Identifying Problem Areas Of Brazil

2061 Words Nov 19th, 2014 9 Pages
Identifying Problem Areas in Brazil
When moving into international markets, it is crucial to investigate the major types of difficulties that can arise in other countries. Businesses experience setbacks or failure when they attempt to move into international markets. The major components that contribute to lack of success include errors in pricing, distribution, market analysis, or packaging, but may also result from an insufficient understanding of the infrastructure and culture of the trading nation.

Costing
It is essential to calculate the complete cost of a product for any business. A distributor or wholesaler must figure out the landing cost (cost of a product after all transportation handling, currency exchange rates, and import charges) when determining a suggested local retail price for either imports or exports. A manufacturer needs the full cost of supplies, parts, and machinery when developing a budget, proposal, or cost analysis.
The Cost of Business in Brazil
The cost of living in Brazil is relatively high as a result of currency appreciation, caused by the economic stabilization in the 1990s as well as the huge increase in commodity exports since then. Within the time span of a decade the value of reais has increased, which understates the scale of the change, since Brazil’s inflation was much higher, so reais should have become cheaper, not more expensive. For Brazilians, the currency appreciation has made life cheaper by cutting the price of imports.
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