Pizza Hut in Brazil Essay example

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Pizza Hut in Brazil Starting a business in a new country requires a lot of research. It is important to understand that country's political and economic system as well as cultural values. To establish business in Brazil, Pizza Hut had to study the complex history of Brazilian economy and politics. It is important to remember that Brazil was a dictatorship for 20 years, from 1964 until 1984.1 During this period it was impossible to implement any kind of foreign business in Brazilian soil. After the authoritarian regime was over, Brazil had its first election in 1984. However, it was not democratic. The only ones allowed to vote were political leaders. It was a big step towards democracy, though. The elected president (Tancredo…show more content…
In 1981 Brazil had recession, devaluation of the currency, rising interest rates, real wage reduction and a widening federal deficit. At this point Brazil was not very attractive for foreign investors. From 1985 through 1990 the government "focused on foreign debt, inflation, and exchange rate policies." Over the 1980s, Real per capita income fell 6% over the 1980s. Brazil is known for having one of the highest inflation, but the rate it achieved in the 1980s was incredible, it was 39,043,765%.11 Fernando Henrique Cardoso ended up creating a "new economic plan" and he was able to slow down inflation and to stabilize the exchange rate. On the other hand Brazil continued to face serious social and economic problems. There is a big gap between classes and there is big problems regarding "housing, clean water, and good sewage systems." However, Brazil decided to expand their economy. As a result there was less trade restrictions, which allowed foreign investment, both direct and portfolio.14 Brazil had a lot of potential of becoming an important market for Pizza Hut. The group's "ten year plan would put Brazil as the second largest market in the world." Brazil has many advantages. One advantage is that Brazil is a big Country. According to 1993 data, Brazil's population was the fifth largest in the world,

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