This document outlines IKEA's international marketing strategy with specific reference to Brazil. Brazil has no cultural conflicts and is an untroubled multiracial society that respects all immigrants and religions. Politically, the country is a conflict-free democracy with stable public institutions that uphold international laws and promotes progress and peace between nations. Some of the key Brazilian solid macroeconomic fundamentals are the key factors driving the sustainable growth of the country. Factors such as its consistent fiscal policy, inflation under control, institutional stability, declining government debt, rising GDP ratio, growing industrial output, and decreasing interest rates play a significant role in the progress of the nation. According to Latin America's largest science, technology and innovation system, investment grade forecast by 2007/2008, cultural differences are bound to exist in business. Brazilians feel that informal relation is very important in negotiation. They aim at creating a trustworthy climate with their interlocutors. Brazilians are very particular about the value of the product and novelty; and often cross check the same with European and American trends.
[...] Those who have set up shops in Brazil have varied results directly related to their ability to adapt to the localmarket. It is important to define adapted policies and procedures for the local Brazilian market. The number of selling points is estimated to more than 20,000, among 4,500 which are positioned in the upmarket. The concept of ‘furniture and decoration megastore' was introduced by the brands Tok & Stok, and ETNA. São Paulo concentrates on the most important shopping centres specialized in furniture, of which the first four are: D&D Shopping, Lar Center, Interlar Aricanduva and Interlar Interlagos. [...]
[...] Then, IKEA has been operating in the international environment since the 1970s with franchising. So IKEA is used to adapting to different countries as it is present in 24 countries in four continents. IKEA's objective is to set up in Latin America and become the main actor in the furniture market. Furthermore the workforce is cheaper and foreign production costs may be less than domestic. And with 16,104 Brazilian manufacturers it should be easy to find the one which be able and quite competent to satisfy IKEA's demand in furniture production. [...]
[...] peace between nations. Brazilian Solid macroeconomic fundamentals: the key factors driving sustainable growth Consistent fiscal policy Inflation under control Insitutional stability Declining government debt / GDP ratio rising Growing industrial output Decreasing interest rates Latin America's largest science, technology and innovation system Investment grade forecast by 2007/2008 Cultural differences in business - Informal relation is very important in negociation - You must create a trustworthy climate with your interlocutor - Brazilian people are very demaning in business, particularly about the good value of the product and novelty; they check European and American trends. [...]
[...] IKEA may provide patents for products, a manufacturing know-how, technical and marketing advice and assistance, and the right to use the trademark to the licensee. That's why, if IKEA does licensing with a Brazilian manufacturer, it must fit and control the licensee to protect the brand name and improve revenue. To succeed in licensing, IKEA should do it seriously with methods to respect the brand image and concept, so the licensee should accept IKEA's demands. Then the licensee should be able to provide assistance and availability of replacement parts, which is an important factor in the customer's purchasing decision. [...]
[...] US exports of furniture to Brazil reached $43 million in 2000 (so 39% of total Brazilian furniture imports) and are expected to decrease to $36 million in 2001. The US is the first foreign provider with its 39% of the imported furniture market, followed by Germany with Italy with and other countries with 15%. Brazil exports more furniture and articles of decoration than it imports them. The credit balance of the balance of trade increased these last four years to reach 883 million US$ in 2005, against 380 million US$ in 2001. [...]
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