Apr 182014
Professor Paulo Prochno addresses a group of students about the challenges to doing business in Brazil

Professor Paulo Prochno addresses a group of students about the challenges to doing business in Brazil

Paulo Prochno paces in front of the lecture hall.  He freely admits that he can’t keep still when he’s giving a talk – particularly when he’s speaking about a subject that he’s passionate about like his home country Brazil.  It’s Friday, and it’s been an exhausting week, but Prochno’s energy is infectious and he’s got my attention.  He’s speaking to a group of students over lunch about the Brazilian market – challenges, and opportunities.  “Mainly challenges, but I’ve put some opportunities in at the end so you don’t go away depressed,” he says.  It’s part of a series on the barriers to doing business in the emerging markets – a subject I’m keenly interested in – held at the Smith School by the Office of Global Initiatives.

This is a typical end to the week at b-school.  As an MBA, amidst the case study analysis and the model building, you get to work with great faculty who are not only experts in their field, but accessible.  They’ve chosen a community-driven business school in Smith because they enjoy the engagement with students.  As the department of Management and Organization’s Prochno takes us through a whirlwind, 40 minute introduction to the Brazilian market (there will time for questions too, of course) he cites his colleagues and friends’ work, and you know you’re getting the kind of insights for which numerous companies looking at accessing the Brazilian market pay him a pretty penny.

Brazil has strong domestic companies such as Petrobas and JBS, and owns major MNCs like Anheuser Busch Inbev, Burger King and Heinz.  Its growth in GDP is fueled by the consumption of its growing middle class, Prochno explained, but the sticking point for some time has been the volatility of its interest rates.  The root cause is a problem with supply – a particular kink in the growth model which drives up the cost of labor, and puts pressure on interest rates when talent and other resources are scarce.  So what is the solution?  Lack of infrastructure, need for tax reform, and efficiencies are all possibilities.  If companies can withstand the volatility, there are significant opportunities in infrastructure building, growth in credit, process efficiency, and consumer products.  That is, if they can also navigate the cultural nuances of doing business in Brazil – including the importance of personal relationships, formality, and the famous Brazilian “flexibility”.

All in all, it was a fascinating talk.  I’m continually impressed by the expertise that we have in all corners of Van Munching Hall – whether it be professors that I have for core and elective classes, or professors whom I’m lucky to catch for the odd Friday presentation.  Professor Prochno is teaching Global Strategy next year, so I’m looking forward to taking his class.

UPDATE 4/30/14:  Paulo Prochno’s talk is now available on Youtube.  Check it out below!

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