1. Is Brazil the right market for JET expansion?

Brazil is potentially an attractive market for JET expansion. Brazil is the largest country in
Latin America in terms of population and GDP, and its economy has been consistently
growing. It has attracted both local and foreign investments in various industries,
including aircraft, automotive, computers, consumer durables, petrochemicals, steel,
agribusiness, and energy. The country's upcoming events, such as the World Cup and the
Olympic Games, are expected to further drive economic growth.

2. Can Brazil generate the $3 million per year required to meet the annual revenue goal for
international business development growth over the next five years?

I think Brazil can generate $3 million per year. It has a large market size ($91MM) and
consistently growing economy (7th largest in the world). It is predicted to continue to
grow over the next several years (World Cup 2014 and Olympics 2016). If WMMA
acquired/joint venture with a local manufacturer, they would have the knowledge and
support of a local partner, which would help WMMA navigate the cultural differences
and gain distribution expertise. In Brazil, import related costs are generally high because
of import duties and taxes, thus setting up production facility, even though it would
increase cost of operations, would help WMMA lower risks. Through this strategy, the
company could control container shipment problems, avoid distribution, and tariff costs
for locally produced products. It would solve the product differences problem with no
sourcing requirement from the US. Walter Meier is more successful in countries where
they have established warehouse facilities compared to countries that do not and rely
on full container shipments from US warehouses, which adds time and costs.

3. Have the best entry mode options been identified?

- Entry methods that WMMA was considering for their expansion into Brazil, included
exporting, licensing, franchising, and acquiring or forming an alliance with a local
manufacturer.

4. And which one will chart the best course to success?

- Walter Meier Manufacturing identified their best option to acquire or partner with a metal/
wood machinery manufacturer, which in turn would shift their international expansion strategy
from Asian exporting to local Brazilian production.

5. What will it take for JET to be successful in Brazil?

For JET to be successful in Brazil, they will need to carefully develop market research,
strategic planning, and effective execution of the entry mode of producing in Brazil through
acquisitions or partnerships.
 6. Which of the four entry-mode options is best for JET in Brazil? and Why?

WMMA should acquire/joint venture with a local manufacturer. Although, each option
has its own advantages and disadvantages, the best option would depend on various factors
such as market conditions, competition, regulatory environment, and available resources. It is
likely that WMMA conducted further research and analysis to determine the most suitable
entry mode option for their expansion into Brazil.

7. How does this case relate to the topics we are reviewing this week (Comparative
Analysis of Management Practices across Nation-States, International Risk Assessment
and Management, Entry Strategies in Global Markets)?
• Comparative Analysis of Management Practices across Nation-States
o Cultural Differences
▪ Always been a relative outlier in Latin America
▪ Portuguese heritage and language
▪ Disparate climates and cultures within the territory itself
▪ Handle configuration (right vs left side)
▪ Accessory interfaces (Metric vs Imperial)

• International Risk Assessment and Management

o Risk assessment on entering Brazil
▪ Economic Risk in International Trade
▪ Political Risk
 ▪ Structural Assessment

Current country risk rating of

Brazil

• Entry Strategies in Global Markets

o Exporting
o Turnkey projects
o Licensing
o Franchising
o Joint Ventures
o Wholly Owned Subsidiaries