Wednesday, January 4, 2012

Diversify Your Markets to Increase Revenue: Brazil

Right now the economy in the United States is struggling. Sales are down, the unemployment rate is up, and investments in real estate and the stock market are bleak - let's just say the US has seen better days. The good news is there is a solution to this - opening up new markets, either domestically or abroad.

There is a simple truth we must consider, and that is whenever one economy is struggling, another is thriving. So instead of being depressed about what is going on, as business leaders we should look at creative ways of how we can balance our businesses by serving new markets. Today there is a great place to target, and that is Brazil.

The economy in Brazil is thriving, and Rio has now passed New York as one of the most expensive places to live in the world. GDP growth in 2010 was 7.5% and expected to be similar for 2011. Classified as a developing nation in Latin America, in recent years Brazil has really turned itself around and is emerging as a new powerhouse and is the leading economy in not only Latin America but the world, being ranked last year as the 31st fastest growing economy out of over 200. More importantly, they have averaged over 4% economic growth for the past 5 years, a very strong indication the growth is stable. Compare that to the United States, which has seen an average economic growth over the same period of .82%.

Business leaders should expect this to continue for at least another 5-10 years. Brazil has been elected to host the World Cup in 2014 and the Olympics in 2016, two events that individually have had tremendously positive economic impacts on countries (96 Olympics in Atlanta, 10 World Cup in South Africa). Having them back to back like this has never been seen, so the business environment should be intense. The reasons here are that when hosting these types of events, countries and businesses make huge investments in infrastructure and real estate anticipating the huge wave in tourists and external investments.

While this sounds like a great opportunity, jumping straight in will not necessarily lead to an increase in sales for your company. There is a different language, culture, business etiquette, and overall way of life that unless businesses cater their messages to accomodate they will fail.

First, one should start by studying the language, which is Brazilian Portuguese (slightly different that that of Portugal, similar to difference from the English spoken in the US and England). Not that one needs to become 100% fluent, but having an understanding of the language and at least attempting to throw in a few words here and there will go a ver long way. Even doing this domestically can help attract Brazilians with fat pockets to your stores, as can be seen with retail operations in Miami:

Next, if you have never conducted business abroad, you should look into a good cross cultural communication training program. Some psychology and communications experts report that only 7% of communication is verbal, and the remaining 93% is non-verbal. This includes the things like distance in between people, the clothes you wear, what different colors represent, the tone in your voice, and how you manage time. This all has a huge impact on the business etiquette, which one must be very respectful of in order to succeed in Brazil, where people do business with people and not companies.

Bolder Languages offers programs that can help you accomplish your goals, including classes in Portuguese and Cross-Cultural Communication, as well as market research, consulting, and translation services.

In the meantime, here are some other resources that will help you prepare for a business venture in Brazil:

Budget Travel Blog

Cuba Central - The Blog