Research on a Potential Developing Market

Researchon a Potential Developing Market

Researchon a Potential Developing Market

Beforea company can engage in expanding globally, it is crucial to carryout research to ensure that the new market potential is high formaximum profitability. Brazil’s booming economy and itspopulation’s interest in new mobile and web services makes it anideal market for a hi-tech communication system (Asefeso, 2012). Theindicators the company will use include the market receptivity,growth rate, and consumption.

Brazil’smarket growth rate shows an increasing demand for hi-tech products,which offers substantial growth for foreign investors. The governmenthas prioritized in macroeconomic policies that promote economicgrowth and control inflation. Furthermore, the central bank has alsobeen raising the interest rates to reduce inflation, which makes it afavorable market (Asefeso, 2012).

Additionally,Brazil’s population is over 202 million, which presents almostthree percent of global consumers creating a large market basenecessary for introducing new products. The middle class is alsogrowing as millions of Brazilians are lifted from poverty throughgovernment intervention with most of them earning between $11,500 and$ 29,000 annually (Asefeso, 2012).

Marketreceptivity analysis shows that Brazilians rely heavily on imports,and they are willing to try new foreign products. The current tariffrate in Brazil is 7.7 percent due to the improvement of customsprocedures. Besides, it does not have any non-tariff barriers todeter import of services and goods (Asefeso, 2012).

Themost crucial factors to consider are markets and available resources.The company has to evaluate if the market is conducive to a long-termcommitment. Therefore, it has to expand the customer and market basewithout compromising the existing one. Additionally, the company hasto assess if it has access to enough capital to facilitate theexpansion plan. Thus, it will ensure that the new market will notadversely affect the company’s structural and financial stability.

Finally,Brazil is the largest economy in Latin America and the second largestin the Western hemisphere. It has the one of the fastest growingeconomies in the world, which offers many promising opportunities forbusinesses. However, the company realizes that expanding successfullyin Brazil depends heavily upon the development of strong personalrelationships with the local consumers and other supportingbusinesses.

Reference

Asefeso,A. (2012). CEOGuide to Doing Business in Brazil.Swindon: AA Global Sourcing Ltd.