The consultant chose five countries including Australia, Brazil, South Korea, South Africa, and Taiwan as the potential foreign market for the company XYZ. From the consultant’s list of potential foreign markets, I choose Brazil and South Africa. My research report offers basic knowledge about the two Nations. The report concludes by assessing each of the two countries as potential markets for XYZ Beverage Company.
Brazil
Background
Brazil occupies a large section of the South American continent. It is the largest country in South America both in size and population. The land area of the country is 8,459,417KM 2 with a population of approximately 211,000,000 people. Brazil is made of large cities like Sao Paulo, Rio de Janeiro Salvador, Port Alegre and many more. The country is located some 7,301 km south of the United States. Brazil is the second largest democracy and economy after the U.S. Brazil orders countries like Colombia, Bolivia, Argentina, Peru, Guayana, Uruguay, Venezuela, and Peru. The climate is tropic in most of the part with only the south enjoying related temperate conditions. Amazon forest covers most of the upper part of the country. The southern part is a bit hot and dry. The state has the second longest river in the world the Amazon River.
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GDP and GDP per capita
According to the International Monetary fund (IMF), the nominal GDP of Brazil is R$6.559 trillion. The nominal GDP per capita is $ 10,000 per individual ranking 65 th in the world. It is the 8 th second largest economy in the world and the second in the American continent after the U.S. It is the fastest growing economy in Latin America. The country economy has been gaining drastically after the 2014 recession. The country has invested heavily on infrastructure that fuels resource exploration, the creation of industries, energy production growth and increase in agriculture and food production. The services sector of the economy contributes to the three-quarters of the economy while industry and agriculture contribute to 18% and 6% of the GDP consecutively ( Furtado, 2018) . The country was ranked 12 th in 2016 as having the most significant number of billionaires.
Foreign Direct Investment in Brazil
The Brazilian economy has been attracting external investment since early 2000. Between 2009 and 2011 Foreign Direct Investment in Brazil boomed. The FDI then started to decline as the economy experienced a recession. The economy has been recovering since 2014, and so has the FDI. According to the United Nation Conference on Trade and Development (UNCTD) (2018) report, FDI inflows in Brazil reached $62.7 billion. High consumer spending and foreign companies’ acquisitions were the results of the increased FDI inflow. FDI inflows in manufacturing, energy, transport and storage sectors contributed mainly to the total income from foreign investments. Brazil is attracting foreign investors because of factors such as a large domestic population of about 210 million inhabitants, diverse natural resources, strategic geographical position, and diversified economy.
Brazilian culture
The Brazilian population is extremely heterogeneous. 55% of the population is of European descent, 32% of the people are of mixed heritage while 11% of the population has African ancestry. Almost 100% of the population speaks in Portuguese. It is among the strongest National unity element of Brazil. Brazil has an estimated 65% of the total population affiliated with Roman Catholic. The class system exists in Brazil despite the mixing of ethnicities. There is the upper, middle and lower class. There is a disparity in social aspirations, lifestyle and wage differentials among the three categories ( Flemes, 2016). Brazil . As a result of different ethnic groups in Brazil, Brazilian cuisine varies throughout the areas and encompasses influences from Asia, Europe, China, Japan, Africa, Spanish, Italian and Amerindian. The staple diet is rice and beans. Feijoda is a favorite meal among the Brazilian population which is made of beans mixed with pork and mainly eaten with rice. Street markets are common in Brazil. The country has a vibrant music art, fashion, and culture. The state is known for its beloved samba and bossa nova dances that appeal to all ages. The state has the most famous soccer national team known as the samba boys. The state has lifted the world cup five times with many other international trophies and victories.
Conclusion
Brazil would be a vital market for XYZ Beverage Company. The reason is that the population of Brazil is made up of wealthy individuals who would be willing to pay the premium price for the natural and vegetable drinks from XYZ. For a beverage company, there is a ready market in Brazil because of the tropical climate. Street markets would play an essential role in the marketing of the drink. The large population, especially in large cities, provide a potential market for the health drink. Health-conscious consumers who are a growing group in every country would welcome the company with both arms. Brazil is at the heart of South America, and it would open the continent to the company. Pursuing Brazil would be vital for the company. Overall, Brazil is a potential market that XYZ Company should consider taping into the Brazilian market.
South Africa
Background
South Africa is located to the south most of the African continent. The country covers an area of 1214470km 2 and a population of approximately 57 million people. It is the 25 th largest country in the world. South Africa borders Zimbabwe, Namibia, Botswana, Mozambique, and Swaziland. To the Southeast and southwest, the state is bounded by Atlantic and Indian oceans. South Africa has three capital cities including Cape Town (legislative), Pretoria (executive) and Johannesburg. South Africa is 14,000 km away from the U.S. As a result of its location the country is dry and has been classified as a semi-arid nation. It is characterized by vast drylands such as the Kalahari Desert which is the second largest desert in Africa ( Rogerson, 2017) . The forested areas of South Africa have been ruthlessly exploited leaving smaller patches of the forest. The country is marked by vast coastlines to the south that is used for tourism purposes. The state also has abundant wildlife due to the large natural land where the animals naturally exist.
GDP, GDP per capita
The nominal GDP of South Africa in 2018 was $376.7 billion ranked at 41 st position worldwide. The GDP per capita of the country in 2017 was $6160.
Foreign Direct Investment in South Africa
The FDI inflow of South Africa reached a maximum of 880 USD. The country leads in FDI influx in the African continent. The country experienced FDI inflow contraction between the 2016 and 2017 because of the political instability that faced the nation thus affecting economic activities. In 2017 the state ranked 68 th in FDI receiver which was 13 places less than the previous year (UNCTD, 2018). According to Rogerson, (2017), companies from countries like U.K, U.S, Netherlands, China, and Germany have invested heavily in retail, manufacturing, mining, transportation and financial sectors in South Africa. The country has attracted investors because of factors such as abundant natural resources, large population, relative political stability, diversified, productive and advanced economy compared to other countries in the region.
South African Culture
South Africa like many other African countries has a diversified cultural and ethnic background. Different languages exist in South Africa as the urban South Africans speak in Afrikaans or English. Other languages like the Zulu and the Khosa languages are significantly used along with eight different words. Religion form a large part of the South Africans. 65% of the populations are protestant Christians while 7% are Roman Catholic with the rest of the community being Islamic, traditional African religion and unaffiliated population forming 28% of the population ( Rogerson, 2017) . South African cuisine is a combination of European and African meals. Typical South African dishes would include amasi (fermented milk) Biltong (salted meat) bobotie which is a loaf with baked egg. African vegetables and herbs are common among South Africans. The people of South Africa are known to preserve their culture through fashion art and music. Traditional marriages are common which include polygamous marriage.
Conclusion
The vast majority of the South African population might not provide a potential market for the company. The reason is that low income among most South Africans affects their lifestyle and especially the nutrition part. Besides the climatic conditions being favorable for beverage consumption the population lacks the motive to consume the product. The product would be greatly accepted in the urban areas because of the diverse population from most of the world. If the company invest in South Africa, it will open an opportunity to spend in the rest of Africa which would provide a large market. However, healthy drinks are not a significant concern among Africans. Overall I would not encourage the company to invest in South Africa.
References
Flemes, D. (2016). Brazil: strategic options in the changing world order. In Regional Leadership in the Global System (pp. 105-124). Routledge.
Furtado, C. (2018). Economic Development of Latin America. In Promise of Development (pp. 124-148). Routledge.
Rogerson, C. M. (2017). Geography and economy in South Africa and its neighbors . Routledge.
United Nation Conference on Trade and Development (UNCTD), 2018. World Investment Report: Investment and new industrial policies.
