Brazil has many economic strengths but the industry that stands out above the rest is construction, whether it be as a result of cultural opportunities, industrial advantage, or industry awareness by applying Porter’s diamond Brazier’s success in the construction industry will become clearer. Factor endowments Basic and advanced factors make up the competitive advantage for an Industry. At the basic level, factors such as natural resources, demographics and location are the key indicators and advanced factors indicate the most powerful competitive advantage at the business investment and government level (Hill, 2010).
Brazier’s basic factors include natural resources like oil, natural gas and the capabilities to produce hydro-electric power which make it a very self-sufficient country that has the resources to be competitive (ETC, March 2012). Brazier’s advanced factors Include many business opportunities and government support, such as the opportunity to host the 2014 World Cup which will involve major construction projects that will boost the economy and Brazier’s governments guarantee to continue to invest in the entries energy sector with a pledge of eighty billion dollars to be dedicated until 2017 (ETC, March 2012).
There are also plans for continued road work. Railways and airport construction that will affect both basic and advanced factors for growth. Demand Conditions Home demand promotes competitive advantage by encouraging Innovation and quality because companies are most likely to be sensitive to the needs of their closest customers. The home demand for construction in Brazil is great, because all the previously mentioned construction projects are under constant development with Lana for future growth at a local level and are providing a boost for the local economy and Job market.
An example of local demand that will continue to generate economic growth for Brazil Is the expansion of the ports system In Brazil; It Is a local demand for construction projects and it encourages continued private investment (ETC, March 2012). Related and Supporting Industries The construction industry Involves many different business types and Is usually of related industries are typically found (Hill, 2010).
Industries that are also dominant in Brazil are the Green Energy industry which plans to expand on bio-full, wind, natural gas, and solar power in the near future to increase sustainable energy which will affect the construction industry in a significant and positive way, this is an example of a supporting industry (ETC, March 2012). Examples of related industries are the ports and exports projects which support the construction industry but aiding in exporting and importing all construction materials and transportation of accessory skilled labor, this is also a constant expansion project relating to construction (ETC, March 2012).
Firm Strategy, Structure and Rivalry The construction industry is highly competitive and has many players, from engineers, power plants, to heavy construction companies, for this reason in order for success a firm strategy and structure are necessary. The competition has certainly made it clear who the major players are in Brazil and for major projects that affect the economy the larger investors are key, Brazil has also accepted international investment for projects such as the World Cup stadium enhancement (ETC, March 2012).
Projects like the World Cup and ROI Olympics are projected to bring in not Just high volumes of international visitors but high international investments as well. Brazier’s strategy is to continue to grow its economy through construction of tourist friendly destinations and to continue to build the economy through major infrastructure projects that will not only preserve resources but will provide Jobs (ETC, March 2012). Competition and Rivalry in the construction industry is affected y many factors, one example is the Brazilian equipment markets success which directly affected the construction industry and caused increased competition.
Brazil has an established base of industries in the construction field which has made investment in construction equipment factories very popular; this has caused competition from Chinese manufactures who have started installing plants in Brazil which affects the cost of construction equipment with new competition (M&T, 2012). Despite competition Brazier’s strategy has been to stay competitive by basing their instruction projects on ports, stadiums , roads, and hotels which will ultimately boost their economy and create Jobs, they have been able to count on local support and foreign investment with this strategy.