Exporting Mountain Bike in Brazil

Executive Summary

Brazil allows vast geographical areas with mountain trails. Brazilians express their interest towards outdoor activities specially cycling. Due to lack of knowledge, some Brazilians of smaller cities don’t know about benefits of bicycling. Because of that some Brazilians are facing some health problems. Cycling is cost efficient as well as non-polluting, the environment, so it is the best preferable mode of transport for all class of people. Devinci Company started their bicycle business in Brazil at that time what they face issues and how to overcome that problems which includes in that report.

Introduction

A mountain bike is a simple yet elegant machine that provides one of the best ways to enjoy the backcountry of the Rockies, with the fresh air and a close to nature feel, mountain biking offers a unique experience second to none. In 1996 the World Bank declared that bicycles, like other non-motorized modes of transport, would bring economic, social and environmental benefits to the city, and should not be demoted (World Bank, 1996). Fishman states that the use of bicycles has been linked to positive values such as social equity and an environmentally friendly and healthy mode of transport helping cities to promote themselves as leading players in a low-carbon-emissions society of the future (2013). Every year there are more cycle lanes and some cities are now quite cyclist friendly. There are now quite a few “Boris bike” systems where you can pick up a bike, ride to your destination and drop it off for a very small charge.

Problem Identification

The main problem to sell a Devinci mountain bike in Brazil is absence of benefit of bicycle as well brand awareness in smaller cities such as Ubatuba, Lorena, Rio Branco, Montes Claros, Aracaju, and Praia Grande. In this cities bicycle remains an initial form of transport.

The other problem with is costly.

Analysis

Product Analysis

Product Description

Devinci’s Atlas is a 110mm travel trail bike with a Dave Weagle designed Split Pivot rear suspension. The Atlas combines incredibly short chain stays with one of the best rear suspensions we’ve ridden to create a supremely capable trail bike. While 11omm may seem short by today’s all-mountain standards, it feels like much more, and it’s all placed on a bike with tight, whippable handling that’s just plain fun to ride. The Atlas comes with a 12×142 thru axle using their own axle that bolts into place. There’s only a 1.5cm difference in wheelbase between L and XL, and a 2cm difference in ETT between each frame size. The 29-inch wheel platform on both the Aluminum and Carbon chassis is a tire-to ground formula that holds momentum longer, while delivering a sasquatch-sized footprint for improved stability and grip across mud, root, and rock ravaged environments. Overall, the Atlas is a phenomenal mountain bike. It’s fast and efficient enough and could certainly be built light enough to be a racer. (Irimia R, Gottschling M, 2016)

Product position in the Canadian market

Devinci has maintained their top position in Canadian market by providing quality product and innovative designs. While there are mountain biking trails in all provinces, British Columbia, Alberta, Quebec and Ontario have the most trails and operators.

This research does tend to focus on recreational cycling as opposed to cycling as a means of transportation. Cheap overseas manufacturers stole the low-end market and changed the high-end market by bringing down the prices of more exclusive parts and models. Devinci has mainly focus to their customers demand and market demand, according to they make their upcoming model and compete to their competitors.

Gauthier says "You can't underestimate anything and dependably should be prepared for the unforeseen. Our dedication toward quality control and consistent advancement is constant."(Company, 2016)

SWOT Analysis of the Product

Strength:

• Biking is simple, it’s good for exercises, which people of all ages can enjoy.
• Cycling builds muscle.
• It helps to maintain ecofriendly environments.
• Low cost and commitment.
• Sells a wide combination of bicycle additional items and parts.

Weaknesses: -

• Prices are relatively high.
• It runs according to season wise.
• Lack of brand awareness.

Opportunities: -

• Increasing trend of active lifestyle.
• Area is experiencing population growth.
• Sales bike by online marketing and expand business world widely.

Threats: -

• Online bicycle sales as well as catalogue sales and service.
• Price pressure from mass merchants and large discount chains.

External Environmental Analysis

PESTEL Analysis of Brazil

Economical Landscape

Financial system

More than 25 years of democracy and political stability have allowed Brazil to make major strides in economic development, including cutting its official poverty rate by half. Brazil is 7th among world’s largest economies by GDP. Brazil has 7th in global FDI (Foreign Direct Investment) inflows and 30th in outflows. The Central Bank of Brazil controls foreign trade operations, executes foreign exchange operations on behalf of the National Treasury and other public authorities, and implements rules set forth by the Bank of Agriculture, Industrial, and Commercial Credit. In addition, the bank also receives voluntary deposits and reserves requirements from other commercial banks operating in the country.

Imports and Exports

Raw ingredients and intermediate goods (45% of total exports), capital goods (22%), consumption durables (10%), oil (6%) and motor vehicles (4%) are the Brazilian main import products. The main imports partners are: China, United States, Argentina, Netherlands, Japan, Germany and India. The chart shows that data of Brazil import and export by year. In 2011, Brazil spent $307.95 billion for imports goods and services and export only $291.37 billion. Brazil invested goods and services from other countries almost same $331 and $325 billion in 2013 and 2014 respectively. Overall, chart indicates that Brazil spent more money in import rather than export during 2011 to 2016.

Brazil has a mixed economy with ample natural resources. Major export products include aircraft, electrical equipment, automobiles, ethanol, textiles, footwear, iron ore, steel, coffee, orange juice, soybeans and corned beef. The country has been expanding its presence in international financial and commodities markets, and is part of the group of four emerging economies named BRIC.

Banking sector

Bank of Brazil is the second biggest bank by resources in Brazil and all Latin America. The bank, headquarter in Brasília, was established in 1808 and is the most established dynamic bank in Brazil, even more established than the nation's national bank. It is additionally one of the most established banks in constant activity on the planet.

Competitor analysis

CALOI: -

It is the most reputed Brazilian manufacturer bicycle company in Brazil and it’s maintain their top position in market more than 45 years. Also, its provides bicycles equipment.

Recommendations

Bicycle training and advancement programs are an essential part of a bike friendly city. The Devinci Company arrange special marketing campaigns in smaller cities of Brazil like Ubatuba, Lorena, Rio Branco, Montes Claros, Aracaju and many more and awake about the benefits of bicycling. The company have to arrange cycling race competition and motivate to citizens of Brazil, so they keep touch with it. Price reduction of product is the best way to company manufacture their product in the target country because of that they pay fewer taxes and tariffs.

Conclusions

The historical lack of national policies for promoting the use of the bicycle in Brazil has become a barrier to increasing bicycle modal share. The bicycle has bunches of advantages to maintain air pollution, noise pollution. The bike has the benefits of being Healthy, efficient, and eco- friendly. The average temperature of Brazil is around 22 degrees, so people can ride an anytime easily. So, it’s a great country to export mountain bikes. Main reason to export mountain bike in Brazil is that less competition in Brazilian market.