How Can the German Car Manufacturer Firm “a” Enter Brazil Market

Topics: Free trade, International trade, Tariff, Economics, Developing country, Brazil / Pages: 14 (3252 words) / Published: Aug 18th, 2013
How Can The German Car Manufacturer Firm “A” Enter Brazil Market

Firm A is a big multinational enterprise in Germany which focuseson vehiclemanufacturer. Now, firm A is planning to enlarge its business in the world. Brazil, the largest emerging economy in Latin America is their first choice. However, similar to other developing countries, the business and trade condition in Brazil is different from developed countries. So, firm A may face great political and cultural risk when doing business in Brazil. In this circumstance, the manager needs to decide whether firm A should enter Brazil car market or not. This report will analyse this issue and present a recommendation for firm A.

This report will analyse this issue from two angles: the national institutional system and cultural condition in Brazil; the pattern of trade in both countries and the trade protection in Brazil. So, this report will be dividedinto three parts: in the first part, Brazil’s special national institution system and its cultural condition will be discussed. Then the author will also analyse how these factors can influent firm A’s performance in Brazil. In the second part, the trade difference between Brazil and other developed countries will be presented. Through the comparison of the difference, the manager might understand the risk they may face and how to avoid it. In the last part of this report, the above analysis will be summarized and a recommendation for firm A will be presented.

Brazil is one of most important emerging economy in today’s global business. Due to its successful macroeconomic stability and abundant natural resources, now, Brazil is well positioned to achieve high growth rates in the near future. (Jens 2011) The huge economic potential is appearing many multinational firms to enter its market. As a member of the economic leading group, Germany is trying to build more close business relationship with Brazil. In this condition, it is natural for firm A to enlarge

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