International Marketing Report: PESTLE Analysis of Brazil's Market

This report provides a detailed analysis of the international marketing environment in Brazil, focusing on a PESTLE analysis to assess the political, economic, social, technological, legal, and environmental factors influencing business operations. The report begins with an introduction to international marketing and the importance of environmental audits before market entry. The main body presents the PESTLE analysis, examining Brazil's political stability, economic growth, social demographics, technological advancements, legal framework, and environmental considerations. The analysis covers Brazil's economic profile, political relations, and the impact of corruption. Economic factors such as GDP, inflation, and trade are discussed, along with social aspects including consumer behavior and population dynamics. Technological advancements, the legal system, and Brazil's environmental policies are also considered. The report concludes with recommendations based on the PESTLE analysis, offering insights for businesses looking to enter or expand in the Brazilian market. The document is a valuable resource for students studying international marketing, providing a comprehensive overview of the challenges and opportunities in the Brazilian market.

INTERNATIONAL
MARKETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Business environment audit.........................................................................................................1
RECOMMENDATIONS.................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
International marketing can be defined as business activities performance which is designed
to plan, promote, price and direct the flow of an organization’s services and goods to users and
consumers in more than one country for profit. It helps organizations undertaking various kinds
of marketing activities globally so that they can establish themselves in other nations as well. But
before expanding one business to other countries it is important for organizations to conduct
environmental audit so that they can identify environment compliance, gaps in management
system implementation and various other corrective actions. PESTLE is one of the most common
analysis that can used for conducing business environment audit for organizations in order to
expand in other nations (Junior, Sampaio and Rehwinkel, 2019). This assignment will lay
emphasis on PESTLER analysis of Brazil country in order to identify effect of various macro
environmental factors like Political, Economic, Sociological, Technological, Legal and
Environmental that can influence working and establishment of an organization.
MAIN BODY
Business environment audit
Environment audit is one of the most important part required for strategic management
decision making. Environment audit is the first component of business audit as a business not
only depends upon their resources but also depends upon the environment in which they operate
so it is extremely important for organizations to conduct an environment audit so that
organization’s can formulate their business policies and expand their business accordingly.
There are various kinds of analysis available that can be used for conducing a business
environment audit. PESTLE analysis is one of them.
PESTLE Analysis of Brazil-300*6
PESTLE Analysis can be defined as a framework which helps in analysing various macro
environmental factors such as Political, Economic, Sociological, Technological, Legal and
Environmental factors that affect or influence an organization (Chen and et.al., 2019). PESTLE
analysis is also used for scanning environmental components of strategic management. Macro
economical factors of PESTLE analysis of Brazil has been explained below:
Brazil’s profile: Brazil is also known as Federative Republic of Brazil because its
federation is composed of union of 26 states, federal district and 5570 municipalities. In terms of
population it is the fifth largest country in the world with overall population of 208 million. It is
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one of the largest economies present in the world (seventh largest). In terms of normal GDP,
Brazil’s economy is the ninth largest and one of the fastest growing major economies present in
the world (Junior, Sampaio and Rehwinkel, 2019). Not only this Brazil is the regional power in
Latin America and Middle power in international affairs and one of the major emerging global
power.
Political Factor: political factors are those factors that helps in explaining degree of
government intervenes in the economy. This factor can include government policies, foreign
trade policy, political stability or instability etc. Brazil is one of the most power country present
in South America. It is one of the top middle power that has moderate influence in international
affairs. Political government of Brazil is stable and pro-active i.e. it can be said that there is no
political instability in Brazil. Executive power who is head of State and government is President
who is elected by Universal Suffrage. Legislative power in Brazil is held by The Senate and the
Chamber of Deputies. But there is no surety that this stability is permanent as it has been
observed that things in Brazil changes overnight due to which the overall political situation of
the country can heat up and become unstable. Not only government stability, corruption has also
been one of the major issue of Brazil that affects many small or large, national or international
organization’s business. Brazil has also been included in top 100 corrupt countries. Even though
according to a survey, Brazil has the potential to become a superpower in future (Rastogi and
Trivedi, 2016). Brazil has a strong political relation with United states and faster growing
relationship with countries like Venezuela. Because of corruption there has been some frequent
changes in foreign polities has been one of the major challenges for the country. Because of this
both small and large firms face difficulties in establishing themselves in Brazil. More than large
international firms, smaller organizations are facing difficulties in doing business in Brazil
without any corruptions. Even though many international firms prefer to invest and start their
business in Brazil. Other than this Brazil is also a member of various international unions and
organizations like: United nations, International monetary, World Trade organization, World
bank, G20, BRICS, Mercosur etc. Because of this Brazil have a strong political influence that
affects business organizations in many ways.
Economic factor: Economic factors are those factors that have a significant impact on the
way organizations do business. It includes factors such as economic growth, exchange rates,
disposable income and various other factors. As Brazil is the fifth largest populated country in
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the world, seventh largest in terms of GDP and high FDI inflow, Brazil’s potential growth is
extremely high. However, in 2015 country entered into recession with growth rate of -3.8 percent
which was continuously decreasing till 2017 (Zahari and Romli, 2019). In 2018 they started
growing again and is expected to grow more in 2019. It has also been observed that middle class
is constantly growing and the gap between poor and rich is also decreasing constantly. Other
than this Central bank has also helped in reducing currency devaluation risk and has successfully
brought inflation rate under control. It has also been observed that the country’s export is getting
affected adversely because currency of Brazil is overvalued when dollar comes into picture. All
national as well as international organizations are treated equally in Brazil and other than this
low labour cost also works as a profitable factor for them (Junior, Sampaio and Rehwinkel,
2019). But high taxation rate of brazil is one of the major drawbacks for the organizations and
the organization that deal in natural resources remain in major benefits because Brazil is rich in
natural resources such as coffee, corn etc. these are considered as primary productive sectors in
Brazil and secondary productive sectors are: mineral resources, clothing, food etc. In terms of
economy it is one of the most beneficial country for organizations who deal in primary and
secondary resources mentioned above. Brazil is the largest producer of Coffee in the world and
leading sugar producer present in the world. It is one of the major sources of economy for Brazil
because they export 75 percent sugar and coffee in the world (Barik and Kumar, 2018). Brazil is
the top exporter of iron ore, oil seeds, mineral fuels, poultry meat and machinery. Many
economic partnerships such as: MERCOSUR – India, protocol on trade negotiation, Latin
American Integration Association (LAIA), Global System of Trade Preferences among
Developing Countries (GSTP) and Southern Common Market (MERCOSUR) are also one of the
main factors that are helping Brazil to become economically stable.
Social factor: This factor is also known as socio-cultural factors as well. This factor focuses
on attitude and shared beliefs of people. This factor focuses on population growth, health
consciousness, age distribution and various others. Brazil is the largest South American country
and fifth largest country present in the world with more than 200 million population. Brazil has
economic inequality as more than 20 percent of the population lives below poverty line. As per
the class distribution middle class people range is growing continuously, wealthy people are
considerable and huge number of minimal income people (Fozer and et.al., 2017). So, it can be
said that consumer population of rich people is quite high who can become target customers for
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larger organizations. Other than this Brazilian people are quire modern and fashionable and
remain updated with the current trend in fashion industry. Most of the Brazilian people are
updated and aware of various luxurious brands as well as willing to buy expensive products of
those brands. It can be one of a growth opportunities for fashion industry organizations and they
can establish themselves in the southern most or south region of Brazil and people living in these
parts has the best standard of living. It can also be said that these parts of the country are the
most developed part of Brazil. Southern parts of the country are quite famous due to which FIFA
world cup in 2014 was hosted by Brazil. But there is one other side of this factor i.e. millions of
children do not get adequate knowledge, health care facilities and place to live (Oey and
Nitihardjo, 2016). Because of this many people are forced to live on streets and work in such
miserable condition, due to which they easily get exposed to situations like crime, drugs and
many more. This is one of the major challenge that Brazilian government is facing which is
affecting the social image of Brazil.
Technological factor: This factor helps in explaining technological changes and ways in
which these changes affect and organization or country. There is no doubt that technological
advancement in Brazil is increasing especially in software development but if it is compared to
countries like Russia or US then Brazil comparatively weaker or lack in strong technological
infrastructure. Brazil is counted in top 100 countries with growing IT industry development.
According to a research, Population of Brazil are counted in one of the most enthusiastic social
media users in the world as more than 50 percent people are active users of social media in fact
Brazil is the fifth largest country in the world with largest number of social media and mobile
phone users in the world (Nandonde, 2019). Because of this Brazilian government prefer to
invest heavily on digital transformation and innovation projects. Many multi national companies
have also invested in Brazil’s Information technology sector. Other than this Brazilian Space
Agency is one of the most advanced space Agency present in Latin America with highly
advanced space program. Country also has high number of Uranium which they mostly use for
research purpose. Using this Brazil had also launched their first nuclear submarine in 2015.
Brazil also focus increasing number of start-up’s in country and for this they have developed one
of the largest start up system present in Latin America. Country is also focusing on developing
their transportation sector. They have more than 4000 airports and is second in the world with
highest number of airports in the country. Because of this increasing technological infrastructure
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many multinational organizations like Ford, Volkswagen are investing in Brazil (Singh, 2016).
They are leading war leaders in extraction of deep waters and petroleum exploration. More than
80 percent vehicles present in Brazil are equipped with biofuel motors.
Legal factor: This factor includes equal opportunities, health and safety, consumer rights
and laws, advertisement standards and many more. In brazil one of the most common practise
held by organizations is written employment laws. It is a common practise which is followed by
most of the Organizations present in Brazil. Most of the laws of Brazil are codified based on
which most of the laws are made (Sridhar and et.al., 2016). According to a research legal system
of Brazil is mainly derived from European countries civil law system especially Napoleonic code
and Portugal codes. So, it can be said that legal system of Brazil is based upon Federal
constitution and was promulgated on October, 1988. It is one of the most basic requirements of
Brazil that all the courts decisions must be based on these rules. All the states of Brazil have their
own constitution that does not contradicts with Federal constitution. Many laws or policies such
as Foreign direct investment policies are made in such a manner that it helps in encouraging
Foreign direct investment but only in certain sectors. There are various sectors in which
investment of foreign organizations are is restricted such as financial institutions, postal services,
nuclear energy, transport and private security. Only and only Brazilian government has the
authority to invest in these sectors. Brazil is not only advance in technology and other sector but
it is also advanced in their legal system like Supreme court of Brazil was the first court in the
world who transmitted their sessions on YouTube, television etc. Supreme court of Brazil also
uses twitter to display their ministry day planner and items on twitter in order to inform their
daily actions.
Environment factor: This factor has only come in limelight in last fifteen years because
increasing population, scarcity of raw materials, ethical and sustainability. Brazil is counted as
one of the most beautiful countries present in the world (Vintilă and et.al., 2017). Brazil is also
famous for taking initiatives for many environment friendly activities. Brazil is also one of the
largest producers of ethanol in the field of biofuels in the world. Despite of this Brazil faces
various environmental issues out of which deforestation is one of the major issue. Once Brazil
was number one city with highest deforestation rate in the word. Because of increasing number
of deforestation Brazil has become a source of increasing pollution, greenhouse gas emission and
ecological degradation. Other than this there are various other environmental issues such as
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increasing number of illegal wildlife trade, illegal poaching, water and air pollution, land
degradation, severe oil spills and many more. Brazil is also known for diverse collection of fauna
and flora on the planet (Aithal, 2017).
RECOMMENDATIONS
According to the PESTLE analysis of Brazil there are various industries that can grow
potentially and can welcome various international firms. Brazil is technologically advanced and
is growing in IT sector drastically. So, organization dealing in this industry can invest in in this
sector as this sector has high rate of growing. Other than this international organizations in
fashion industry can also invest in Brazil as Brazilian people are quire modern and tend to buy
costly branded products. This is one of the growth opportunity for Fashion industry top
organizations as they can invest in this sector due to low risk and huge profit.
CONCLUSION
From the above assignment it has been summarized that Brazil is one of the most powerful
country of South America. It also has quite stable political government but it cannot be specified
that for how long this stability lasts. It has been analysed that Brazil is one of those countries that
has high rate of corruption. Due to this corruption many small and large organizations are getting
affected. It has also been analysed that Brazil is the seventh largest country present in the world
in terms of GDP and has high FDI flow as well. Due to this their potential growth is also
increasing. Brazilian people are quite modern, fashionable and technologically advanced people.
It has been observed that Brazilian people tend to buy costly branded products more as compared
to local product and are more active social networking site users. It has also been analysed that
most of the laws of Brazil are codified. They also have strict environmental laws and is one of
those country which take environment friendly activities initiative.
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REFERENCES
Books and Journals
Aithal, P.S., 2017. An Effective Method of Developing Business Case Studies based on
Company Analysis. International Journal of Engineering Research and Modern
Education (IJERME), ISSN (Online), pp.2455-4200.
Barik, B. and Kumar, S., 2018. Macro Environment of Indian Life Insurance Business: A
PESTLE Analysis. Bimaquest. 18(3).
Chen, B., and et.al., 2019. Analysis of the effects of Cr (VI) exposure on mRNA
modifications. Chemical research in toxicology.
Fozer, D., and et.al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner production. 147. pp.75-85.
Junior, A.G.D., Sampaio, N.G. and Rehwinkel, J., 2019. A balancing act: MDA5 in antiviral
immunity and autoinflammation. Trends in microbiology. 27(1). pp.75-85.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). pp.54-61.
Oey, E. and Nitihardjo, E.C., 2016. Selecting Regional Postponement Centre Using PESTLE-
AHP-TOPSIS Methodology: A Case Study in a Pharmaceutical Company. Global
Business Review. 17(5). pp.1250-1265.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
Singh, A.K., 2016. Selecting Regional Postponement Centre Using PESTLE–AHP–TOPSIS
Methodology: A Case Study in a Pharmaceutical Company. Global Business
Review. 17(5). pp.1266-1268.
Sridhar, R., and et.al., 2016. A Political, Economic, Social, Technological, Legal and
Environmental (PESTLE) approach for assessment of coastal zone management practice
in India. International Review of Public Administration. 21(3). pp.216-232.
Vintilă, D.F., and et.al., 2017, October. A political, economic, social, technology, legal and
environmental (pestle) approach for maritime spatial planning (msp) in the romanian
black sea. In International Conference on Management and Industrial Engineering (No.
8, pp. 653-666). Niculescu Publishing House.
Zahari, A.R. and Romli, F.I., 2019. Analysis of suborbital flight operation using
PESTLE. Journal of Atmospheric and Solar-Terrestrial Physics, 192, p.104901.
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