Commercial Guide Research Assignment

In order for our company to enter into the Brazilian market, we had to do some thorough research to determine the best possible solution. Our initial screening for basic needs found that safety and security devices are promising areas for U.S. companies to invest in. Their market for this type of product has grown 10% in the last eight years, bringing in $592 million dollars, and is on track to triple to $1.8 billion by 2017. Since we do not know about the ins and outs of this market but see a great deal of growth potential, we have decided that the non-equity entry method of contract manufacturing would be best. We will use a local manufacturer to produce our product with our specifications and sell them under their brand name.

Brazil has a unique and diversified market with many opportunities for our company but we need to know how to navigate through. In order to do business there, it “requires intimate knowledge of the local environment, including both the direct as well as the indirect costs of doing business in Brazil (referred to as “Custo Brasil”). Such costs are often related to distribution, government procedures, employee benefits, environmental laws, and a complex tax structure. Logistics pose a particular challenge, given the lack of sufficient infrastructure to keep up with nearly a decade of economic expansion” (2014 Country, 2014). It would be beneficial for us to be partnered with a production facility and distributors who were familiar with the environment and qualified to achieve our business strategy. Brazil also has a culture that is opposite of the U.S., as they prefer to develop strong personal relationships and partnerships with their vendors instead of being mostly price driven.

The total market size is estimated to gain 19.17% between 2012 and 2015 and local production is along the same path at 48.82% growth in that time frame (Table 1). We want to be a part of this growth and market share, and because