers to entry, however there are significant tax, legal and social implications which must be evaluated before deciding to enter the Brazilian market. These can increase the cost of goods by more than 100% of their value, and impact the ability of a firm to compete. The local swimwear industry is worth approximately US$3bn and is dominated by several highly successful brands with an international presence. Opportunities exist for differentiated products to enter the market, however the market entry strategies must be carefully considered. For established brands a licensing strategy may be appropriate, and for smaller businesses, an aggressive export strategy through local distributors is recommended.
SITUATION ANALYSIS
POLITICAL
Brazil has been dominated by a series of military and populist governments since gaining independence from the Portuguese in 1822. In 1985 the military regime transferred power to civilian rulers.
It is a federal republic composed of 26 states and a federal district, with three tiers of government. Each state



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