Question

Discuss the Pros and Cons of foreign investment in retail companies in Brazil. What are the specific barriers to entry? What strategies can be utilized to circumvent this challenge? What are the competitive advantages for improving global merchandising and retail organizational performance?

Answer 1

Being a developing nation a country like Brazil should undoubtedly establish economic ties in the form of foreign investment with the outside world in order to be a strong economy ,the country has been a fluctuating economy so far with several ups and downs however it has its several pros and cons regarding to the flow Foreign direct investments.

It has advantages like huge demand for products by middle and poorer sections in the country,huge man power ,abundant natural resources like forests,cheap labour availability, port cities for trade etc with all these foreign nationals maximise Thier profits in comparison with their investments and the cons include stringent labour laws,economic barriers to the free entry into market,high taxation system, less developed technology,absence of free economy ,non -availability of basic infrastructure facilities like roads and water resources near the proposed area etc. Strategies like stable government ,privatisation of economy, abolishing high taxes ,granting free access to market entry,providing basic amenities like roads , decreasing taxes etc,,controling the prices etc will help rebuild a strong economy in the country.

The competitive advantages mean the environment and the circumstances that help the economy . Brazil is the most populous country in south America,has port facilities,GDP growth rate is higher year by year here,cheap raw materials are available, incentives to promote sustainable economy, liberalisation of state economy,fiscal consolidation,cost of living are low, globalisation of economy,huge customer availability are some of the advantages to be a strong global merchandise and retail organisation .Thank you.