The Brazilian Macro Environment Pestle Analysis Marketing Essay
Investment climate is the economical, institutional, policy, and regulatory environment in which firms operate. A PESTL analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T.L. is an acronym for the Political, Economic, Social, Technological and Legal factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats.
Brazil is currently a country with a stable, proactive government and there is virtually no political instability at the moment. However, things can easily change, as they did through out the modern history of Brazil. Political conditions can become volatile, and this threat remains from election to election. Business conditions that change rapidly and social extremes that exist don’t add to country’s attractiveness.
Corruption is still a big issue in Brazil. Opening an operation in Brazil may require additional payments to government officials, which can present a big obstacle to entering a market. According to Transparency International, Brazil holds 70th place in level of corruption among 180 countries, higher then such economies as Cuba, Turkey and Bulgaria.
Due to large population and inflow of FDI, Brazil has extremely high potential for growth. The gap between rich and poor is decreasing gradually, and there is a significant trend of growing middle class. Good news is that Central bank has inflation under control and the risk of domestic currency devaluation is low. Brazil's currency, the real, was introduced in 1994, and is largely seen as a success. Currently, it is considered to be overvalued against the dollar, which hurts exports and helps imports.
Government is clear when it states that it has equal treatment for both foreign and domestic enterprises. There is abundance of unskilled and semi skilled workers,...