Like an entrepreneur half the battle in Brazil was too survive in the short run. As the mullet has often been described ‘business on top and ‘party at the back’, this was very much the motto on the Brazil trip, as all the students tried to experience both the business culture and the social culture. The country was infinitely wealthier than I had presupposed and the level of wealth in Sao Paolo was quite astonishing at times as we passed by a whole street of car shops selling Lamborghinis, Porsches etc. Even Ireland in it’s hey day never saw such levels. However, this is juxtaposed with poverty showing the sharp contrast between the haves and have not’s which is not apparent in Europe. However, it was interesting how business opportunities can exist in both arenas and the interesting lecture we had in how to incorporate poorer communities with large scale businesses in an inclusive style of entrepreneurial businesses.
The opportunities initially appear endless as it rushes headlong forward in growth, the group spends the week between beers (which is rare) attempting to comprehend whether it is purely a commodity boom or a more sophisticated economic development. No one really had the answer, yes it is a commodity boom but at the same time its hard to understand until you are there that Brazil is nearly a continent in itself. What are the chances for Irish business in such an environment? I spoke with a friend who is doing business in Brazil; and while opportunities exist it is not the easy win that people might think. Very few speak English, regulation is extremely confusing, long term financing is difficult to find, local trading partners are required as well as many other barriers? This brings us back to our first point whether an incumbent business can it survive in the short to medium term without cash flow. Many of our fellow students did not financially survive to see a second week in Brazil while some of those who stayed on could be paying back for a considerable time. There might be a lesson in there somewhere.
Last week, a group of MBA students went on an epic trip to Brazil, as part of our International Study Programme. It started in Sao Paulo with visits to Walmart and Natura, amongst others. Then we all headed to Rio de Janeiro, hoping to catch some sun and fun! The days passed so quickly; we had so much to see, so much to do! The one day, which really made the trip, was Friday, 18 March 2011. After a very impressive session with Deloitte, we all got on the bus to go to Vigário Geral favela (slum).
Eve, our guide for this part of the trip briefed us about the place we were going to visit. It was a slum area, known to be a very violent place and a hub for drug dealing. In the past, there have been horrifying instances of gang wars and young children becoming a part of the circuit. With all that at the back of our heads, (and instructions not to click pictures without permission!) we reached the favela.
There we were greeted by a hundred kisses from a woman, who owns a restaurant based in the middle of the favela, cooks all the food herself, is more than 50 year old and still has a dummy pacifier in her mouth, most of the times! The food was delicious! The variety was commendable. Good food and warm hugs from the lady herself made us happy, but none of us knew what to expect ahead!
We were back from Brazil three days ago but I still feel the strong energy of that country. Before getting on the Smurfit MBA International Study Trip, I always thought of Brazil as a home of football and samba with many beautiful beaches and one of the key emerging markets. However, there is actually much more than those in Brazil. If I have to tell everything I have learned from this trip, it would be a lengthy report or say a learning journal which I need to write later on as a part of the course. Nevertheless, there were three things that impressed me most in terms of comparison between my home country, Vietnam which is also an emerging country, and Brazil.
Vietnam mainly relies on agricultural exports and Brazil is our main competitor in many areas, especially the coffee market where we are only second to Brazil. Therefore, my initial perception of Brazil was more of an agriculture-based country rather than a service-based one. And then I was impressed by knowing Brazil’s services now accounts for 66% of the economy while agriculture contributes only 20%. Moreover, most of their population (193 million, the fifth largest in the world) is now living in urbanised areas. For instance, Sao Paulo, our first destination in Brazil, is a huge modern city with 20 million inhabitants.
In addition, I had an expectation before the trip that Brazilian would have many characteristics in common with the Western people as Brazil used to be the Portugal’s colony for over 300 years. However after the trip, it turned out not to be true. In fact, Brazilians are group-orientated and collective. They collaborate in group and compete as a group. These characteristics are very close to Vietnamese ones.
More interestingly, I got a chance to go to an open market in Sao Paulo. It was just a small normal area with many small shops selling foods, stuff and the like. When I worked around, I saw that most of the shops accepted payments by credit cards even if they sold 4-5 Real stuff (approximately €2). I found out later on from the tour guide that almost everywhere in Sao Paulo they do the same. I was very surprised at that time as the number of electronic payment in Ho Chi Minh City, the Vietnam’s largest city, is still very small as compared to the cash payment. This has been a challenge in Vietnam hence seeing how Brazil overcame it really impressed me.
As my colleague said in her blog post, we have just come back from this year’s MBA International Study Trips.
Each year, the Smurfit MBAs choose one of two destinations for the trip which in turn forms part of a module on Doing Business In Emerging Markets. This year, the Smurift MBAs chose to go to China and Brazil.
The Brazil group visited Sao Paulo and Rio de Janeiro in 8 hectic days. Similarly to the China trip, the trip was a mix of educational, business, socal and cultural visits and meetings – but I guess we had the better weather in Brazil!
We first went to FIA Business School for two very interesting lectures on Brazilian economy and culture. Following that we visited the Brazilian stock exchange BM&FBovespa, retailer Walmart Brazil, Natura cosmetics manufacturer, BNDES (development bank), Petrobras the Brazilian oil giant, and Deloitte Brazil. We also met with a number of Irish businesses and business people in Brazil as well as Enterprise Ireland’s Brazil Office.
The social aspect of the trip was a visit to impressive social enterprise organisation Afro Reggae, who work to keep youths living in the slums of Rio out of trouble through music and education.
Last Friday, we finished the last of our International Study Project classes with a tour itinerary presentation. Thanks to the presentation, we’re all now so excited to experience the much warmer weather on the Rio beaches.
Of course we had other important issues covered in that session, such as the importance of being on time and attending all scheduled meetings with the top management of various companies and also about using the opportunity to talk to the MBA students from a top Business school in Brazil. Well, all said and done, it’s a whole new country, with a whole new perspective. There will be a lot to learn from this country that’s developing at a pace like no other. This trip is going to be extremely eventful for the 43 of us going to Brazil in terms of meetings, learning and fun! Just can’t describe in words how much I’m looking forward to this trip and I am sure you will hear much more about it over the next few weeks !