Introduction:
'Brazil is rich: rich in natural resources, rich in fertile soil, and rich in people". Although the country still shows deficits in different areas, the Brazilian market has attracted large investors and companies especially in the past decade. The country's potential has been the focus of many analysts and researchers by renowned economic institutes. After years of high inflation and slow growth - especially in the eighties and early nineties - Brazil was able to recover and get back into game with the other global players.
From a historic perspective it is to say that the country has gone through large transition periods in the last century. Emerging from being a major coffee exporter until the early 20th century, Brazil now belongs to one of the most industrialized countries in Latin America. Although it is the largest country in the region in terms of population figures and geographical size, its GDP share in Latin America or annual growth rate offer a different conclusion. Nevertheless, the consulting market in Brazil has been growing, in particular during the last ten years. Many European and North American consulting companies have invested into the country, built branch offices and bought local firms. Although the market is still very young, its future potential has clearly been discovered.
When thinking of Brazil, the words that tend to enter people's minds are positive sounding ones such as Samba, Carneval and beautiful beaches which radiate joy and energy. On the other side issues like criminality, poverty and high social inequality are often associated with Brazil as well. Either way, it is almost certain that one will have heard of Brazil. The country manifested itself in the mind of people and has made front page news more than once.
Objective, relevance and research questions:
The objective of the thesis is neither to conduct a market evaluation nor to point out the importance and future relevance of Brazil in the world economy. In fact this work is an empirical study on a market entry strategy which can serve as a reference for management consulting companies that want to enter the Brazilian consulting market. Furthermore, the work attempts to deliver a comprehensive picture of this market, with the intention of elaborating on whether it is wise to invest in Brazil, or whether there may be another - more suitable - Latin American country. Yet, the focus lies on the framework for strategy formulation and the proposals that will be made thereupon. In order to accomplish this, both a classical and an empirical approach were chosen whose outcomes will be compared to one another in the last chapter.
LEAN Management is a booming term in the consulting business. Everybody wants to learn the 'LEAN-Thinking" and apply the method to his/her own company. Since the late 1990s LEAN Management is experiencing an upward trend and the word has spread all over the globe to reach Brazil. Consequently, there is a growing demand for LEAN in this country, as evidenced by the number of consulting companies already present in the market and the excellent prospects it shows.
The aim of the thesis is to propose which geographical regions and economic sectors in Brazil may yield attractive prospects for management consulting companies. The information is then used to formulate a market entry strategy for LEAN Consulting in the Brazilian market. In addition, proposals will be made and future scenarios presented to the reader which are augmented by emprircal findings.
Based on the introduction and the objective of the topic - giving a perspective of the situation in Brazil - the following two research questions are being raised.
Is the LEAN market in Brazil a suitable market for a LEAN consulting company to invest in?
Which recommendations for an entry strategy can be given when entering the Brazilian LEAN market?
Out of these research questions, a sub-question is derived.
Can Brazil serve as an entry port to Latin America for LEAN consulting businesses?
The analysis of these questions will be conducted through a theoretical as well as an empirical approach.
Structure of the topic:
After having presented the objective and relevance of the topic as well as the research questions, the author will introduce the structure of the thesis. Accordingly, to strengthen the arguments that will be highlighted in the conclusion, the thesis is divided into three parts.
The first part consists of theoretical results selected from secondary research. Based on the theory, an empirical study is conducted, involving a group of experts who will elaborate on their personal experiences and opinions with regards to the topic. The empirical findings deduced from the study are compared with the theoretical results in order to verify, if there exist a consensus among theory and empiricism. This comparison is then used to build up the third part of the thesis - the conclusion.
Methodology:
In order to create a solid basis for the strategy formulation chapters two and three provide a brief overview of the economic situation in Brazil - in a Latin American context - from the earliest settlement in the 14th century until today. Furthermore, an evaluation of the market, its productivity and its growth potential, completes the picture. Recent political changes have brought an upwind into the descending system. Since the implementation of the Real Plan in 1994 the country has experienced low inflation, trade liberalization, substantial privatization, increases in import penetration and the expansion of FDI. Thus, Brazil has reason to hope for future in prosperity. The information drawn for this section consists of secondary research, covering literature as well as various online resources and online libraries, to provide an adequate framework. The literature is primarily in English and partly in German or Portuguese language.
The term LEAN Consulting is explained in detail in chapter four, in order to understand the impact and relevance of the term in this context. The literature for this part is provided by a consulting company that is working according to the LEAN principles. It consists entirely of secondary research with books and magazines as main sources. The LEAN Consulting market in Brazil has a special importance for the topic and the sources are given by the same consulting company.
After having applied the theoretical framework of the thesis, chapter five provides the framework for the strategy formulation. The basis to this approach is the Five-Forces-Model by Michael E. Porter.
Since the topic - market entry strategy - is a rather practical issue, the main part consists of empirical findings deducted from a Delphi Study. It is based on expert interviews that were held with a group of initially nine experts from the consulting business in two stages. In the first stage, these experts were confronted with two questionnaires - consisting of open and closed questions - which they had to answer based on their personal experience and opinion. The questionnaire in the second round was based on the summarized answers of the first one, raising new thoughts to the topic.
The questionnaires were submitted in German, since all of the participants were either native German speakers or had sufficient knowledge of the German language to understand the questions. The aim of this Delphi Study was to gain opinions and experiences that can neither be found in books nor in any other relevant literature. Usually, Delphi Studies are used for business forecasting. The author receives new viewpoints that are based on personal experience of the experts by living in Brazil and working in the consulting business during the last decades.
The last part of the thesis draws the conclusion, comparing the classical market entry approach to the empirical findings of the Delphi Study. This then gives a profound basis for constructing strategic recommendations and provides a future outlook. It is interesting to see how the experts of the Delphi Study view the future prospect of the consulting business in the country and what should be done to boost economic growth in this area. The thesis concludes by summarizing all important findings under consideration of the background layed out in the first part of the thesis.
