Businesses, especially in the entertainment industry, are seeking to grow their market presence by expanding to emerging economies like Brazil, China, and India among others. As a film production company, the emerging economies like Brazil provide huge markets because of their expanding middle class that loves entertainment. Therefore as a company, the decision to expand operations into these markets is strategic and aimed at increasing revenue and the bottom line. Our expansion into Brazil is founded on the need to tap from the vibrant film and video production industry in the country. The industry is growing considering the fact that Brazil is the fifth most populous country in the world, and the ninth largest economy.
Our Company: Products and Services
Our organization, Film Production Inc. specializes in the production of film and videos for a wide variety of clients in the business and entertainment industries. Our products and services include designing and producing advertisements for companies, designing T.V. commercials, educational literature for young viewers, and running big screen projects in different countries. While we may not be an A-list production company in the world, our vision is to create products that meet consumer needs in a fast changing film production industry. Apart from these products, we offer consultancy services for T.V commercials, public relations, and talent scouting in frontier zones in the world.
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Our objectives to expand internationally
The need to expand internationally is both strategic and generic. Strategically, going international will allow us to expand our market and increase sales. The implication is that as an organization we seek to make profits by increasing revenue. Secondly, we believe that our organization can contribute to the growth of film industry in Brazil. Our strategy is to expand into new markets overseas as this shall boost our overall revenue. Expanding into new markets provides us with the opportunity to innovate and understand market dynamics. Further, it allows us to understand the international market structure and the kind of growth strategy that is most applicable in the country.
Expanding internationally will allow us to diversify our risks since operating in several countries, for instance Brazil, will insulate us from economic vagaries in other economies (KPMG, 2016). Diversification will allow us to understand the market needs in Brazil that may not be similar in other countries. Therefore, the need to diverse will allow the organization to protect its investment (Kokemuller, 2017). For example, Brazil is experiencing exponential growth while markets like the United States and Europe are recording lower growth. Therefore, our expansion is meant to address these differences. Our final objective to expand is generic since as an organization, we need to grow beyond our national borders and find new exciting and attractive markets and opportunities.
How our company makes money
As an organization, we make money from selling our product and services to different categories of clients. The organization has corporate and individual clients, both in public and private sectors. We charge standard rates for our products and services. The organization makes most of its revenue from film production, designing T.V. commercials, and consultancy to other organizations.
Interpretation of data in making decision
According to KPMG, Brazil has a vibrant investment framework for those willing to invest in most of the industries, including entertainment and business industries. As stated, the country is the ninth largest economy with a growth project of close to ten percent every year. The country’s GDP is among the top twenty in the world with an expanding middle class (KPMG, 2016). The country’s tax regime is friendly, with a withholding tax if 15 percent applicable to digital products. The rate is friendly compared to other emerging markets that may have lower rates but are protective of their film industry, for instance India and China. The country’s thriving economy is driven by a rising middle class and over forty percent of its population consists of people below the age of thirty-five (Nagib, 2014). This market segment provides immense business opportunity to our organization.
These factors and government’s stability were instrumental in our decision to expand to the South American economic powerhouse. Again, the country enjoys a huge geographical advantage because from Brazil, it is easier a company to expand to the other countries in the region. Brazil offers the opportunity to develop synergies in our resources and strengths. In the country, the organization will have access to a pool of resources, especially expertise human resource (Dent, 2016). Further, it is possible to have distribution efficiency in Brazil as compared to other countries in the region.
Decision to expand internationally
While some of the earlier reasons explain why Film Production Inc. seeks to expand internationally, our motive and justification to venture into new markets, particularly emerging markets is to protect our business and reduce risks. Market diversification offers us the opportunity to develop new product, reach new clients, and understand new market features and trends that we must respond to so that we can remain competitive (Lessard, Lucea & Vives, 2013). Taking a competitive advantage in any market requires having an aggressive international presence. The long-term sustainability of our operations is hinged on our ability to exploit new markets, especially emerging economies that provide immense growth opportunities, development challenges and vital growth lessons. The decision to expand internationally implies that Film Production Inc. will explore new markets and seek talent growth for long-term sustainability.
References
Dent, A. S. (2016). Policing the unstable materialities of digital‐media piracy in Brazil. American Ethnologist , 43 (3), 424-436.
Lessard, D., Lucea, R., & Vives, L. (2013). Building Your Company’s Capabilities Through Global Expansion. MIT Sloan Management Review , 54 (2), 61
KPMG (2016). “Expanding into Brazil.” Accessed on April 1, 2017, from https://home.kpmg.com/ie/en/home/insights/2010/06/expanding-into-brazil-pub1.html
Kokemuller, N. (2017). “Why Do Businesses Operate Internationally?” Accessed on April 1,2017, from http://smallbusiness.chron.com/businesses-operate-internationally-78226.html
Nagib, L. (2014). Reframing Utopia: Contemporary Brazilian Cinema at the Turn of the Century. Portuguese Cultural Studies , (1), 3.
