Can Brazil Become a Global Competitor in It Technology

914 Words Nov 27th, 2013 4 Pages
Mini Case Study p59-60 Wayland Baptist University – San Antonio International Management MGMT 5326-SA01 Dr. W. Chukwuma Achebe Richard D. Stephens Jr. September 6, 2013 Abstract

As the world becomes increasing dependent on information technology (IT) products and services, the global IT services outsourcing industry has increased exponentially. Efforts to reduce costs and focus more on their core competencies have corporations outsourcing and offshoring many of their IT services. Offshoring of IT services have been growing at 40 to 50 percent a year. Brazil, like India, has stepped up to the challenge and has begun a campaign to build a strong international competitive position in the IT offshoring
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Increased labor costs and inadequate infrastructures have begun to lessen their capabilities eroding their status. They have a sophisticated telecommunications and great network services infrastructure, in fact it rated higher than India or China. This theory best describes Brazil’s situation as currently they can produce these services just as India can but they are not able to do it with the economy of scale and efficiencies. Brazil has strong engineering schools capable of producing high quality graduates. Also, Brazil has nearly 300,000 employed in the IT services career fields nearly matching India. Brazil has one of the worlds most automated banking sectors. Their IT and software and support services are dynamic in the domestic marketplace. The physical location of Brazil makes them idea because they are only one time zone away from the east coast of the United States. With all these positive benefits, Brazil appears to be well positioned to compete in the IT outsourcing marketplace. Mercantilism theory is also a factor because Brazil follows the economic philosophy and the belief that a nation’s wealth is dependent on the wealth of the nation. Brazil is the 5th largest country and 11th most powerful economy in the world. Brazilian labor rates are 40 percent below the same type positions in the United States. Turnover is 20 percent vs India’s 40 giving Brazil a distinct advantage. 2. What
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