Country Report: Brazil For The Coffee Chain Franching Initiative

Essay by ikki_nUniversity, Bachelor'sA, May 2009

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INTRODUCTIONBrazil, officially the Federative Republic of Brazil, is the largest country in South America by both geographical area and population. It is in fact the fifth most populous country in the world with an estimated population of 190,179,663 (The Brazilian Institute of Geography and Statistics). Brazil possesses countless natural wealth and tourist attractions that draw the attention of numerous tourists from all over the world each year. This report analyses the opportunities and risks of franchising our local coffee chain in this tropical country. The exploration in this report is divided into four dimensions, namely political, legal, economic and social dimensions. Following this, a sound recommendation based on our analysis is presented for management's consideration.

POLITICAL DIMENSIONMorrison (2006, p.235) states that for every society, its political dynamics is affected by both internal structure and external forces.

Internal Political StructureBrazil is a federative republic with a presidential election system. It is ranked 41st out of 167 countries by the Economist Intelligence Unit in its 2008 democracy index.

Among other 52 countries, it is categorised as a "flawed democracy" (EIU, 2008, p.8). Democracy is defined in Morrison (2006, pp.247-249) as rule by people, through elected government. Macpherson (1973, p.51) further provides that democracy is a term which refers to a whole complex of relations between individuals within a society rather than a government system. The Brazilian democracy is considered flawed due to a lack of checks and balances, corruption, low political participation, and a weak political culture according to the EIU rankings.

Brazil's current president is Luiz Inácio Lula da Silva, elected in 2002 and renewed in 2006. He has gained high popularity since his first term of office. He continued the orthodox macroeconomic policies put in place by his predecessor, the Cardoso government, and later pushed through a number of...