You are the CEO of a large company seeking to invest in eith

You are the CEO of a large company seeking to invest in either Central or South America and have directed your staff to prepare a report and recommendations. Two of the countries you are assigned are Brazil and Venezuela, and it is your task to make the recommendation between these two countries. Assess the various risks in each of these countries. Which country would you recommend and why? Explain your answer with a well-constructed and cogent response.

Solution

Before entering into any international market it is vital to do extensive reserach to find out the feasibility of the entrance. When a firm has two or more alternatives of international market to enter, it can make extensive research in each of the market and then can compare to make optimum decision.

While assessing the markets, here Brazil and Venezuela, various environmental factors of these markets along with the firm\'s SWOT that will match the factors need to be examined closely. The type of product/good that the company is going to offer is also an important factot that would affect the choice, as a good may have more demand in a country where other factors may not seems feasible when compared to another country. Among these factors there would be some opportunities that could be grab while others will be risk that could impose threats to the firm.

Risks that could be assessed may be assessed by having a glance over the past, present and future scope of these two nations.

Brazil is a nation of good population and abundant in natural resources that could provide easy access to the inputs for the firm. But it is also a nation that is wrought by political corruption on the verge of collapse. These corruption issues have been faced by Brazil since the boom that it witnesses few years ago when it grew three times faster than USA and its economic size surpassed even the Grreat Britain\'s economic size. These corruption issues are with large state owned oil compamy named Pertobas as well as falling approval mistrust of the elected officials. One economic benefits that the firm can reap is the huge investment of the Company in infrastructure in anticipation of 2016 Olympic games.

Venezeula can also be seemed as a corrupt socilaist economy by run by corrupt officials, who waste all the potential profit associated with their huge reserve of crude oil. Existing US and other firms in the country are being badly hurt because of ongoing devaluation of the country\'s currency Bolivar. Brain drain is another risk associated with the economy. The brain drain is attributed to a repressive political system, lack of economic opportunities, steep inflation, a high crime rate, and corruption. Thousands of oil engineers emigrated to Canada, Colombia, and the United States following Chavez\'s firing of over 20,000 employees of the state-owned petroleum company during a 2002-2003 oil strike.

Overall if we compare the two economy, Brazil seems more favourable than Venezuela.