Brazil: overview and key characteristics

Brazil Country Analysis

History and Summary of Recent Economic Performance

Brazil is the 5th-largest country in the world by area and by population. Gifted with immense natural resources, the country has only recently begun to work to its economic potential. As one of the large, high-growth emerging economies, Brazil has been a magnet for foreign investment in the past decade. The country has recently been affected by an economic slowdown, however, after several years of impressive growth. Brazil's economy grew at 7.5% in 2010, but this declined to 2.7% in 2011 and just 1.3% last year ( CIA World Factbook, 2013). Nevertheless, the country has the 8th-largest economy in the world at $2.36 trillion, just ahead of the United Kingdom and behind Russia.

Brazil's economic progress has come as the result of reforms introduced starting in the 1990s under the Cardoso government, which aimed to control inflation. A shift in emphasis came in the 2000s under Lula da Silva, who introduced reforms to the education system and social safety net, while continuing Cardoso's economic policies that encouraged foreign trade (CIA World Factbook, 2013). The country has held stable democratic government in recent years, in contrast to different points in the 20th century. The result has been one of the strongest and most prolonged periods of growth in the country's history. Brazil currently operates as a federal republic with democratic, multiparty elections.

Brazil's growth has also come as the result of increasing trade with China. China is now Brazil's largest trading partner and Brazil sends China soybeans, iron ore and other commodities. In return, China sends Brazil low-cost manufactured goods (Brown-Lima, 2010). As the result of its spurt of economic growth, Brazil's GDP per capita has now increased to $12,000. The country is still characterized by a high GINI index, a measure of wealth inequality. Thus, while Brazilians in Leblon or Ipanema live well, there is still rampant poverty, even in nearby favelas.

Brazil is a member of Mercosur, a South American trade group. The country is also a member of the World Trade Organization and has a number of individual trade agreements. Through recent governments under Lula and Roussef have been characterized by outsiders as socialist, they continue to engage in free trade around the world, something that has driven Brazil's economic progress. The country was ranked as 72nd in the world as the best country for business by Forbes Magazine, between Namibia and Azerbaijan, indicating that there is still some room for improvement. The report cited trade freedom, monetary freedom, red tape, tax burden and property rights as the biggest impediments to doing business in Brazil. The country also ranked 69th on the corruption perceptions index, matched up with Saudi Arabia and South Africa, again highlighting that there are issues that the country needs to address to fully optimize its economy.

With respect to organizational structures, Brazil has traditionally been oriented towards large firms, either owned by the state or by wealthy families, and a high level of government control. There is room in the economic system for tiny businesses but seldom for small business. In recent years, this has been changing, but it will take time for the heavy hand of government to leave the business arena, and for economic power to become more democratized.

Market Research

International consumer markets are significantly different from domestic ones. Each culture has its own unique characteristics, and in a country the size of Brazil there are distinct regional characteristics as well. It is critical to understand the Brazilian culture in order to market to Brazilians, as they do not respond to the same messages that Americans will. Political factors are worth considering as well, because the government is still heavily involved in business.

The market research process is Brazil should begin with secondary sources to gain an overview of the country, but from there it should involve primary sources. The primary sources can help a company to refine its ideas about the market through direct interaction. This does not differ much in Brazil -- they share the same European roots as we do, so they are likely to grasp the concept of market research and respond the same as well.