Objectives of Foreign Entry in Brazilian Market

Running head: INTERNATIONAL BUSINESS
Objectives of foreign entry
One of the major reasons for Dutch lady to enter in the Brazilian market is reduction in
the market share of them in their existing market. This is due to the reason that as per the reports,
Dutch lady’s net profit got down by more than 12 percent in the Malaysian market. Moreover, it
is also reported that future probability of Dutch lady in their existing market is low due to the
poor sentiment of the customers and high cost of operation. Hence, if foreign countries such as
Brazil can be targeted then market size will get increased and Dutch lady will have lower level of
dependence on the Malaysian market (Ang, Benischke and Doh 2015). Another reason of
entering in the Brazilian market is increasing the market presence in the western regions.
Currently, Dutch lady is having their presence only in the South East Asian regions. Thus, doing
business in Brazil will help them to position as a truly global brand. The vision of Dutch lady of
becoming a leading dairy brand in the world will be further complemented by entering in the
Brazilian market.
Internal analysis of Dutch lady
Strengths
One of the major strengths for Dutch lady is their high level of market penetration in the
South East Asian markets. This will help them in implementing the same strategy in getting the
foothold in the Brazilian market as well.Dutch lady is having positive brand image and goodwill,
which will be beneficial for pushing the sales in the new market.Being one of the leading dairy
brands in the existing markets, Dutch lady is having technological advancements, which will be
beneficial in gaining competitive advantages.

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INTERNATIONAL BUSINESS
Weaknesses
Dutch lady is having lower sets of market presence and brand identity compared to their
competitors such as Nestle. They are not having any extensive market understanding about the
Brazilian regions. Having limited product portfolio may not be successful in gaining markets
share in Brazil considering the different taste and preference pattern of the customers.
Opportunities
Entering in the Brazilian market will help Dutch lady to increase their market share
across the world.Positive market growth in the country will further contribute in increasing the
revenue for Dutch lady in doing business in Brazil.Introduction of market specific products for
the Brazilian market will help to gain more market penetration.
Threats
Emergence of economic slowdown in Brazil will cause reduction in the market
potentiality for Dutch lady.Emergence of political issues in the country will also reduce the
business viability in the long term.Entry of new global competitors in the country will saturate
the market and reduce the profitability of Dutch lady.
Objectives of entering Brazilian market
Brazil is one of the leading developing nations in the current time and is witnessing faster
growth rate compared to some of the developed economies. It is reported that Brazil is the ninth
largest country in the worldin terms of gross domestic products. Thus, it will pose huge
opportunities for Dutch lady in doing business in Brazil (Spers, Wright and de
AzevedoAmedomar 2013). On the other hand, the strategic position of Brazil in the Latin

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INTERNATIONAL BUSINESS
American region is another reason of selecting it. This is due to the reason that entering in the
Brazilian market will be beneficial for Dutch lady in tapping the American market. On the other
hand, Brazil is ranked at number 5 in terms of milk production in the world. This denotes the size
and potentiality of the dairy industry of Brazil. They are also one of the major exporters of dairy
items in the world (Brito et al. 2015). Hence, in doing business in Brazil, Dutch lady will have
the advantage of taping the different other markets with their milk based products. The following
sections will discuss about the major external factors to be faced by Dutch lady in operating in
Brazil using the PESTLE analysis and Porter five forces analysis.
PESTLE analysis
Political factors
Brazil is having moderate risks in terms of political environment. This is due to the
reason that even though they are having stable government but chances of military coup are high.
This will pose challenge for businesses (Schneider 2018).In terms of global corruption index,
Brazil is ranked at 105, which shows its poor condition. Thus, Dutch lady will face the challenge
of corruption in their business operation.However, on the other hand, the recent bids taken by the
authorities to attract foreign investments will help to have more advantages for Dutch lady.
Different pro business initiatives taken by the government will be beneficial for Dutch lady in
tapping the market opportunities.Brazil is involved in different trading bloc such as BRIC. This
will further help Dutch lady in getting the access of free trade with other developing nations.

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INTERNATIONAL BUSINESS
Economical factors
As discussed earlier, Brazil is witnessing positive economical growth, which will help
Dutch lady to have better market opportunities.Brazil is based on free economy and thus Dutch
lady will find it easier to design their marketing strategies according to the relevant marketing
forces (Doner and Schneider 2016).Competition in the dairy sector of Brazil is low due to the
limited presence of the foreign brands. Thus, Dutch lady will find huge untapped market in doing
business in Brazil.However, on the other hand, it should be noted that higher rate of taxation will
affect the business of Dutch lady. This will increase the cost of operation of them in Brazil
(Acemoglu and Robinson 2013).
Social factors
Dairy products are having huge market in Brazil with high rate of consumption. Thus, the
social potentiality for Dutch lady will be more in the country.Similar to the globalized trend,
majority of the customers in Brazil are also aware about the ill impacts of carbonated drinks and
positive impacts of dairy based products. However, this should be noted that high level of
corruption in the society will pose challenge for Dutch lady in their business operation (Arias
2013). According to the reports, age groups between 20 and 40 are the major portion of
population in Brazil. Moreover, dairy based products are being consumed across every age.
Technological factors
Being operating in the dairy industry for long period, Dutch lady is having expertise and
experience in dealing with different factors.They are also leading in terms of technology also and
favorable technological infrastructure in Brazil is also favorable.Information technology in
Brazil is witnessing huge growth, which will help Dutch lady to leverage on this element for