Pestel Analysis of Brazil

Brazil Country analysis 2011

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Introduction

Brazil is one of the most powerful nations in South America. Brazil has become one of the fast growing emerging markets in the world. It is the powerful and ranks fifth in terms of geographical. It is 8th largest country in standings of nominal GDP. They are very rich in natural resources. They accounts three fifth of total South American economies industrial production. They are one of the founding members of united Nation, union of South American nations, Mercosul, G20 and also one of the BRIC countries.

The nation's industrial sector interpretations for one third of GDP and this comprises computer, petrochemical, aircraft, steel and consumer durables. They are having trade relation with more than hundred years.in which manufactures and semi-manufactures contribute 74% of their export of goods. They are leader in bio-ethanol production .their automotive sector is enjoying the prosperous period.as assess to economic stability, credit, and low interest rate have increased their confidence of consumer.

They are also having very rich diversified natural environment and home for a wide range of species and widespread natural environment.in a range of protected habitats. Brazil have some 7000km of beautiful white sandy beaches , exotic vegetation with crystal blue sea and palm trees that endures to fascinate increasing number of visitors every year.

Key factors of change:

Political:

 There is a political stability in Brazil government; the workers party has won the election continuously for 3 times. The focus on the administration policies of the government is steadily towards the growth of the economy.

 The country had inflation rate of 16% in 2003 when LULA became the president of Brazil; he adopted various measures to control inflation as result, inflation has reduced drastically.

Brazil Country analysis 2011

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Economic:

 Foreign firm can own the company 100%. Registered capital and earning can be taken back from the country on tax free basis.

 The country is strengthening its economic policy and increasing public-private partnership model of doing business that attracts the private people in the world to invest.

 Living cost in Brazil is low when compared to European nations. It is only 20% of the amount that you spend in U.K

 Inflation in Brazil is under control for the past years. The annual inflation rate was 4.5% in 2010 and in January 2011 the rate is 5.99% according to trading economies. As inflation is low the bank lending rates will be decreased and reduce the cost of borrowings which will make loans affordable.

 Working class population is high. 66.8% of the whole population is in working class.

 Established transportation networks and well developed distributional channels are established in most cities. The transportation network includes ports, railways and roadways.

Social factors

 All the people in Brazil speak Portuguese, English so language barriers are not a problem as most of the population speaks English.

Environmental:

 Brazil is well known for its natural resources. Major natural resources are iron ore, manganese, bauxite, nickel, granite lime stone, clay, gold, uranium, petroleum, timber.

 Agriculture is one of the important occupations as 20% of total workforces are employed in agriculture sector.

 36% of the total exports are agriculture products. They contribute 39.3% of total South American agriculture production.

 Main agriculture products are sugar, milk, rice, coffee, cocoa, corn, wheat.

 Major industries in Brazil are based on these natural resources. Important industries are iron & steel, cement, petro chemicals and wood products.

Brazil Country analysis 2011

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Technological:

 Developed nations like US is concentrating to invest in Latin American countries so many IT companies can switch to Brazil so it can be advantage as they can fluently speak English.

Drawbacks:

 The main concern of the Brazil is on criminal & violence. The country is worse in personal security, in major cities the country faces high rate of criminal activities where 25% of the whole population lives. 22 per 1, 00,000 people are killed in Brazil every year according to United Nation Office on Drugs and Crime (2010).

 In Brazil labour strikes are common they occur at irregular time period majorly in cities so it is difficult for the people to run business were involvement human capital is important for the organization.

 Corruption is high in Brazil according to transparency international survey Brazil ranks 69th place in corruption and the corruption perception index is 3.7

 The relationship between executive and legislative is difficult as there is variations between views of members in legislative assembly and views of executive members differ.

 The government is formed by collation the workers party of Brazil is supported by ten parties so the parties switch is not favor for the government.

 In spite of liberalization of foreign exchange important acts are same. Regulations in Brazil are weak and cumbersome bureaucracy is well known in Brazil.

 People in Brazil consider time as calm and flexible mode. So it is disadvantage for people to do business and people have tendency to life at slower pace and negotiations take longer time there are chances of cancelling the meetings

 Brazilian people give more importance to family they always prefer to work in group with their families.

 Brazilian people give equal importance to the relationship so we have to spend time with them and they will work only with people whom know personally and professionally.

Brazil Country analysis 2011

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 Land invasion is very common and it leads to violence in rural area and affects the agricultural output. People without land protest