Internationalization & Global Business 2019/2020

GLOBE DIMENSIONS
OF BRAZIL

Francisco Pedro Santos Paulo

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 Internationalization & Global Business 2019/2020

TABLE OF CONTENT

BACKGROUND 3

TIMELINE 3

BRAZIL’S PROFILE 4

BRAZILIAN ECONOMY 5

HOFSTEDE & GLOBE PROJECT’S ANALYSIS 6

PESTEL ANALYSIS 8

SWOT ANALYSIS 10

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 Internationalization & Global Business 2019/2020

BACKGROUND
After more than three centuries under Portuguese rule, Brazil gained its independence in
1822, maintaining a monarchical system of government until the abolition of slavery in 1888 and
the subsequent proclamation of a republic by the military in 1889. Brazilian coffee exporters
dominated politically the country until populist leader Getulio Vargas came to power in 1930.
By far the largest and most populous country in South America, Brazil underwent more than half
a century of populist and military rule until 1985, when the military regime peacefully ceded the
rule. power to civil rulers. Brazil continues to pursue industrial and agricultural growth and the
development of its interior. Having experienced a period of successful global financial hardship
in the late twentieth century, Brazil was seen as one of the strongest emerging markets in the
world and a contributor to global growth. The 2014 FIFA World Cup and 2016 Summer Olympics
awards, the first ever held in South America, were seen as a symbol of the country's rise. However,
between 2013 and 2016, Brazil was plagued by a falling economy, high unemployment and high
inflation, emerging only from the recession in 2017. Former President Dilma Rousseff (2011-
2016) was removed from office in 2016 by Congress for committin-g unthinkable acts against
Brazil's budget laws, and its vice president, Michel Temer, served the remainder of his second
term. In October 2018, Jair Bolsonaro won the presidency with 55% of the votes and took office
on January 1, 2019.

TIMELINE
1500 - Portuguese land in the area and claim it for the Portuguese crown.

1822 - The son of the Portuguese king declares independence from Portugal and crowns Pedro I,
emperor of Brazil.

1888 - Slavery is abolished. A year later, Brazil's monarchy is overthrown and a federal republic
is established; in subsequent decades the government is dominated by European coffee plantation
owners.

1930 - Nationalist and anti-communist Getúlio Vargas comes to power in a coup; his 15-year
authoritarian government seeks state-led industrialization and improvements in social welfare.

1945 - Vargas is overthrown by a coup that restores democratic rule and inaugurates the second
Brazilian Republic.

1960 - The capital is transferred from Rio de Janeiro to the new city of Brasilia.

1964 - Leftist President João Goulart is deposed in a coup that starts two decades of military rule;
The regime stifles freedom of expression and tortures opponents, but also seeks economic
development.

1985 - Return of the civil government.

2002 - Luiz Inácio Lula da Silva, popularly known as Lula, wins the elections to become the first
leftist president of Brazil for over 40 years.

2016 - Lula's ally and successor, Dilma Rousseff - is dismissed as president after an impeachment
trial finds her guilty of financial irregularities.

2018 October - Far-right candidate Jair Bolsonaro wins the presidential election over the center-
left Workers Party.

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 Internationalization & Global Business 2019/2020

BRAZIL’S PROFILE

Brazil is the most influential country in South America, a growing economic power and
one of the largest democracies in the world.
In recent years, it has made great strides in its efforts to lift millions out of poverty,
although the gap between rich and poor remains large.
Exploration of the Amazon rainforest, much of which is in Brazil, has been a major
international concern, as the desert is a vital climate regulator.
A former Portuguese colony, Brazil has a highly diverse population, including indigenous
Americans and descendants of African slaves and European settlers.

FACTS
Federative Republic of Brazil

Capital: Brasilia (largest city: São Paulo)

Population: 208 million

Area: 8.55m km2

Main language: Portuguese

Main religion: Christianity

Life Expectancy: 72 years (men), 79 years (women)

Currency: Real

LEADER
President: Jair Bolsonaro

Retired army officer Jair Bolsonaro won a decisive victory over the center-left Workers
Party in the October 2018 presidential election and took office in January 2019.
A member of the Liberal Social Party, an anti-establishment group that combines social
conservatism and pro-market politics, Bolsonaro is a deeply polarizing figure whose previous
defense of the military dictatorship frightened many Brazilians.
But after his victory, he tried to assure voters that he would "defend democracy" and
defend the constitution.
Bolsonaro's pledge to "clean" Brazil from corruption has proved particularly popular in a
country that has seen dozens of politicians from major parties arrested.
Among its key policies are a relaxation of gun laws to allow "all honest citizens" to own
a firearm, a cut in state intervention in the economy and the possibility of withdrawal from the
Paris climate change agreement in 2015.

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BRAZILIAN ECONOMY

Brazil's large territorial extension provides possibilities for the execution of various
economic activities. In addition to the existence of mineral wealth, its large territorial extension
can be destined to agricultural activity.
Brazil is a country with a solid economy, exporter of a wide variety of products, a fact
that strengthens its economy. The activities of agriculture, industry and services are very active
and contribute to the growth of GDP (Gross Domestic Product). In 2008, Brazilian GDP grew by
5.1% compared to 2007 production, totaling R $ 2.889 trillion.
Exports totaled US $ 197.9 billion in 2008, and imports US $ 173.2 billion, the balance
of trade (difference between export and import) was US $ 24.7 billion, ie the country exported
more than it imported.
The main products that Brazil exports are: iron ore, steel, soy and derivatives,
automobiles, sugar cane, airplanes, beef, coffee and chicken meat.
The most imported products in the country are: crude oil, electronics, vehicle parts,
medicines, automobiles, fuel oils, natural gas and aviation engines.
Brazil, together with Argentina, Uruguay and Paraguay, forms the economic bloc called
Mercosur (Southern Common Market). In addition to this economic bloc, Brazil is also part of
the WTO (World Trade Organization).

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HOFSTEDE & GLOBE PROJECT’S ANALYSIS

With a score of 69, Brazil reflects a society that believes that hierarchy must be respected
and inequalities between people are acceptable. The different distribution of power justifies the
fact that the holders of power have more benefits than the less powerful in society. In Brazil, it is
important to show respect for the elderly (and children take care of their elderly parents). In
companies, there is a boss who takes full responsibility. Power status symbols are very important
for indicating social status and "communicating" the respect that could be shown.

INDIVIDUALISM
Brazil has a score of 38, meaning that in this country people from birth are integrated into
strong and cohesive groups (especially represented by the extended family; including uncles,
aunts, grandparents and cousins) who continue to protect their members. In exchange for loyalty.
This is also an important aspect in the workplace, where, for example, an older and powerful
family member should “help” a younger nephew get hired for a job in his own company. In
business, building trustworthy and lasting relationships is important: A meeting usually begins
with general conversations to get to know each other before doing business. The preferred
communication style is rich in context; therefore, people often speak profusely.

MASCULINITY
A high (Male) score in this dimension indicates that society will be driven by competition,
achievement and success, with success being defined by the winner / best in the field - a value
system that starts at school and continues throughout the organizational life.A low (Female)
dimension score means that the dominant values in society are taking care of others and the quality
of life. A female society is one in which quality of life is a sign of success and standing out from
the crowd is not admirable. The bottom line here is what motivates people, wanting to be the best
(Male) or enjoying what you do (Female). Brazil has 49 points, a very intermediate score in this
dimension.

AVOID UNCERTAINTY
At age 76, Brazil is high on the AIU - and most Latin American countries as well. These
societies show a strong need for elaborate rules and legal systems to structure life. The individual's
need to obey these laws, however, is weak. If rules cannot be maintained, additional rules will be
dictated. In Brazil, as in all high-level societies to avoid uncertainty, bureaucracy, laws and rules
are very important in making the world a safer place to live. Brazilians need to have good and
relaxing moments in their daily life, talking with colleagues, enjoying a long time. Meal or dance
with guests and friends. Due to their high score in this dimension, Brazilians are very passionate
and demonstrative people: emotions are easily shown in their body language.

LONG-TERM GUIDANCE
This dimension describes how every society has to maintain some links with its own past
while dealing with present and future challenges, and societies prioritize these two existential
goals differently. Normative societies. Who have low scores in this dimension, for example, prefer
to keep time-honored traditions and norms while watching social change with suspicion. Those
with a high-scoring culture, on the other hand, take a more pragmatic approach: they encourage
economics and efforts in modern education as a way to prepare for the future. At 44, Brazil scores
as an intermediary in this dimension.

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INDULGENCE
The high score of 59 in Brazil marks him as an indulgent society. People in societies
ranked high in Indulgence often show a willingness to fulfill their impulses and desires when it
comes to enjoying life and having fun. They have a positive attitude and have a tendency towards
optimism. In addition, they place a high degree of importance on leisure, act as they please, and
spend money as they wish.

GLOBE PROJECT

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 Internationalization & Global Business 2019/2020

PESTEL ANALYSIS

POLITICAL
Brazil is the most powerful country in South America. It is also considered a medium
power that has moderate influence in international affairs. Being one of the largest democracies
in the world has offered Brazil huge potential in many fields. Indeed, many political analysts
believe that Brazil has the potential to become a superpower in the future.
Brazil is a member of various international organizations and unions, for example the
International Monetary Fund, United Nations, World Bank, World Trade Organization, G20,
Mercosur and BRICS. It is also an important OECD partner. Brazil has strong political and
economic relations with the United States. However, Brazil's relations with neighboring
Venezuela are deteriorating very rapidly.
In addition to the challenges of foreign policy, there are other issues that have hit Brazil
hard in recent years. For example, corruption is one of the biggest problems in the country. It is
very rampant and there is hardly a sign of cessation. In Transparency International's Corruption
Perception Index, Brazil now ranks 105th out of 180 countries and territories in the world.
Likewise, the so-called Carwash investigation exposed a massive bribery scheme involving
various politicians and business elites in the country. Indeed, many analysts believe that
corruption is one of Brazil's biggest barriers to economic development.

ECONOMIC
Brazil is the 9th largest economy in the world in nominal GDP. It had strong growth
between 2002 and 2013; However, Brazil's economy went into recession in 2015 with a growth
rate of -3.8% and in 2016 with a growth rate of -3.6%. Things reversed in 2017 and the economy
grew 1.4% in 2018. Many forecasts suggest that the Brazilian economy will grow in 2019 and
will continue to do so in the coming years. The unemployment rate in 2018 was 11.8%; however,
it was 1% lower than the rate recorded in 2017.
Brazil ranks first in the list of the top 10 coffee producing countries in the world. It
produced approximately 55 million bags of coffee in 2016/17.
Brazil is also the world's leading sugar producer and exporter. 25% of sugar produced in
Brazil meets local needs, while the remaining 75% is exported to over 100 different countries.
Soybeans, iron ore, crude oil, raw sugar and cars are Brazil's main exports, while refined
oil, vehicle parts, packaged medicines, integrated circuits and cars are the main imports. Brazil's
main export destinations are China, the United States, Argentina, the Netherlands and Germany.
The main sources of imports are China, the United States, Argentina, Germany, and South Korea.
As mentioned above, Brazil is an essential part of the BRICS group (Brazil, Russia, India,
China and South Africa). He has undertaken a number of initiatives to encourage foreign direct
investment (FDI) in the country. It is noteworthy that Brazil is the 4th largest recipient of FDI in
the world; however, FDI in the country slowed in the first half of 2018.

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SOCIAL
Brazil is one of the most diverse countries in the world. It has a total population of
approximately 208 million. Life expectancy for men is 72 years and 79 for women. Portuguese
is the main language, while Christianity is the main religion of the country (BBC, 2019).
There is no doubt that Brazil has made significant economic progress in recent years. It
has lifted millions out of poverty in the last 15 years; However, it is estimated that 10% of the
population still lives in poverty. Moreover, the gap between rich and poor is still widespread.
Similarly, criminal violence is also an important area of concern.
There are other social challenges that Brazil faces today. For example, millions of
children lack adequate education, housing and health care. Thousands of children live and work
on the streets in dire conditions and are exposed to drugs, crime and prostitution. Discrimination
based on gender and race is also rampant in Brazil.
Leaving aside social challenges, the middle class is growing rapidly in Brazil. Brazilians
are very modern and up to date with the fashion world. Many people love to buy expensive,
luxurious and branded products. Brazilians love football frantically and are always one of the top
contenders for the FIFA World Cup title.

TECHNOLOGICAL
São Paulo has witnessed a technological boom in recent years, particularly in software
for Web and mobile development. Brazilians are among the most enthusiastic users of social
media in the world, and approximately 50% of people are involved in online activities of some
kind. In fact, Brazil has the fifth largest number of mobile phone and Internet users in the world.
Brazil is the largest ICT market in Latin America and one of the largest in the world.
Brazilians prefer to use cell phones or communicate with family and friends using the Internet.
Therefore, few homes have a landline for telephone. The Government of Brazil invests heavily in
innovation and digital transformation projects. Many multinational companies are also investing
heavily in Brazil's ICT sector.

ENVIRONMENTAL
Brazil is one of the most beautiful countries in the world. The Amazon River and the
rainforest, the Iguazu Falls, 62 national parks, 2,000 beaches stretching along Brazil's coast and
hundreds of conservation areas are some of the attractions that draw the attention of millions of
tourists each year. Indeed, the tourism sector is growing rapidly in Brazil and contributes greatly
to the economy of various regions of the country.
However, Brazil faces some serious environmental challenges. For example,
deforestation, illegal wildlife trade, poaching, air pollution, water pollution, land degradation and
oil spills are the most challenging. It is noteworthy that Brazil has taken several environmentally
friendly initiatives over the years to address environmental challenges.

LEGAL
A detailed discussion of Brazil's legal environment is beyond the scope of this article.
Therefore, the article briefly addresses some aspects of business and employment laws in Brazil.
It is a very common practice for employment contracts to be drawn up, even if written
employment contracts are not normally required by Brazilian law. Although Brazil encourages
foreign direct investment in general, it imposes restrictions in certain sectors. For example,
investing in postal services, financial institutions, nuclear energy and private security and
transportation is restricted to Brazilians only or subject to authorization by the Government of
Brazil.

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SWOT ANALYSIS

STRENGHTS
Brazilians are known to be jokers - they like to joke, joke, and have no qualms about
laughing at themselves. Play is a way of life for Brazilians who, years ago, even voted a clown in
Congress. Brazilians like to live in the moment, despite the continuing problems caused by
politics, the economy and even each other.
The country is home to many musical styles, many of which fit the party scene. Afro-
Brazilian rhythms and sounds are often accompanied by native Brazilian drums.
Surprisingly, Brazil is one of the leading countries in the supply and use of plastic surgery.
The Brazilian Butt Lift, a surgical procedure that involves the transfer of fat from a body part to
buttocks, was founded by a Brazilian plastic surgeon. This procedure is popular in other western
regions now.
It's not just the butt lifts that the country produces - many people also do eyelid procedures
and breast surgeries. Because these procedures are so popular, there is little or no stigma
associated with plastic surgery. The cost is also much lower than in North American countries,
which makes it an access point for medical tourism.
The country also cultivates many exotic fruits, such as the much preferred acai berry.
Now used in food and beauty products, acai is one of the "hot" healthy foods in the world. This
is just one of many produced by Brazil, but many of the other fruits have not left the country's
borders.
The Amazon, responsible for half of the world's rainforest population, is located in Brazil.
The rainforest occupies over one billion acres of land and is home to a fraction of the world's bird
species, as well as over 30,000 plant species.

WEAKNESSESS
Despite the lightness of many citizens, Brazil is quite dangerous - especially for traveling
foreigners. It is so bad that government websites in countries of origin (such as Canada) warn
travelers about rising crime rates in Brazil and recommend safety procedures for travelers.
Crime occurs throughout the country, but certain regions such as Sao Paulo, Rio de
Janeiro and Brasilia are hot spots. In most cases, travelers are victims of petty crimes such as
theft and purse theft. But it is not uncommon to be robbed with a knife or a weapon.
Rare cases include kidnapping and human trafficking. As Brazil connects with Colombia
and Venezuela, organized crime is easier to accomplish.
For US entrepreneurs and investors, Brazil is a difficult country to branch out. The
company exports simple products like ore and food, but only 25% of these products are traded to
the west.
Instead of trading large amounts for other countries, the Brazilian economy is driven by
the domestic trading and buying market. This independent economy benefits locals, but also
limits growth potential.
This lack of growth potential is not good news, as Brazil is a very expensive country to
live in. It is worse for specific people like farmers.
Farmers are required to pay more than four times as another company to carry their goods.
Taxes make growing or maintaining a business a nightmare - it is not unheard of for companies
to spend thousands of hours calculating their taxes each year, since much of Brazil's production
comes from taxes.

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OPPORTUNITIES
As Brazil's IT industry expands, so does end-user spending via technology. Consumer
interest in online fashion shopping, electronics and computers is increasing. Interestingly,
Brazilians often shop at online discount stores similar to Groupon.
The country is now trying to cultivate new energy and distribution systems. This requires
funding for railways, airports, roads and ports. So far, the country has invested $ 450 billion in
the US to improve these systems.
In the future, the country may want to focus on exporting more of its exotic fruits to other
countries. As acai berry has increased in popularity, it is possible that other fruits may elicit the
same response from consumers. After all, fruits are not just for eating - extracts are also placed
in hair and skin care products. People are always looking for the “new thing” to improve
themselves and Brazil can have it.

THREATS
Brazil faces many threats, such as the crime rate and the lack of international trade. But
one of the biggest problems affecting the Brazilian land and environment is the ecological
problems in the Amazon.
Deforestation, as well as poaching and the illegal wildlife trade, plague the Amazon.
Water is polluted by severe oil spills and land is slowly degrading from mining. Because it is so
large, the Amazon makes it a prime location for mining and illegal activities, especially when
laws are so relaxed in Brazil.
Due to the growing need for wood and soybeans, many people turn to Amazon forestry.
This is the most significant factor why Amazon deforestation is still prevalent. Unfortunately, in
the last 50 years, more than 500,000 square kilometers of forest have been destroyed.
Some of these issues also stem from the Olympics. Brazil hosted the Olympics in 2016.
The water was polluted, garbage was scattered on the ground and tons of money were used to
create new infrastructure. Brazilians were not happy, as this money could be spent to lower
unemployment, crime and help the poor. This event caused many people to lose faith in their
government.

SWOT ANALYSIS’ CONCLUSION

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