Compare two countries for corporate axpansion
-
Upload
boris-pacheco -
Category
Documents
-
view
219 -
download
0
Transcript of Compare two countries for corporate axpansion
-
8/8/2019 Compare two countries for corporate axpansion
1/37
International Expansion Green
Group Wireless
Brazil vs Chile
12/14/2010Green Group Presentation II1
-
8/8/2019 Compare two countries for corporate axpansion
2/37
Company Profile
Presenter: Peter
12/14/2010Green Group Presentation II2
-
8/8/2019 Compare two countries for corporate axpansion
3/37
Company Profile
12/14/2010Green Group Presentation II3
Company demographics 3rd largest domestic carrier
Utilize CDMA network standard
Employ over 42,000 personnel
Domestic growth fueled by: Emphasis on innovative product
lineup Investment in network
expansion
Strong customer service culture
Need for International
Expansion First Mover Advantage
Domestic penetration: 93%
Net growth deccretion Year overYear
Domestic Market Share
GG Wireless
Remainder
-26.5
-26
-25.5
-25
-24.5-24
-23.5
-23
-22.5
Q1 Q2 Q3 Q4
NetAddsY
OY
Domestic Market Share
GG Wireless
-
8/8/2019 Compare two countries for corporate axpansion
4/37
Economic Profile
Presenter: Maria
12/14/2010Green Group Presentation II4
-
8/8/2019 Compare two countries for corporate axpansion
5/37
Economic Statistics
12/14/2010Green Group Presentation II5
Statistic Chile BrazilGross Domestic Product (USD) $161.8 billion $1.574 trillion
GDP - Real Growth Rate (1.7%) per year (0.2%) per year
GDP (Per Capita) $14,600 $10,100
GDP - Composition by Sector
Agriculture 5.60% 6.10%
Industry 34.50% 25.40%Services 51.90% 68.50%
Unemployment Rate 9.60% 8.10%
Investment (Gross Fixed) 21.4% of GDP 16.7% of GDP
Budget
Revenues $32.62 billion $354.8 billion
Expenditures $39.82 billion $434.9 billionPublic Debt 6.1% of GDP 60% of GDP
% below poverty line 18.20% 26%
Human Development Index Rank 45th 73rd
-
8/8/2019 Compare two countries for corporate axpansion
6/37
Trade Policy
CHILE BRAZIL
12/14/2010Green Group Presentation II6
Active Policy of Trade liberalization throughthree channels:
Unilateral liberalization (1975-2002):
Unilateral reduction of Tariffs
Flat rate of 6% tariffs
Real actual tariffs on goods and services: 1.7% Signature of several free trade agreements
Multilateral liberalization: Participate in World Trade Organization (WTO)
Continuous support for fairness, transparency andnondiscrimination.
Bilateral / Regional Agreements: Active policy of Free Trade Agreement negotiations
since the 1990s. Overall Analysis:
Dedicated to Free Trade
Welcoming environment to international expansion
Began modest trade reforms in 1990s
Unilateral liberalization (1990s to date)
Reduction of Tariffs: 1990 average tariff rate: 32%
2000 average tariff rate: 13.7%
Multilateral liberalization: Participate in the World Trade
Organization (WTO)
Bilateral / Regional Agreements: Limited policy of pursuing Free Trade
Agreement negotiations since the 1990s.
Overall Analysis: Significant trade reforms over last two
decades
Moderately welcoming environmenttoward international expansion
-
8/8/2019 Compare two countries for corporate axpansion
7/37
Trade
12/14/2010Green Group Presentation II7
Statistic Chile BrazilTrade Balance $530 million ($25.3) billion
Exports $53.74 million $153 billion
Imports $39.75 million $127.7 billion
Major Export Markets:
China, 16%
USA, 11%
Japan, 9%
Major Trade Partners:
USA, 22%
China, 13%
Argentina, 10%
Brazil, 6%
Major Export Markets:
China, 13%
USA, 10%
Argentina, 8%
Major Trade Partners:
USA, 16%
China, 13%
Argentina, 9%
Germany, 8%
-
8/8/2019 Compare two countries for corporate axpansion
8/37
Summary: Economy (25 pts)
12/14/2010Green Group Presentation II8
Points in Favor:
Tremendous economic growthover the past 20 years
High level of foreign trade
Strong financial institutions
Points Against:
Chile's economic and politicalsuccess is vulnerable
Small market
Points in Favor:
Attracting foreign capital
Raising income level among
middle class
Brazil has continued to bepublicized as a so-calledemerging country that offers
investors solid and stable
returns. Huge market
Points Against:
Higher volatility
Chile
Brazil
Conclusion: Chile 15 points. Brazil 22 Points
-
8/8/2019 Compare two countries for corporate axpansion
9/37
Infrastructure / Geography
Presenter: Boris
12/14/2010Green Group Presentation II9
-
8/8/2019 Compare two countries for corporate axpansion
10/37
Infrastructure
CHILE Paved Roadways: 16,745 km.
Unpaved Roadways: 63,760km.
Railways: 5,483 km. Major Airports: 6
Major Ports: 7
Notes:
87% of trade is done in Ports.
International Airport Arturo
Merino Benitez.
Mi. Paved Road / Sq. Mi: 0.22
BRAZIL Paved Roadways: 96,353 km.
UnpavedRoadways:1,655,515km
Railways: 28,857 km.
Major Airports: 15
Major Ports: 30
Notes:
Greater portion of Brazilsexports and imports areshipped by sea.
International Airport GovernorAndr Franco Montoro.
Mi. Paved Road / Sq. Mi: 0.113
-
8/8/2019 Compare two countries for corporate axpansion
11/37
0
0.05
0.1
0.15
0.2
0.25
Mi. Rd / Sq. Mi. Area
Brazil
Chile
0
2
4
6
8
10
12
14
16
Pops / Airport (M)
Brazil
Chile
Population Serviced By Airport
Measures availability of air transit
Chile has clear advantage in aerospaceinfrastructure
Miles of Road per Square Mile ofArea
Measures availability of paved road
Chile appears to have betterhighway infrastructure
-
8/8/2019 Compare two countries for corporate axpansion
12/37
INFRASTRUCTURE
CHILE Communications:
Main lines: 3.575 million
Mobile cellular: 16.45 million
Internet users: 1.056 million
Broadcast media: About 250radio stations & no more than25 TV stations, many state-owned.
Major cellular companies:
VTR, Nextel, Movistar, Entel,Claro.
BRAZIL Communications:
Main lines: 41.497 million
Mobile cellular: 173.959million
Internet users: 64.948 million Broadcast media: More than
1,000 radio stations & morethan 100 TV stations.
Major cellular companies:Brasil Telecom Participacoes,
Brasil Telecom, Tele NorteCelular Participacoes,Telecomunicacoes de SaoPaulo, Telemig CelularParticipacoes, TIMParticipacoes, VivoParticipacoes.
-
8/8/2019 Compare two countries for corporate axpansion
13/37
Summary (25 pts)
12/14/2010Green Group Presentation II17
Points in Favor:
Availability of roads, highways,etc
Availability of widespread airtransit
Points Against:
Highly mountainous geographycauses technical challenges for
wireless More towers needed to cover
smaller population
Points in Favor:
Geography tends to be morewireless friendly:
Low mountains, rolling terrain
Dense urban areas mitigate thetechnical challenge of putting uptowers
Points Against:
Few; infrastructure poorer thanChiles, but sufficient
Chile
Brazil
Conclusion: Chile 17 points. Brazil 21 Points
-
8/8/2019 Compare two countries for corporate axpansion
14/37
Government, Regulation &Taxation
Presenter: Yvonne
12/14/2010Green Group Presentation II18
-
8/8/2019 Compare two countries for corporate axpansion
15/37
Starting a Business
12/14/2010Green Group Presentation II19
Brazil
Starting a business in Brazil isnot a fast process and patienceis needed. Brazilians areentrepreneurial and have all ofthe infrastructure that is
enjoyed in America, but theyalso want to know and trust thepeople with whom they aredoing business. Raisingventure money in Brazil is alsoa time consuming process and
they will want to have themoney used for a Brazilian-based company.
Easy of doing business: 125out of 181
Chile
Chileans will ask foreignvisitors, very seriously, whythey have come to this narrow,string-bean of a country at theend of the Americas. Argentina
is more cosmopolitan, they say,Brazil more sexy, Mexico iscloser. Building a business inChile means serving a smallmarket at just 16 million people,but it's a great, stable spot from
which so service SouthAmerica and it has become anexporting powerhouse oncopper, salmon, wine and fruit.
Easy of doing business: 40 outof 181
-
8/8/2019 Compare two countries for corporate axpansion
16/37
Government
BrazilChile
12/14/2010Green Group Presentation II20
Government Type: FederalRepublic
Legal System: Based onRoman codes (Civil)
Corporate Tax: Brazil'scorporate tax rate for 2010 is34%.The tax consists of a basictax of 15%. There is also asurtax of 10% for annualincome of over BRL 240,000,
about $ 110,000. Additional 9%are added for socialcontribution on net profits.
Capital Gains: Capital gains ofcompanies are added to theregular income.
Government Type: Republic
Legal System: US-styleadversarial system (Common)
Chiles flat-rate corporate incometax, known as First Category Tax,
is 17%, which is much lower thanrates charged in most OECDcountries. Of the OECDs 31members, only Iceland andIreland charge lower corporateincome tax (15% and 12.5%,
respectively) than Chile.Companies in the United Statespay 39% while the rate inMexico, the only other LatinAmerican member of the OECD,is 30%.
-
8/8/2019 Compare two countries for corporate axpansion
17/37
Business-Friendly Brazil
12/14/2010Green Group Presentation II21
Brazilians need to know who they are doing business with before they can
work effectively. Brazilians prefer face-to-face meetings to written communication as it allows
them to know the person with whom they are doing business.
The individual they deal with is more important than the company.
Since this is a group culture, it is important that you do not do anything toembarrass a Brazilian.
Criticizing an individual causes that person to lose face with the others in themeeting.
The person making the criticism also loses face, as they have disobeyed theunwritten rule.
Communication is often informal and does not rely on strict rules of protocol.
Anyone who feels they have something to say will generally add theiropinion.
It is considered acceptable to interrupt someone who is speaking.
Face-to-face, oral communication is preferred over written communication.At the same time, when it comes to business agreements, Brazilians insiston drawing up detailed legal contracts.
-
8/8/2019 Compare two countries for corporate axpansion
18/37
Business Friendly Chile
12/14/2010Green Group Presentation II22
When meeting someone in Chile and handshake is customary. You may see women
patting each other on the right forearm or shoulder rather than shaking hands. Whenmeeting large groups, it is good etiquette to shake hands with all those present.
When addressing people start formal and wait for an invitation to go informal. Addresspeople by their surnames and Mr, Mrs or Miss. Most Hispanics have two surnames,one from the father and one from the mother. Only the father's is usually used.
In Chile people leave little space between each other when interacting. Don't besurprised if the person you are speaking with places a hand on your shoulder when
talking with you. Try not to step away or appear uncomfortable. Eye contact is important in Chile as it conveys trust, sincerity and interest.
Business entertaining usually takes place at hotels or restaurants. If you are the oneinviting them you should pick up the bill. Arrange for payment with the establishmentbefore the meal or meeting as this will help avoid a lengthy debate as to who shouldpay. If you are the guest, it may be polite to offer to pay although realistically you
would not be allowed to do so. In such cases, offer to reciprocate and ensure you do. Appointments should be made a few weeks prior to arrival in Chile. January and
February are the summer holidays so try and avoid them.
Chileans negotiate in a serious and straight talking manner. Be upfront but notoverbearing. Hard sell tactics or pressure never works. Always be prepared tocompromise as this shows you value the relationship more than the financial aspectsof the deal.
-
8/8/2019 Compare two countries for corporate axpansion
19/37
Summary (20 pts)
12/14/2010Green Group Presentation II23
Points in Favor:
Extremely business friendlygovernment
Very open to foreign investors
Very low business income taxes
Familiar legal system
High ease of doing business
Points Against:
N/A
Points in Favor:
Large market means findinglegal and tax representative
talent should be simple Cons
High rate of taxation
Strict legal code
Historic distaste for foreign
investors
Chile Brazil
Conclusion: Chile 20 points. Brazil 5 Points
-
8/8/2019 Compare two countries for corporate axpansion
20/37
Population Demographics
Presenter: Khabirah
12/14/2010Green Group Presentation II24
-
8/8/2019 Compare two countries for corporate axpansion
21/37
Population Statistics
Brazil,202M
Chile,16.7M
Population
0.00%
0.50%
1.00%
1.50%
Brazil Chile
Population Growth Rate
Brazil a significantly largermarket Population growth rates do notsuggest a rapidly increasingmarket in Chile
-
8/8/2019 Compare two countries for corporate axpansion
22/37
Age Demographics
Brazil
Median Age: 28.9years
Male Age: 28.1 years Female Age: 29.7 years
Age Structure
0-14 years 26.7%
15-64 years 66.8%
65 and over 6.4%
Chile
Median Age: 31.7
Male Age 30.7 years
Female Age 32.8 years
Age Structure
0-14 years 23.2%
15-64 years 67.8%
65 and over 9.1%
-
8/8/2019 Compare two countries for corporate axpansion
23/37
Birth/Death/Sex Ratios
BRAZIL
Birth Rate 18.11 births /1000population
Fertility Rate: 2.19 children per
woman Death Rate 6.35 deaths/1000
population
Sex Ratio
At Birth: 1.05 male(s)/female
Under 15 years: 1.04male(s)/female
15-64 years: 0.98male(s)/female
TOTAL POPULATION: 0.98male(s)/female
CHILE
Birth Rate 14.46 births/1000population
Fertility Rate: 1.9 children per
woman Death Rate 5.9 deaths/1000
population
Sex Ratio
At Birth:1.05 male(s)/female
Under 15 years: 1.05male(s)/female
15-64 years: 1 male(s)/female
TOTAL POPULATION: 0.98male(s)/female
-
8/8/2019 Compare two countries for corporate axpansion
24/37
Summary (15 pts)
12/14/2010Green Group Presentation II28
Points in Favor:
Educated, stable population
Points Against:
Small population / market
Population growth unlikely
Points in Favor:
Large, growing population
Sustained population growth
seems likely
Points Against:
Lack of education
Comparably high rates ofmortality and disease
Chile Brazil
Conclusion: Chile 5 points. Brazil 10 Points
-
8/8/2019 Compare two countries for corporate axpansion
25/37
Culture
Values & Norms
Presenter: Rich
12/14/2010Green Group Presentation II29
-
8/8/2019 Compare two countries for corporate axpansion
26/37
Greeting
12/14/2010Green Group Presentation II30
Brazil
Men shake hands whengreeting one another, whilemaintaining steady eye contact.
Women generally kiss eachother, starting with the left andalternating cheeks.
Hugging and backslapping arecommon greetings amongBrazilian friends.
If a woman wishes to shakehands with a man, she shouldextend her hand first.
Chile
Men will usually shake hands.
Women generally pat eachother on the right forearm orshoulder.
Men may embrace andenergetically pat each other onthe back among friends.
Women will kiss once on theright cheek.
-
8/8/2019 Compare two countries for corporate axpansion
27/37
Business Customs & Practices
12/14/2010Green Group Presentation II31
Brazil
Use surnames and titles
Be on time
Dress conservative
Do not accept gifts
Business cards
Chile
Use surnames and titles
Be on time
Dress conservative
Gifts
Business cards
-
8/8/2019 Compare two countries for corporate axpansion
28/37
Geert Hofstede Analysis
12/14/2010Green Group Presentation II32
-
8/8/2019 Compare two countries for corporate axpansion
29/37
Geert Hofstede Analysis
12/14/2010Green Group Presentation II33
0
20
40
60
80
100
PDI IDV MAS UAI LTO
SD Model of professorGeert Hofstede
United States Brazil
0
20
40
6080
100
PDI IDV MAS UAI LTO
SD Model of professorGeert Hofstede
United States Chile
-
8/8/2019 Compare two countries for corporate axpansion
30/37
Summary (15 pts)
12/14/2010Green Group Presentation II34
Points in Favor and Points Against
Conclusion: Chile 13 points. Brazil 11 Points
-
8/8/2019 Compare two countries for corporate axpansion
31/37
Summary, Conclusion, andRecommendations
Presenter: Peter
12/14/2010Green Group Presentation II35
-
8/8/2019 Compare two countries for corporate axpansion
32/37
Summary
Chile Brazil
12/14/2010Green Group Presentation II36
Points in Favor:
Strong economy
Strong prospects for economic
growth Political stability
Business-Friendly environment
Comparative infrastructureadvantage
Points Against: Small market
Mountainous geographypresents technical challenges
Points in Favor:
Large market / population
Geographically suitable for
wireless industry Suitable infrastructure
Points against:
Relatively weak economicenvironment
Unfavorable environment towardforeign investment
Higher population mobility
-
8/8/2019 Compare two countries for corporate axpansion
33/37
Analysis - Points
Chile Brazil
12/14/2010Green Group Presentation II37
Economic Conditions: 15 points
Geographic Conditions: 17 points
Governmental Conditions: 20points
Population Demographics: 5 points
Cultural Conditions: 13 points
Economic Conditions: 22 points
Geographic Conditions: 21 points
Governmental Conditions: 5 points
Population Demographics: 10
points
Cultural Conditions: 11 points
Conclusion: Chile 70 points. Brazil 69 Points
Recommendation: Chile
-
8/8/2019 Compare two countries for corporate axpansion
34/37
Backup Slides
Brazil vs Chile
12/14/2010Green Group Presentation II38
-
8/8/2019 Compare two countries for corporate axpansion
35/37
CURRENCY
CHILE BRAZIL
12/14/2010Green Group Presentation II39
PESO
1 Chilean peso = 0.0021 USdollars
REAL
1 Brazilian real = 0.5787 USdollars
1.0 Chilean Peso = 0.0036 Brazilian Real
-
8/8/2019 Compare two countries for corporate axpansion
36/37
0
20
40
60
80
100
120
140
160
180
200
Main Lines Mobile Internet
Brazil
Chile
-
8/8/2019 Compare two countries for corporate axpansion
37/37
Language
12/14/2010Green Group Presentation II43
Brazil
Portuguese (Official)
Spanish
German
Italian
English
Chile
Spanish (Official)
German
English