Question

You are the Director of Global Compliance for a U.S. company that just created a revolutionary new portable personal computer (PPC) that is half the size of a laptop, performs the same functions as existing laptop computers but costs only half as much to manufacture. Several patents were filed and approved protect the unique design of this computer. Your CEO asked you to formulate a recommendation for how to expand into South America.Evaluate the pros and cons if you were to export from the United States

Answer 1

Product: A portable personal computer

Region: South America, Argentina, Venezuela, Brazil. Brazil is the fifth largest country in terms of population and area, and largest in Latin America and South America. Brazil has a population of 200 million and is the seventh largest economy in the world. The three countries contribute 270 million populations of South America.

A PEST will be conducted to analyze the macro environment factors as follows:

Factor	Country specific (Brazil, Argentina, Venezuela)	Marketing strategy for Portable personal computer
Political	The government is stable but open to change overnight, Brazil is 72nd most corrupt nation in a list of 180 countries. Bribery is rampant in all three countries.	The environment is suitable for our export of portable computers. We will follow our ethical practices and ensure compliance as per US laws
Economic	They have a high FDI and potential growth is extremely high. Labor costs are low and the gap between rich and middle class is reducing. corporate tax is 15% and tax structure is expensive when compared to some European countries. The inflation rate is under control but the devaluation of currency discourages exports.	The growing middle class is an encouraging market for our organization. We can plan our launch with a low to idle range price to encourage consumers to try our new product. The countries encourage trade and are open to new products.
Social	20% of the people live under the poverty line. The people like to spend on luxury products and technology. The middle class is growing fast. They like investing in big brands. All three countries have above 90% literacy rates.	The people enjoy luxury and like trying new technology which is a good sign and our brand name which is already well established with encourage buying by the South American customers. The literacy rate is high also encourages us to sell our new technology which will be well accepted.
Technological	They have a weak technological infrastructure. They are investing in infrastructure heavily. Brazil ranks as 53rd in IT sector in the world. The three countries contribute more than 90% of total electricity produced in South America. In these countries, 50% to 60% population has access to the internet. Brazil is the highest spender on R&D	They already have an interest in the IT sector and we can suitably place out the product in the upper segment at a lower entry price and promote sales. We can use offline and online promotions.
Legal	In trade openness Brazil ranks 86th, Venezuela most closed and Argentina 96th. All three are part of the trade bloc.	They encourage trade relations and are open to new products, which encourages us to launch our computer. Further, they also have property laws in place to protect our rights.
Environment	Brazil turned down a deadline for deforestation.	Our product does not violate any environment norms or legislation

To sum it up our organization has a good potential and scope to enter the South American market. Our product can use an entry-level price strategy to target middle class and upper middle-class segment. The special focus will be on the young, a technologically well-informed customer who like to buy luxury products. We will use TV ads, social media and blogs to inform customers about our product line and give a comparative analysis.