Case Study Description of Lessons Learned from Brazilian Multinationals' Internationalization Strategies
Internationalization of emerging market multinationals is a recent phenomenon gaining importance in the global economy. This foreign expansion of a new breed of companies has challenged established theories and practices in the field of international business (Cuervo-Cazurra, 2007). This article addresses the issue of whether or not there is something to learn from these emerging market companies and their foreign expansion. Focusing on the international trajectories of four Brazilian multinationals (i.e., Odebrecht, Embraer, Stefanini, and Marcopolo), this study analyzes their strategies and managerial processes during and after the recent economic crisis with regards to internationalization. Our qualitative fieldwork suggests that the trajectories of these Brazilian multinationals are quite unstructured and evolve as a reaction to the opportunities they face in international markets. It seems all four companies in our sample shared a strong entrepreneurial spirit and a high motivation to expand their international operations despite the crisis and the obstacles they faced. Our findings and suggestions in terms of lessons learned should provide valuable implications for multinational managers from other emerging markets by providing a better understanding of how Brazilian multinationals expand internationally, deal with economic crisis, and manage relationships with local and foreign institutions.
Authors :: Ronaldo C. Parente, Alvaro Bruno Cyrino, Nicole Spohr, Flavio Carvalho de Vasconcelos
Swot Analysis of "Lessons Learned from Brazilian Multinationals' Internationalization Strategies" written by Ronaldo C. Parente, Alvaro Bruno Cyrino, Nicole Spohr, Flavio Carvalho de Vasconcelos includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Multinationals Brazilian facing as an external strategic factors. Some of the topics covered in Lessons Learned from Brazilian Multinationals' Internationalization Strategies case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Lessons Learned from Brazilian Multinationals' Internationalization Strategies casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc
Introduction to SWOT Analysis of Lessons Learned from Brazilian Multinationals' Internationalization Strategies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lessons Learned from Brazilian Multinationals' Internationalization Strategies case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Multinationals Brazilian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Multinationals Brazilian operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Lessons Learned from Brazilian Multinationals' Internationalization Strategies can be done for the following purposes –
1. Strategic planning using facts provided in Lessons Learned from Brazilian Multinationals' Internationalization Strategies case study
2. Improving business portfolio management of Multinationals Brazilian
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Multinationals Brazilian
Strengths Lessons Learned from Brazilian Multinationals' Internationalization Strategies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Multinationals Brazilian in Lessons Learned from Brazilian Multinationals' Internationalization Strategies Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Lessons Learned from Brazilian Multinationals' Internationalization Strategies Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Multinationals Brazilian has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Multinationals Brazilian to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Multinationals Brazilian is present in almost all the verticals within the industry. This has provided firm in Lessons Learned from Brazilian Multinationals' Internationalization Strategies case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Multinationals Brazilian has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Multinationals Brazilian has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Lessons Learned from Brazilian Multinationals' Internationalization Strategies HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Multinationals Brazilian is one of the leading recruiters in the industry. Managers in the Lessons Learned from Brazilian Multinationals' Internationalization Strategies are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Multinationals Brazilian
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Multinationals Brazilian does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Multinationals Brazilian has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Lessons Learned from Brazilian Multinationals' Internationalization Strategies Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– Lessons Learned from Brazilian Multinationals' Internationalization Strategies firm has clearly differentiated products in the market place. This has enabled Multinationals Brazilian to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Multinationals Brazilian to invest into research and development (R&D) and innovation.
Analytics focus
– Multinationals Brazilian is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ronaldo C. Parente, Alvaro Bruno Cyrino, Nicole Spohr, Flavio Carvalho de Vasconcelos can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Multinationals Brazilian has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Multinationals Brazilian has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Multinationals Brazilian is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Lessons Learned from Brazilian Multinationals' Internationalization Strategies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lessons Learned from Brazilian Multinationals' Internationalization Strategies are -
High bargaining power of channel partners
– Because of the regulatory requirements, Ronaldo C. Parente, Alvaro Bruno Cyrino, Nicole Spohr, Flavio Carvalho de Vasconcelos suggests that, Multinationals Brazilian is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Lessons Learned from Brazilian Multinationals' Internationalization Strategies can leverage the sales team experience to cultivate customer relationships as Multinationals Brazilian is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Multinationals Brazilian, firm in the HBR case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Multinationals Brazilian needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Lessons Learned from Brazilian Multinationals' Internationalization Strategies HBR case study mentions - Multinationals Brazilian takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Multinationals Brazilian is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Multinationals Brazilian needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Multinationals Brazilian to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Lessons Learned from Brazilian Multinationals' Internationalization Strategies HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Multinationals Brazilian has relatively successful track record of launching new products.
Lack of clear differentiation of Multinationals Brazilian products
– To increase the profitability and margins on the products, Multinationals Brazilian needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies, it seems that the employees of Multinationals Brazilian don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High cash cycle compare to competitors
Multinationals Brazilian has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Multinationals Brazilian has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Lessons Learned from Brazilian Multinationals' Internationalization Strategies | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Multinationals Brazilian in the consumer business. Now Multinationals Brazilian can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Multinationals Brazilian can use these opportunities to build new business models that can help the communities that Multinationals Brazilian operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Developing new processes and practices
– Multinationals Brazilian can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Multinationals Brazilian to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Multinationals Brazilian to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Multinationals Brazilian has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Multinationals Brazilian to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Multinationals Brazilian can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Multinationals Brazilian can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Loyalty marketing
– Multinationals Brazilian has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Multinationals Brazilian can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Multinationals Brazilian is facing challenges because of the dominance of functional experts in the organization. Lessons Learned from Brazilian Multinationals' Internationalization Strategies case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Multinationals Brazilian can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Lessons Learned from Brazilian Multinationals' Internationalization Strategies, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Multinationals Brazilian can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Multinationals Brazilian to increase its market reach. Multinationals Brazilian will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Lessons Learned from Brazilian Multinationals' Internationalization Strategies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies are -
Regulatory challenges
– Multinationals Brazilian needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Multinationals Brazilian has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Multinationals Brazilian needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Multinationals Brazilian in the Leadership & Managing People sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Multinationals Brazilian is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Multinationals Brazilian needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Multinationals Brazilian
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Multinationals Brazilian.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Multinationals Brazilian can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Multinationals Brazilian in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Multinationals Brazilian will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Multinationals Brazilian needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Multinationals Brazilian can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Stagnating economy with rate increase
– Multinationals Brazilian can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Lessons Learned from Brazilian Multinationals' Internationalization Strategies Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Lessons Learned from Brazilian Multinationals' Internationalization Strategies is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Lessons Learned from Brazilian Multinationals' Internationalization Strategies is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Multinationals Brazilian needs to make to build a sustainable competitive advantage.
