Rotterdam School of Management, Brazil Means Business
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Transcript of Rotterdam School of Management, Brazil Means Business
Suzana B. Rodrigues
Brazil Means Business Symposium
The experience of small firms entering the Brazilian
market
Brazil is a new market for SMEs
32 UK small and medium-sized enterprises [SMEs]
Generally high-tech firms; 11 servicing oil & gas sector
For most of them Brazil was a new market Despite being experienced exporters,
many encountered problems in entering Brazil
What kind of problems did these firms have when trying to access the Brazilian market?
Brazil – Areas of difficulty of doing business
Area Ease of doing business rank (out of 183)
Starting a business 126
Dealing with construction permits 113
Employing workers 138
Registering property 120
Getting credit 87
Protecting investors 73
Paying taxes 150
Trading across borders 100
Enforcing contracts 100
Closing a business 131
OVERALL 129
Main problems of entering the Brazilian market reported by UK SMEs
Regulations and bureaucracy
Complexity of the legal system
Corruption
Language
How did the firms address these problems?
Coping with difficulties
“Bridging” gaps in understanding the local
environment
Through a Brazilian partner or agent that helped to deal with
difficulties and had a relevant network in Brazil
“Avoidance” of risk and hassle
Business through agents or offices in other countries
Skirting around regulations
Insisting on pre-payment
“Bridging”: Finding a reliable agentThrough Business/trade missions Trade association or trade promoters in your country or host country Through personal network Employing a Brazilian student or local resident to help with contacts,
translation, searching relevant information Serendipity
How can agents help? Find customers and partners To develop relations with already identified partners Contacting business people who are interested in exporting to
Europe
However... There is the issue of whether to have a sole agent. Balance
between opportunity to develop trust versus risk of dependence
How to succeed in Brazil?Have something to offer
A competitive product and service
(advanced specific knowledge, price, quality, delivery)
Work with the customer in the provision of solutions
Customer support
Reciprocity
“If one wants to trade in Brazil, one should start off by representing
a Brazilian organization in Europe and then, if you’ve got something
to offer, go back out to Brazil’
Start small
If anything goes wrong, the company has the resources to get over it
Build relationships
Personal visits to the customer
Doing your homework 1. Go personally to Brazil
“You may get a detailed market research from export promoter institutions , but this will not allow you to feel the market for yourself . You need to know yourself how people behave. A report does not provide the same information and meeting people”
2. Understand your client
“You have to understand your customer well, his intention and what he wants to do. You have to understand things from his point view and transform potentially conflictive situations into cooperation”
Doing your homework3. Work with export promoters, after due preparation “I think that it is probably more cost effective if you have done your
homework, your own sort of intelligence, gone on a trade mission, made
contacts and only then go for the market report because then you know what you are want from it”
“We weren’t used to dealing with government bodies, we did not know
what was required. Gradually we worked with them more, being more
specific on targets and parameters. The help that can be given to the
company is tremendous, but it is down to the company to be specific and
refine its research closely”
Doing your homework
4. Knowing the culture
Personal relationships Limitations (promising too much) Flexibility (diverse and broader interests) Informality Time management Short-term orientation National identity National pride
How can export promoter institutions can help more effectively?
Providing information which is relevant to the stage of internationalization of the SME
Understand the relevance of the market for a particular SME. Some firms operate in very specialized niches
Partnering match (finding a partner that falls into the product niche of the SMEs).
When is assistance useful?Two key factors: General internationalization experience (new to export) Experience with Brazil (new to exporting to Brazil)
Two of the most useful activities: Missions (useful for sharing support, contact with EPA,
financial support for the trip) Partner matching (socials, meetings) The more labour-intensive and costly activities were
less useful (market research, exhibitions etc.)
Brazil Means Opportunities
Infra-structure Railways Airports Roads Ports Water engineering
Energy Oil and gas Biofuels
Agriculture/Agribusiness Market gardening Irrigation