How Globalisation Influence Policies and Decision Making on Brasil Foods - Case Study Example

Prepare An Essay On Brazil And Brasil Foods (After Going Through The Harvard Business School Case Study) Table of Contents Table of Contents 1 1. Describe and Analyse the Primary Internal and External Influences on Brazil 2 2. Evaluate the Impact of Globalisation 4 2.1 Analyse How Globalisation Influence Policies and Decision Making On Brasil Foods 5 2.2 Critically Undertake Internal and External Analysis of Brasil Foods 6 2.3 Examine How Brasil Foods Managed Change and Complexity 7 References 10 Bibliography 13 1. Describe and Analyse the Primary Internal and External Influences on Brazil Regarding to analyse the primary internal and external influences on Brazil, there is a need to comprehend the impact of globalisation. Globalization plays a crucial role in the integration of the economy of a domestic country with the world economy. A country like Brazil with strong agriculture based economy has certainly made rapid transformation in the agriculture field and in other important sectors as well largely due to the derived benefits of globalisation. One of the primary benefits which can be obtained developing nations from globalisation is influx of greater amount of Foreign Direct Investment (FDI). Brazil also took a courageous step concerning this aspect by permitting 100% FDI in the major sectors like retail, oil, gas, iron and steel among others. This external influence of globalisation has facilitated an economic boom in Brazil in the past decade. Due to the positive influence of globalisation, the disposable income and purchasing power parity aspects have also augmented substantially which can be noticed from the expansion of the economy by 7.5% in the year 2010. In terms of another crucial external influence of globalisation, it is observed that foreign workers belonging to varied income levels have started to come to Brazil, which has certainly enabled to boost the country’s economy. In the agriculture sector as well which is the key industrial segment of the nation, owing to the positive influences of globalisation Brazil has started to make use of innovation along with agriculture based agronomic science. This aspect has facilitated to augment food supply and production in turn enabling the country to generate greater industrial revenue (Nejati, 2008; Bell & Kindred, 2012). In terms of internal influences of globalisation on Brazil, it is observed that by the year 2010 the nation had transformed into one of the foremost exporters of food in the world. The initiatives such as deregulation and privatisation have played a pivotal part in the economic emergence of Brazil. These factors have substantially been influenced by globalisation as the privatisation and deregulation are meant to attract greater investment in the nation which can facilitate overall development (McGraw-hill, n.d., Bell & Kindred, 2012; The Times 100, 2013). Brazil has come in the spotlight of investors also because of possessing huge manpower as it is the fifth most populated nation. Additionally, this factor has also contributed to the nation possessing a huge market size thus ensuring continuous positive growth of the Gross Domestic Product (GDP). Moreover, the people of the nation have started to embrace a number of positive influences of foreign tradition and culture such as in case of accepting foreign apparel and clothing items. Overall, these benefits have transcended from globalisation based influences (Bharat Book Bureau, 2013). 2. Evaluate the Impact of Globalisation Globalisation is the method of interchanging the products, goods, ideas and various aspects of culture in the worldwide context. It helps the national along with cultural resources of nation to be promoted internationally including transportation enhancement, telecommunication, infrastructure development along with developing future prospect in economy and interchanging of the culture. Therefore, it can be said that the impact of Globalisation bestows on especially five aspects such as political, social, economical, cultural, ecological along with ideological (Rodrik & McMillan, 2011). 2.1 Analyse How Globalisation Influence Policies and Decision Making On Brasil Foods Brasil Foods, an organization operating in the food & beverage segment was established in 2009 in Brazil. It is the world’s tenth biggest food company as well as second largest in Brazil. Presently, the company is operating in more than 110 countries having 60 industry plants and 24 global offices with the mission of providing best quality of products at affordable price. It has been inferred that Brazil is the land of agriculture therefore this organisation easily can obtain raw fruits and vegetables for the prepared products at quite a cheap price. Moreover, the company can also obtain cheap labourers due to the benefits derived from the availability of substantial manpower. These facets firstly help the organisation to minimise its production cost. Therefore, the organisation has 60 manufacturing plants in Brazil and four in the worldwide context. Through the helping hand of globalisation and government policies of the Brazil, the organisation presently has reached world-wide prominence with its number of product offerings. Two most important factors of globalisation i.e. economy and political influences have facilitated Brasil Foods to take decisions for making expansions in the overseas markets (Ogutcu, 2002). Economic globalisation indicates strengthening of the economy by international trade and finance, along with expanding the business landmark by the corporate giants. The policies primarily influenced by globalisation such as privatisation and deregulation have certainly impacted Brasil Foods in terms of determining to go beyond its domestic market and explore international business benefits. Moreover, tax policies and foreign business related policies have also influenced Brasil Foods. Achieving economies of scale through international operations along with global dominance with the positive support of globalisation has been the key influential factor on Brasil Foods (Gundlach, 2000). 2.2 Critically Undertake Internal and External Analysis of Brasil Foods In the present global scenario of the management, an organisation’s internal prospects can be determined by its strengths which can be in the form of stable human resources, financial capabilities and efficient management decision making. However, certain lingering weaknesses can hamper the sustainable prospects of an organisation in the long run (BHP Information Solutions Ltd. n.d. SWOT analysis). In terms of Brasil Foods, it is determined the core internal strengths of the organisation are firstly, it has strong financial position by expanding market share globally, secondly, it possesses various product portfolios with a huge segment in the food & beverage, thirdly, good availability of the product world-wide with a strong supply chain distributor network, fourthly, the company has governing market position with a strong employee base of over 110,000 globally, fifthly, it has an availability of the cheap raw material, and moreover the brand presence is in over 100 countries (Bell & Kindred, 2012). Regarding internal analysis, the weaknesses of the organisation also need to be determined. The weaknesses include firstly the brand awareness and recall aspect which is quite insignificant for the company as compared to other competitors. Due to the fact that Brasil Foods has aimed to establish a strong presence in the international market, thus there is need to focus on advertising. In addition, the brand has limited penetration in other global emerging economies which can hinder growth prospects by a considerable extent (Bell & Kindred, 2012). On the other hand, with regard to external analysis, initially the opportunities of the organisation need to be ascertained. Concerning this facet, the most important point which comes first is the growing organic food market and consumer preferences for good quality products. Regarding this aspect, the positioning strategy of Brasil Foods that is to offer the best quality products at a fair price is very fruitful to capture the huge future market. Moreover, the global expansion into the emerging economics can also enable the company to leverage greater beneficial outcomes. Furthermore, Brasil Foods can also focus on the global tie-ups and acquisitions of the small brands which can leverage major benefits to the company in the long run (Bell & Kindred, 2012). Finally, the analysis of the external threats of the organization can enable it to prepare contingency plans against such affects. In this regard, growing inflexible government rules and regulations can hinder the smooth operations of the company in the global dimension. Additionally, the biggest threat can be determined as the increasing competition from the existing players such as JBS, Marfrig, Tyson Food, and Bunge Ltd among others. Moreover, fluctuating global prices of products due to unstable currency value in the global context can also create a major impact on Brasil Foods in its global operations (Brasil Foods, 2010). 2.3 Examine How Brasil Foods Managed Change and Complexity The terms ‘change’ & ‘complexity’ are the most common concerns now-a-days in the global market due to the emerging competition as a result of globalisation. These aspects can occur from various ways including social & ethical issue, political factors, economical & financial condition, consumer behaviour and complexity of tasks among others. However, to sustain in the market the management of Brasil Foods has to remain focused on the mission and vision of the organisation and the strategies taken by the competitors. Contextually, to manage it the organisation has focused on certain important facets which include making integrated operations of the whole business process in the internal and external world, offering focus on the changing demands of the customers, ensuring its commitment to the aspect of diversity and the acceptance of any difference, sustaining constant innovative spirit, ascertaining quality of the products and rendering excellence in the process, providing best quality of the product at the affordable price and maintaining world class logistics & supply chain. Besides, to manage the change and complexity, the organisation also has remained focused to engage with the stakeholders for the decision making process in any critical situation. The company has a close relationship with them to identify the various problems and to improve the management for ascertaining sustainability and growth. They are also very focused about the network reinforcement in the market to reach continuously and quickly to the customers. This is because the products of the company comprise food and dairy products, so timely delivery is most important to maintain a long run relationship with the customers (Brasil Foods, 2010). Another important point regarding change was the government polices along with rules and regulations about the mergers and acquisitions of the small companies in the domestic field. The government of Brazil had taken certain rules about the mergers and acquisitions and blocked the process. However, the management of Brasil Foods tactfully negotiated with the government and told that to become a global player and to compete in the international market it’s most important to become financially strong, and regarding this mergers and acquisitions will be helpful. The government finally agreed with its proposal for increasing the exports thus facilitating in earning more foreign currency. As a result, the organisation merged with Perdigeo & Sadia to become one of the biggest food & beverage companies of the world (Wright, 2008). References Bell, D. E. & Kindred, N., 2012. Brasil Foods. Harvard Business School. Bharat Book Bureau, 2013. PESTLE Analysis of Brazil 2012-2017. Research Index. [Online] Available at: http://www.bharatbook.com/market-research-reports/PESTLE-Analysis-of-Brazil-2012-2017.html [Accessed May 03, 2013]. BHP Information Solutions Ltd, No Date. SWOT Analysis. Self Analysis. [Online] Available at: http://www.iod.com/intershoproot/eCS/Store/en/pdfs/st1swot.pdf [Accessed May 03, 2013]. Brasil Foods, 2010. Strategy & Management. Annual & Sustainability Report 2010. [Online] Available at: http://www.brasilfoods.com/ri/siteri/web/arquivos/BRF_Annual_Report_2010.pdf [Accessed May 03, 2013]. Gundlach, E., 2000. Globalization: Economic Challenges & the Political Responses. Intereconomics, pp. 114-118. Nejati, M. & et. al., 2008. Issues in Global Business and Management Research: Proceedings of the 2008 International Online Conference on Business and Management (IOCBM 2008). Universal-Publishers. McGraw-Hill, No Date. Internal Situation Analysis: Evaluating a Company’s Resources, Cost Position and Competitive Strength. Identifying Competitively Important Resources and Capabilities. . [Online] Available at: http://highered.mcgraw-hill.com/sites/dl/free/0078137144/814632/Sample_Chapter_Upd.pdf [Accessed May 03, 2013]. Ogutcu, 2002, Foreign Direct Investment and Regional Development: Sharing Experiences From Brazil, China, Russia And Turkey. FDI in Brazilian Economy. [Online] Available at: http://www.oecd.org/gov/regional-policy/2489844.pdf [Accessed May 03, 2013]. Rodrik, D. & McMillan, S., 2011. Globalization: Structural change and productivity growth. National Bureau Of Economic Research. [Online] Available at: http://www.nber.org/papers/w17143.pdf [Accessed May 03, 2013]. The Times 100, 2013. Business case study: External Environmental theory. Business Theory. [Online] Available at: http://businesscasestudies.co.uk/business-theory/external-environment/external-influences.html#axzz2S7N3GE0 [Accessed May 03, 2013]. Wright, A., 2008. Innovation in Brazil: Public polices and Business Strategies. The challenge of Innovation. [Online] Available at: http://www.wilsoncenter.org/sites/default/files/brazil.innovationreport.web1.pdf [Accessed May 03, 2013]. Bibliography Brown, C. & Rennert, P., 2001. Doing Business in Brazil. Foreign Affairs & Trade. [Online] Available at: http://www.dfat.gov.au/publications/brazil_business/brazil.pdf [Accessed May 03, 2013]. International Markets Bureau, 2011. Global Trends. Sustainable Food and Beverages. [Online] Available at: http://www.gov.mb.ca/agriculture/statistics/food/global_sustainability_trends_en.pdf [Accessed May 03, 2013]. Lynne Rienner Publishers, 2008. The Brazilian Economy: Growth and Development. The Environmental Impact of Development, pp 311-337. Noronhaadvogados, 2011. Noronha Advogados Global Lawyers. Brazilian Economy & Foreign Trade in Global Context. [Online] Available at: http://www.noronhaadvogados.com.br/pale/dng-28102011.pdf [Accessed May 03, 2013]. Teixeira, A., No Date. An Industrial Policy for Brazil. A Brief Sketch of Brazilian Industry. [Online] Available at: https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&ved=0CEkQFjAD&url=http%3A%2F%2Fwww.dc.itamaraty.gov.br%2Fimagens-e-textos%2FIndustry01-AnIndustrialPolicy.pdf%2Fat_download%2Ffile&ei=Q4mDUdfQAsSMrQe1_YCgAQ&usg=AFQjCNGBj7DAYUk4PkrhpokIc8A1yguwPg&sig2=3QKwIr0tjJFu9dVuC5vjTg [Accessed May 03, 2013]. Read More