Wal-Mart Operations in Brazil: an Emerging Giant

Brazil has seen its share of economic downturn in the past century. Brazil’s economy has gained strength since. In 90’s many economic reforms were put in place including tax reform, privatization, deregulation, strict fiscal policy, trade liberalization and a structural and legal framework was set up to attract foreign investment. Introduction of new currency the Real, in 1994 helped cut inflation. Market reforms turned Brazil to become an open economy and began growing again in 2009. Access to most sectors is generally favorable through imports, local production or joint ventures.

The purpose of this paper is to demonstrate how Brazil, a country with an extremely high rate of inflation and low growth, positioned itself as the 7th largest economy of the world and what are the challenges that the country is facing. First of all the Real Plan of Fernando Henrique Cardoso and how it helped the country to stabilize its economy and drop down the inflation rate will be discussed. Secondly how his successor’s policies, Luis Inácio Lula da Silva, improved country’s economy. At the end the challenges that Dilma Vana Rousseff, the current president, is facing

The Federative Republic of Brazil is Latin America's biggest economy and is the fifth largest country in the world in terms of land mass and population with about 192 million people. Brazil’s economy, the 6th largest in the world, grew 2.7% in 2011. Growth slowed due to reduced demand for Brazilian exports in Europe and Asia, despite solid domestic demand and a growing middle class.

Brazil, like many Latin American nations, is a country undergoing rapid change. The nation’s push to transition from newly industrialized to develop country has forever altered Brazil’s physical geography, level of development, and economic activity.

Wal−Mart Stores is a global retailer operates in three business segments: Wal−Mart Stores, Sam 's Club and International. Co. 's Wal−Mart Stores retail formats include: Supercenters, Discount Stores and Neighborhood Markets while Co. 's Sam 's Club segment consists of membership warehouse clubs, which operate in the U.S., and the segment 's online retail format, samsclub.com. Since January 31st 2008, Wal-Mart’s International segment consisted of retail operations in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, and the U.K. and Wal-Mart has operated 971 discount stores, 2,447 supercenters, 591 Sam 's Clubs and 132 Neighborhood Markets in the U.S”

Brazil is a large country which located in South America and has the second largest economy in America, after the United states. Brazil's capital city is Brasilia and it has the largest population in South America. As we will present in this paper, the two economic indicators: Gross domestic product (GDP) per capita and the unemployment rate. And the two investment incentives, which are two tax incentives: repes and reporto.

The stores of Wal-Mart are the biggest retail company that operates within the United States of America. The company has received the first position in the Fortune 500 Index Fortune Magazine for a substantial number of years. The company has managed to embrace a distinct corporate strategy whose goal revolves around dominance into the already existing retail market. There has also been an increase in the manner for which expansion activities of the business are conducted. Numerous ventures have been made into the United States, as well as other international markets.

Initially Walmart presumed that their age old strategy that has worked for them for many years would be easy to replicate in a global setting. The question you have to ask yourself is, why wouldn’t it? Part of the problem is that Walmart failed to focus on the four elements of a global organization; Organization Structure, Management Processes, People, and Culture (Yip & Hult, 2012). When Walmart decided to make their first move in the early 90’s to enter the global market, they were lacking mostly in organization structure, management processes, and culture. The mentality of being the biggest retailer in the United States was not enough, operating in the global arena is different.

One of the reasons by Brazil’s economy is an important player in the world today is its size. They are the world’s fifth largest country by size and the ninth largest by nominal GDP. Other comparisons include the fact that they represent the largest economy in Latin America and second largest in the Americas. Because imports and exports are a significant component of Brazil’s GDP, at 27%, trade represents a key factor in Brazil’s economy ("Brazil Economy: Facts, Population, GDP, Inflation, Business, Trade, Corruption," n.d.). Although the government interference and a system that is characterized as inefficient and a challenge for market entry, Brazil continues to work toward an improving economic and social environment for its people. In

Brazil is by far the largest and most populous country in South America. The country gained its independence in 1822, maintaining a monarchical system of government until the abolition of slavery in 1888 and the subsequent proclamation of a republic by the military in 1889. For more than a half a century a military

The Wal-Mart / Sam’s Club chains are the biggest retail companies that operate within the United States of America. The company has received the first position in the Fortune 500 Index Fortune Magazine for a substantial number of years (Wal-Mart History, 2014). The company has managed to embrace a distinct corporate strategy whose goal revolves around dominance into the already existing retail market. There has also been an increase in the manner for which expansion activities of the business are

Multination corporations are the business whose primary goal is to maximize profit within a competitive environment (Preston). Virtually all of the activities of a multinational corporation can be explained as more or less logical attempts to achieve this dominant end. In process of achieving this dominant end Multinational Corporation put a side their moral and ethical standards. For example, Walmart is a multination corporation they have more than 11,098 retail units in 27 countries (Walmart Corporation). But when Walmart was expending to Mexico, their primary focus was to maximize profit and beat its competition (Barstow). Their Walmart de Mexico was the most profitable unite for Walmart Corporation. But when they were planning to set up Walmart in Mexico, to get the permits they bribed mayors and city council members, obscure urban planners, and bureaucrats who issued permits – basically anyone with the power to thwart Walmart’s growth. Walmart’s statement of ethics says, “We do not tolerate, permit, or engage in bribery, corruption, or ethical practice of any kind (Walmart Corporation).” In their relentless pursuit of growth, some of Walmart’s chief executives, publicized commitment to the highest moral and ethical standards (Barstow).

These policies enabled Brazil to get monthly inflation rates down from 45% during the second quarter of 1994 to an average of less than 1% in 1996 (Inflation.eu 2012). As a result the economy grew by 6% percent in 1994, and by 4.2% and 2.9% in 1995 and 1996, respectively (Clements, B. 1997) as domestic demand increased fuelled by lower inflation and higher real wages. The successful implementation of the Real Plan not only helped stabilize the economy , it also showed real economic discipline necessary to attract the foreign capital and investment.

Walmart has retail store interests in Brazil, China, Puerto Rico, Guatemala, Argentina, and Brazil. The retail store sold the stores that it had in Japan and Germany. Wal-Mart also operates Sam’s Club, which is a membership store that started operations in 1983. As of 2014, Sam’s Club had sales that exceeded those of

The global player Wal-Mart operates in 14 different markets all around the world, serving 176 million customers every week. Today, the second biggest company of the world, concerning turnover which amounts to 312,427 million US-$, categorizes its operational facilities into five divisions. Among those divisions are the Wal-Mart discount stores, offering convenience and low-priced goods. Wal-Mart supercenters are the biggest stores, being open 24/7 hours and employing a workforce of 350 people, selling all kinds of groceries and general merchandise at the lowest possible price. Wal-Mart neighborhood markets are specified in