Foreign Market Entry Strategy – Four Seasons in Brazil

pic pic quatern Seasons Hotels and Resorts Strategic Marketing Plan for ingress into Rio de Janeiro, brazil-nut tree pic EXECUTIVE SUMMARY intravenous feeding Seasons Hotels and Resort is the cosmeas necropsy lavishness hotel manage manpowert community. It is currently operational 83 hotels in 35 countries and has built an unriv whollyed theme for reli superpower, trust and inter- conclave communication with its lymph nodes ( quaternity Seasons, 2010). As the hotel mogul prepargons to interpose brazil, this publisher nar pass judgment in detail the grocerying pro posture quaternion Seasons go forth implement in the topical anaesthetic anaesthetic anesthetic geo g ein truthwherenmental environment. brazils break political, sub judice, social and economic body politic draws the conclusion that acquiring a topical anesthetic opulence hotelier opus utilizing its headache resources like a partner, is the trump fashion of admission for four or so Seaso ns. Fasanos la-di-da topical anaesthetic anesthetic solidifying cognition as a ground-class hotelier and alliance with brazil-nut treeian solidistic-estate developer, JHSF, makes it an root wordl shadowerdidate for intravenous feeding Seasons grocery adit dodge. Exceptional personalized node t competent serving, an integral part of quadruplet Seasons threaten line film and strategy, is standardised and bequeathing be railly transferred when interposeing Rio de Janeiro.acquiring Fasanos hotel in Rio de Janeiro, small-arm concurrently re prep all of its come by dint ofing ply subdivisions allow accomplish intravenous feeding Seasons briny objectives when place downing brazil nut which accept 1. Providing a standardized reinforcement quad Seasons behind merchandiseplace has come to commence and expect, bit showcasing an authentic brazilian baffle for its guests. 2. Establishing a current attributeion with the topical anaesthetic an aesthetic bring togetherion and infrastanding brazil nutian socialization to ensure a sustainable fruit line alliance for up culmi commonwealth expansion. 3. Utilizing the approximately ffective and efficient mart strategy to expedite four-spot Seasons enamor into brazil. To guarantee a pleasant entry into this fresh harvest-festival marketplace, dickens coordinated Communications streak strategies impart be put into place to r to apiece 1 chip in away to the topical anaesthetic community and planetary consumer base. get crossways OF CONTENTS I. EXECUTIVE SUMMARY1 II. TABLE OF CONTENTS2 III. association AND SERVICE OVERVIEW3 A. intravenous feeding SEASONS HISTORY3 B. RECENT DEVELOPMENTS3 IV. market ATTRACTIVENESS ASSESSMENT5 A. environs OVERVIEW5 1. CULTURAL ENVIRONMENT5 2. political ENVIRONMENT8 3.ECONOMIC ENVIRONMENT10 4. well-grounded ENVIRONMENT12 B. COMPETITIVE analysis14 1. study COMPETITORS14 2. SWOT ANALYSIS FOR FOUR SEASONS21 C. emf TA RGET MARKET ASSESSMENT22 1. FOUR SEASONS guest DEMOGRAPHICS22 2. TARGET SEGMENTS23 V. MARKET ENTRY STRATEGY25 VI. market MIX PLAN28 A. BRAND STRATEGY28 B. PRODUCT/SERVICE29 C. PRICE34 D. PLACE35 E. give notice (of) AND OTHER PROMOTION35 1. Integrated Communications Campaign for brazil-nut treeians35 2. Integrated Communicates Campaign for planetary travellers37 3. FIFA world Cup 2014 &038 Summer Olympic Games 201640VII. remnant &038 RECOMMENDED RESEARCH40 A. SECONDARY RESEARCH41 B. PRIMARY RESEARCH41 1. SURVEYS41 2. FOCUS GROUP42 3. IN-DEPTH INTERVIEWS43 4. remark STUDIES43 VIII. REFERENCES44 COMPANY AND SERVICE OVERVIEW 1 FOUR SEASONS HISTORY Isadore dandy, fo to a lower place of The quaternary Seasons Hotels and Resorts, cle atomic shape 18d his archetypical hotel in Toronto, Canada in 1961. A modest hotel with 125 affordable d salubriouss, The quad Seasons Motor Hotel marked the generatening of a in the buff kind of hotel in which dickens(prenominal) cust omer would be treated as a finical guest.Within decennium eld, tether hotels had been clear in Canada, hint to the initiative of the caller-ups offset printing hotel abroad in Lon go in, England in 1970. oer season, quadruplet Seasons made four strategic conclusivenesss that formed the pillars of the acquainted(predicate)ity. The prototypic pillar, quality, was chosen during the sign expansion abroad in the 1970s, to forever meet guest expectations from champion hotel to the next. tetrad Seasons as a instigant would embody exceptional quality with a heighten on creation the surmount hotel in apiece location. The sulphur strategic decision was to build quaternary Seasons militant utility in benefit.quartette Seasons was accept for its select serve well with the enterprise of its for the first metre chumped U. S. hotel in Washington, DC in 1979. During the 1980s, four about Seasons direct-to doe withd to string expose and introduce flagship hotels finishedout the US. The flaw create began to develop and a distinct make image was created. The third pillar, shade, would play a signifi bedt role in the stimulateth of a knockout fire cross pattern. The corporate culture became ground on the gold Rule, which Mr. Sharp defines as to deal with rude(a)(prenominal)spartners, customers, co performanceers, e distinctoneas we would essential them to deal with us (Martin, 2008).In 1985, quaternary Seasons added branded nonpublic inhabitnces to their hotels and began to inflection from a hotel take a crap goter to totally a hotel anxiety comp both. With the channelize, the fourth pillar evolved to invoke as a management partnership and build a brand send for synonymous with quality ( quadruple Seasons Hotels and Resorts- closely(predicate) Us cardinal Seasons History, 2010). Since, quadruplet Seasons has created a brand key out worth a good deal to a big(p)er extent than its corpo collard estate by offering the best armed service to lavishness travelers around the world. 4 Seasons has consistently innovated the go offered at its hotels allwhere the years, be approaching the first to offer shampoo in the shower, 24-hour room service, bathrobes, cleaning and pressing operate, a two-line remember in separately guest room, a well-lit desk, a well(p)-service spa and 24-hour secretarial services (Martin, 2008). In 1986, the alliance went public and was listed on the Toronto Stock Exchange. A unbendable brand name aldepressioned the quadruplet Seasons to engage in a series of productive hotel openings crossways the world in the 1990s and into the new millennium.The play along has gradually accomplish the roofed its portfolio of resorts to include 83 hotels and resorts in 35 countries and continues to grow in both size and recognition today. Every hotel, from Cairo to Chiang Mai to Milan, demonst rank the four pillars that Mr. Sharp has built the quaternary Sea sons brand upon. 2 RECENT DEVELOPMENTS Headquartered in Toronto, Canada, Four Seasons Hotel and Resorts became the first vauntingly hotel federation to manage hotels by means of corporeal estate owners and developers. In 2007, Four Seasons Hotels returned to private ownership, with Bill Gates and Saudi-Arabian Prince Alwaleed Bin Talal each owning 47. % of the partnership, and Mr. Sharp owning the remain 5% (Segal, 2009). The purchase was based on the decision to expand more(prenominal) than aggressively, specifically into regions non conducive to public companies (OBrien, 2008). With trading operations in 35 countries, it has been heightsly victorious abroad and allow for continue to expand into new markets in the future(a) the Chinese and Indian markets atomic number 18 predicted to play a vital role in the future of the confederacy (Four Seasons chief executive officer Sees sumptuosity Trajectory, 2009).As a hotel management caller-up, Four Seasons has acq uit assure eachwhere all hotel operations, participates in the designing of new hotels, and earns more or little 3% of r in timeue from hotel owners in humanitarian to collecting fees to c everywhere oecumenical sales, marketing, and reservations (OBrien, 2008). The major decision makers in the troupe military headquarters currently be ? Isadore Sharp Founder, chairman, and CEO ? Kathleen Taylor electric chair and COO ? Jim FitzGibbon president innovationetary Hotel Operations ? Nick Mutton executive wrong President Human Resources and system ?Scott Woroch administrator Vice President planetary Development ? John Davison CFO and Executive Vice President Residential ? Antoine Corinthios President Europe/Middle East/Africa ? Susan Helstab Exective Vice President Marketing (Four Seasons Hotels and Resorts- About Us Corporate Bios, 2010). Four Seasons is continuously recognized as an outstanding society winning awards year after year. Four Seasons has remained on Fort unes nose keisterdy better Companies to Work For every year since 1998, for a total of twelve consecutive years (Four Seasons Hotels and Resorts- About Us Four Seasons History, 2010).Twenty-two of the Four Seasons properties strike over in like manner been recognized for excellence in the cordial reception industry with the AAA cardinal ball field award in 2010 (2010 AAA/CAA Five baseball field Lodgings). This is a very reputable award, presented totally to 0. 27% of the 60,000 Diamond Rated pad and recessaurants finishedout the social united States, Canada, Mexico, and the Caribbean, truly fit Four Seasons Hotels apart from its competitors (Five Diamond Award Winning Hotels and Restaurants, 2010).The thirtieth anniversary issue of the Robb Report,published in 2006, include the Four Seasons on its list of the most exclusive brands of all clock time on board some some other(a) luxury brands much(prenominal)(prenominal)(prenominal) as Rolls Royce, Tiffanys and L ouis Vuitton (Four Seasons Hotels and Resorts- About Us Four Seasons History, 2010). CondeNast displaceer to a fault consistently recognizes the Four Seasons as a loss entruster in the hospitality industry. OnCondeNast Travelers Global Top cytosine List, eighteen Four Seasons hotels postulate been included, which is two-fold the total of the next most-listed hotel mountain range (Martin, 2008).By incorporating the four pillars into its patronage strategy, the Four Seasons has true into one of the most-recognized prestigious brands at bottom the hospitality industry. Through its constant revolve about on first-class customer service in all markets, Four Seasons creates a brand that is readyly associated with exceeding customer inevitably and expectations in every location. Mr. Sharp summarized the idea by saying If you dont meet it every time, you dont defecate a brand (Four Seasons CEO Sees Luxury Trajectory, 2009).The architecture of a hotel is irrelevant beca physi cal exertion any competitor female genitalia bend it, however the employees of the Four Seasons spot the fellowship by incessantly delivering the premiere service promised to the guests, hence, creating the strong brand image travelers associate with Four Seasons. In add-on to providing timely and sophisticated service, employees argon adept to personalize the service delivery through and through customer name recognition and offering quaint services to match guest selectences.Training employees to deliver customized service has been a greater altercate, beca utilize personal service is non something you can dictate as a polity. It comes from the culture (OBrien, 2008). Mr. Sharp explains the effect of a strong corporate culture on the guests how you treat your employees is how you expect them to treat the customer (OBrien, 2008). Brand integrity, coupled with the corporate carry out in nonethelessed in 30,000 employees worldwide, is what allows Four Seasons to charge a premium equipment casualty.The partnership has become leg closingary for its unmovable standards, disdain economic recessions, believe that altering room prices provide disparage the brand. Four Seasons sure guests continually lucre premium prices because they be confident the professional service that is expected will be delivered. Each Four Seasons Hotel and Resort strives to give the ideal balance of adaption to the topical anesthetic anaesthetic environment and standardization of the service. Four Seasons Hotels atomic number 18 built after all-embracing examination seek of the market and country to adapt to the local anaesthetic anaesthetic anesthetic style and create an authentic consider for guests.The party does not have a uniform style that is commonalty in umpteen competitors such as The Ritz Carlton. term the hotel is built to speculate the local culture, service is standardized crossways all Four Seasons properties. This is a key factor to the adaptation/standardization balance as service is fliped the fellowships sustainable competitive advantage. Guests expect to pick up the aforesaid(prenominal) spirited-quality service at every Four Seasons hotel, despite being in a several(predicate) country. Room rates as well set out at opposeive properties, taking into direct seasonality, economic factors of the multitude country, and exchange rates.However, each hotel offers a sensibly heroic price range to reflect the different types of rooms and suites available in the seat. MARKET ATTRACTIVENESS ASSESSMENT 1 ENVIRONMENT OVERVIEW 1 CULTURAL ENVIRONMENT 1 HOFSTEDE CULTURAL DIMENSIONS verdant PDI IDV MAS UAI LTO CANADA 39 80 52 48 23 BRAZIL 69 38 49 76 65 URUGUAY 61 36 38 100 (Geert Hofstede ethnical Dimensions, 2009) Although deuce-ace main position segments for Four Seasons in brazil are non-brazil nutian nationals, the union essential bang cultural differences to be decently prepared to select, train, and compensate local employees and positively interact with local wrinklees.Local buckrams are vital to Four Seasons craft sham since they have epochal control over word-of-mouth promotion for the hotel. In shape to receive customers for conferences, catering or special nonethelessts, a lasting consanguinity demand to be built with unshakables in the local environment. Additionally, it is measurable to understand cultural dimensions to be favored in acquiring the manifest aspects of the problem that are topically sourced. concord to Hofstede measures, Canada and brazil nut vary drastically on all cultural dimensions excluding masculinity.Compared to Canada, brazil has a very racy Power outstrip index (Geert Hofstede Cultural Dimensions, 2009). As a result, the Four Seasons Introductory Training political platform (FSITP) whitethorn take aim to be modified. Currently, all new employees representing different directs of the organization, including house fundingers, department managers, non-paid interns, and so on , are placed into one large group for FSITP. Since local brazilians expect a sharp division among subordinates and supervisors (Gillespie, Jeannet, &038 Hennessey, 2007), unwrap training schedules whitethorn be instituted to pecker for differences in responsibilities.This could pose a problematic repugn because the training program is very standardized and is one of the components that fork out the service competitive advantage. On storey of stark boundaries amidst subordinates and supervisors, lower-level employees are not as comfortable with empowerment than those in low power distance cultures (Gillespie, Jeannet, &038 Hennessey, 2007). The Four Seasons managers may want to draw out providing narrow and clear job descriptions. If narrow job descriptions are constructed, managers essential establish monitoring systems to annul bureaucratic inefficiencies. The greatest difference in the midst of Canada and brazil is on the Individualism ranking. Compared to Canada, brazil-nut tree is a extremely leftist culture. (Geert Hofstede Cultural Dimensions, 2009) This face upt creates a significant challenge in dealings with local ancestryes, whether clients or suppliers. Building and maintaining a relationship demands a substantial amount of time and motion devoted to face-to-face meets. It is not an cushy task to form a air sector contract with brazil nutians without creating a relationship.This task is increasingly difficult because brazil-nut tree is also a marvelously uncertainty voidance culture (Geert Hofstede Cultural Dimensions, 2009). In these circumstances, it would be exceedingly wise to partner with a brazilian lesson. By smashingizing on a local representatives already formal personal and line of business contacts, Four Seasons can conserve a great amount of resources. As it would be almost im realizable for a local representative to impart every conta ct, a significant amount of time necessitate to be al determined for lengthy negotiations and contact building.Although brazil nut and Canada drastically differ in Hofstede cultural dimensions, it is serious to recognize Four Seasons as a profitable foreign company. It has booming take canalizeing its business bewilder across discordant geographic areas, including Latin America. spot the Four Seasons should not replicate their strategy entirely, it would be unwise to not l finish up oneself prior cognition gains from countries, such as Uruguay, that are culturally very alike to Brazil. 2 EDUCATIONAL musical arrangement The intermediate number of years of information for the existence entering the work force is five (Fraga &038 Bowler, eds. , 2008). wishing of a the right way trained workforce could discon trustworthyingly impact the internal operations of the Four Seasons. Strangely, Brazils public universities are excellent in contrast to the countrys under-resour ced primary and lowly schools (Fraga &038 Bowler, eds. , 2008). jibely, Four Seasons should consider partnering with local universities to provide internships, job opportunities, or management training programs. unconnected from managers, Brazils poor education standards may not adversely come to Four Seasons because the company severely emphasizes constitution, rather than work obtain, in recruiting and s resource.Instead, Four Seasons relies on its comprehensive training program to provide the skills requisite to perform required tasks and meet the companys core standards. 3 sexuality ISSUES Common among several Latin American countries is the notion of machismo, the belief that males are superior to females (Doing business vault of heaven in Brazil, 2007). Machismo is perpetuated through ships company with the assignment of conventional roles to men and women. objet dart this view has recently been challenged out-of-pocket to the influx of Brazilian women into bot h high(prenominal) education and the workforce (Doing duty in Brazil, 2007), managers should be aware that it exists.Furthermore, more customers of Four Seasons will be from alien countries where the same sexual urge norms are not present. 4 normative BUSINESS PRACTICES Recognizing that normative business practices vary across b ordinates will be important in succeeding in the Brazilian market, as Brazilian local businesses hold one of Four Seasons marker markets. In increment, well-known(prenominal)ity with the business culture can affect the outcome with essential local suppliers. exotic managers can earn the respect of local associates and illustrate the importance of their relationship by engaging in the local business customs.Upon encounter an associate for the first time, men should shake hands accompanied by a pat on the raise or arm and women should give a kiss on each sauciness (Doing vocation in Brazil, 2007). temporary hookup Brazilians are very informal and elect to be addressed by their first name, some sort of title such as Doctor or Professor ordinarily accustoms it (Brazil First Name or Title? , 2008). Brazilians tend to be exceedingly extroverted and friendly and get along forcible contact go conversing is considered normal (Brazil Conversation, 2008) also, be prepared for personal questions. benefactions are not call for at a first concourse (Brazil Gift Giving, 2010). Since the absolute mass of employees will be Brazilian nationals, normative business practices affect the Four Seasons internal operations in addition to unlike relationships. Due to the countrys collectivistic nature, Brazilians do not work at private desks, but instead, share a large space with several coworkers (Doing Business in Brazil, 2007). If the Four Seasons structures the work environment accordingly, managers must realize that shared workspace results in a constant mix of personal and work- associate conversations and plan deadlines accordingly.Besides workspace, Brazils collectivist culture also impacts break schedule. Brazilians usually take their dejeuner breaks simultaneously (Doing Business in Brazil, 2007). If the Four Seasons agrees to this practice, scheduling will conduct to account for huge arouse changes. A Canadian business manager will be horrified if unaware of the routine aspects of a business meeting. Meetings do not begin on time a meeting normally begins twenty to thirty transactions past the agreed upon time. Once a meeting commences, the setting is very informal.A large portion of time at the onset is dedicated to personal conversations. throughout the meeting, it is not unusual for attendees to take holler calls or leave the room. (Doing Business in Brazil, 2007) Hence, meetings do not serve as an efficient avenue to establish an immediate outcome. Negotiations require time, as Brazilian managers prefer to discuss agreements or disputes among themselves privately this stems from the co llectivist and feminine nature of the culture (Gillespie, Jeannet, &038 Hennessey, 2007).These differences can be curtailed with the help of a local representative, however, each non-Brazilian manager must ac make doledge the lengthy time required to close a deal in order to provide realistic schedule projections and deadlines. 2 POLITICAL ENVIRONMENT 1 POLTICAL SYSTEM Brazil instituted a federal official republic system of governing in 1985 followe the end of military rule. The structure grants a substantial power to the elected hot seat who holds office for four years with the opportunity for one additional term if reelected.The chairwoman reserves the right to elect his/her cabinet, while the people elect members of Congress. Congress represents Brazils twenty-six states and sole federal district of Brasilia through two groups an 81-seat Senate and a 513-member Chamber of Duties. Within Congress, majority power constantly transitions as representatives worst political partie s often. (Background pipeline Brazil, 2010) 2 POLTICAL state of affairs Currently, Luiz Inacio da sylva is nearing the end of his endorsement term of presidency.The upcoming election is plan for October 3, 2010 for a new president. President Luiz Inacio da Silva is using his popularity among Brazilian citizens to software documentation candidate Dilma Rousseff. Rousseffs main opponent, Jose Serra, currently holds an archaean poll advantage. Regardless of the winner of the October election, the Four Seasons will not be significantly affected as both candidates are expected to continue economic rectify and the privatization of industries. (The frugal cognizance unit throng, 2010) 3 DOING BUSINESS IN RANKINGS Canada Brazil cast Doing Business 2010 Doing Business 2010 Ease of Doing Business 8 129 headting a Business 2 126 Dealing with Construction Permits 29 113 Employing Workers 17 138 Registering airscrew 35 great hundred Getting Credit 30 87 Protecting In vestors 5 73 reconcile Taxes 28 150 Trading crossways Borders 38 100 Enforcing Contracts 58 100 Closing a Business 4 131 (The realness money box Group, 2010) epoch conducting business in its home country is some(prenominal) easier than it is in Brazil, Four Seasons operates in more than thirty-five countries, two of which, India and Syria, rank on a lower bedeck Brazil in Ease of Doing Business (The mental home Bank Group, 2010). Seeing as the Four Seasons is a successful transnational enterprise with deep pockets, the struggle to receive credit in Brazil does present a considerable hurdle for the company.To avoid difficulties related to trading across borders, Four Seasons should obtain necessary unmistakable components of its operations from local suppliers. In addition, local products will facilitate a good relationship with the local environment as well as provide a more authentic aim for guests. Areas that would be of impress to Four Seasons include enforcin g contracts, dealing with verbalism permits and registering property deep down Brazil. Fortunately, because the company specializes solely in management, much of the responsibilities associated to troublesome aspects will be shifted to their partner. A local Brazilian partner would be optimal since strong networking and contacts can help alleviate the burdens related to obtaining contracts and permits.Although Brazil is characterized as a new process market, the World Bank Groups Doing Business Rankings demonstrate Brazils institutional flunkes that are more align with a evolution market. For instance, employing workers is extremely difficult at bottom Brazil compared to the rest of the world. A drop of transaction facilitators, such as executive headhunters, makes it extremely taxing to locate and recruit employees that possess the necessary skills to be successful at Four Seasons. This absence peculiarly poses a challenge to Four Seasons because its sustainable competiti ve advantage of superior customer service is facilitated through its employees. Although not as difficult as employing workers, enforcing contracts presents a significant threat to businesses operating(a) inside Brazil.Due to a deprivation of adjudicators, firms will divulge it arduous to imprecate settlement or reli force of contractual partners. This problem is further exacerbated by the cipher of credibility call forthrs and informational analyzers that assist with partner selection. 4 POLITICAL RISK According to The Coface Group, Brazil received an A4 in both Country Rating Risk and Business temper Risk (2010). An A4 rating indicates an unsettled political and economic environment (The Coface Group, 2010). Volatile conditions pose an enormous threat to Four Seasons due to the amount of direct enthronisation needful to offer its service. Unlike a product offering, the Four Seasons does not have the ability to immediately exit, or temporarily leave, the market.In an effo rt to curtail the effectuate of drastic changes, Four Seasons should create a managerial position solely dedicated to environmental scanning. This person should be aware of the significant changes and how they will affect company forecasts. An un shelter environment can greatly deter customers from visiting the Four Seasons, particularly the primary target area segment of brand loyal guests. If a brand loyal guest is stakesed in visiting Latin America, they have the option of staying in a Four Seasons fit(p) in costa Rica, Mexico, Argentina, or Uruguay if Brazil come forths dangerous and/or unsafe. 5 CORRUPTION Transparency International ranked Brazil 75 out of 180 countries with a score of 3. 7 out of 10 0 represents high corruption (2009).Despite the Four Seasons sustain in highly corrupt countries such as China, Argentina, Egypt, India, Mexico and Syria (Transparency International, 2009), Four Seasons must adequately prepare for the effects of corruption in Brazil. It sh ould constitute the knowledge gained from the past by consulting elderly managers convolute in highly corrupt countries to produce contingency plans. However, it is important that the company recognizes differences between countries. For this, Four Seasons should consider using a Brazilian partner. A local partner possesses knowledge of the local community and business environment and can offer an insider perspective on solving obstacles that arise out of corruption.Furthermore, a local partner holds local contacts that may be utilized to put over corrupt organizations or dealings. 6 FOREIGN RELATIONS Brazil cadaver open and friendly toward the majority of countries, oddly its southeast American neighbors. Recently, Brazil has focused on expanding relations with its neighbors through associations such as the Latin American Integration Association (ALADI), the Union of South American Nations (UNASUL), and Mercosur, a customs junction between Argentina, Uruguay, Paraguay, and Brazil, with Chile, Bolivia, Peru, Colombia, and Ecuador as associate members. (Background Note Brazil, 2010) Openness toward foreign nations ensures embargoes, or other forms of impediments, will not disrupt imports. speckle Four Seasons should procure components from local suppliers to enhance its relationship with the environment, the company does not need to spend time c one timerned over delivery of its imported supplies. For imported aspects, Four Seasons should examine countries that are involved in the Mercosur customs union to take advantage of less costly tariffs and/or taxes. Apart from products, Brazils openness ensures that travelers will not confront burdensome procedures to enter the country or hostility from Brazilian citizens when visiting. 3 ECONOMIC ENVIRONMENT 1 OVERVIEW Due to a shift toward market liberalization, Brazil has more than doubled its foxiness flows in the past four years. dapple portfolio investiture has ontogenesisd, foreign direct investment i nflows hit record levels in 2007 and 2008. However, in 2008, Brazil registered its first current-account deficit in five years as a result of a sudden increase in imports. President Luiz Inacio da Silva has focused on a blow exchange rate, rising prices targeting, and primary monetary surpluses to enhance macroeconomic policies, and therefore, increase Brazils global competitiveness. These factors have lead Brazils economy to shift toward a more service-oriented market. Nevertheless, the agricultural sector and diverse industrial base continue to function as enormous drivers of growth. (Fraga &038 Bowler, eds. , 2008) 2 CURRENCYThe modern real was introduced on July 1, 1994 to stabilize the broader Brazilian economy. When introduced, the real was set equivalent to 1 unidade real de valor, a non-circulating currency which ultimately set the real equivalent to 1 US horse. Initially, the real climbed against many major currencies. Strong capital in-flows supported a strong real thr ough late 1995. By 1996, the rally Bank of Brazil instituted tight controls over the real to bring the currencys value down. The currency depreciated soft through 1998, but the Central Bank relaxed controls in 1999 and the real drived a sudden devaluation. From 1999 to 2002, the currency remained relatively volatile tete-a-tete major orld currencies. By mid-2002, the real reached an all-time low against the Canadian dollar, along with many major currencies, including the US dollar. The presidential election in late 2002 brought long needed stability to the Brazilian currency. From late 2002 to October 2008, the real slowly appreciated against the Canadian dollar and other major currencies. When the financial crisis hit in late 2008, the currency bounced from rates not seen since 2001 to around R$2C$1. Since the crisis, the currency has again been slowly appreciating against the Canadian dollar. In recent months, the real has been slightly depreciating against the Canadian doll ar.Overall, the Brazilian real stay a relatively stable currency, especially among Latin American currencies. This will benefit the Four Seasons, as it repatriates profits to headquarters and pays local suppliers. However, as with any foreign currency &8212 especially those in new growth markets &8212 electric resistance from fluctuation isnt a rule. vernal regimes can disconfirmingly affect currency, as well as Brazils significant current account deficit, significant administration spending on the World Cup and Olympics and susceptibility to puffiness. Four Seasons plans on pricing in US dollars, which assemblings to many of its target markets and is consistent with Four Seasons across the globe. 3 INFLATIONSince 2003, Brazil has been successful in easing pompousness pressures on account of strict monetary constitution and an appreciation of the Real (Fraga &038 Bowler, eds. , 2008). Yet recently, inflation has rose in recent months owing mainly to the global recession as w ell as increased honorarium and inertial pressures within the country. The Central Bank of Brazil has set a target of 4. 5% for 2010. The Economic Intelligence Unit is optimistic, predicting that inflation will fall 4. 8% to 2. 5% between 2010 and 2011. (The Economic Intelligence Unit Group, 2010) Four Seasons must constantly monitor the inflation rate once within Brazil. If the EIU is correct, a 2. 3% change in the inflation rate will have an enormous impact on the operations (The Economic Intelligence Unit Group, 2010).Brazil will need to constantly change their prices in order to keep up with large-scale changes. Fortunately, the majority of price postings occur through the companys website allowing the company to avoid immense be required to reprint materials. blueer inflation translates into higher prices not notwithstanding for Four Seasons guests, but also for components the hotel buys from local suppliers or imports from other countries. Additionally, Four Seasons may co nsider using employee contracts that adjust for inflation to accommodate anger associated with loss of purchasing power. Luckily, the EIU predicts inflation to decrease and remain relatively stable in the future at 2. % (The Economic Intelligence Unit Group, 2010), limiting negative consequences incurred by operations. 4 LABOR CODES The Brazilian presidency requires all companies, foreign and domestic, to provide specific elements to its employees including thirty days of yearbook leave, an annual bonus equal to one months salary, and severance pay if dismissed without a cause. Additionally, if a firm employs more than common chord employees, Brazilian nationals must account for two-thirds of the total employees and payroll. Brazil has instituted a system of labor courts to handle body of work disputes involving working conditions, wages, dismissal, and so forth (The incision of Commerce, 2009) It would be ill advised to ignore government employment requirements.Not only woul d the company seek being forced out of the market, Four Seasons would incur a tarnished composition within the global arena. When hiring and scheduling future employees, Four Seasons must account for each individuals thirty days of leave the firm must settle whether it will assign vacation time or negotiate with employees for specific requests. If two-thirds of payroll must be distributed to Brazilian nationals, Four Seasons should scan the local environment for senior management positions, as these executives tend to lay out a large portion of pay. As Four Seasons offers a service requiring an tramp of different workers, the company must find a way to ooperate with highly enroll Brazilian workforce currently, over 16,000 unions exist who are very well nonionized and are not hesitant to use aggressive methods (The department of Commerce, 2009). A local partner may possess apt(p) information to help alleviate any contentions that may arise. 5 INFRASTRUCTURE President Luiz In acio da Silva announced the harvest-feast Acceleration Plan in 2007, which perpetrate a US $296 one million million investment in foot by the end of 2010. Although the GAP is promising, Brazils infrastructure remains one of the largest obstacles within the economy. ugly quality and numerous deficiencies remain in roads, ports and airports no passenger trains travel outside the suburbs of major cities and only 12. 5% of the existent roads are paved. (The Department of Commerce, 2009) period the 2016 Summer Olympics should increase incentives for private companies to repair infrastructure, Four Seasons must contemplate the effects of a poor transportation system. It may want to consider sourcing the majority of its tangible components from nearby local suppliers to ensure bushel and fast delivery. Furthermore, imports are more probable to be priced higher on account of the inefficiencies within the infrastructure. A foreign direct investment is an option to increase force and satisfaction Four Seasons should investigate options near the hotel in addition to driveways travelers predominately use. For example, it could form a strategic alliance with another(prenominal) firm to enhance the roads to and from the airport. 4 LEGAL ENVIRONMENT 1 INTELLECTUAL plazaBrazil is a signatory to various agreements calling Related Aspects of Intellectual Property (TRIPS) Agreement, the Bern Convention on aesthetical Property, the Patent Cooperation Treaty, and the Paris Convention on rampart of Intellectual Propertycommitting the government to stringent protection of intellectual property rights. The decision to take part in international contracts was the countrys first realistic step toward putting an end to issues such as copyright infringement, however, plagiarisation and counterfeiting remains a problem within Brazil. (The Department of Commerce, 2009) While Four Seasons does not possess a substantial amount of intellectual property that would queer its exis tence, it does need to consider violations when procuring components for its hotel, particularly authentic furniture, decorations and artwork.It would be wise for Four Seasons to implement a system used to differentiate genuine pieces from others. 2 ENTRY MODE Four Seasons, or any foreign or domestic private entity, may establish, own, and persuade of business entities allowing the company to chose any entry mode grounded solely in its own decision fashioning (The Department of Commerce, 2009). Although a neglect of government regulation offers the firm freedom of choice, it would be extremely effectual to use a local representative to own the hotel building itself. As antecedently mentioned, Brazil is a highly collectivist culture that requires an extensive amount of time dedicated to relationship building to be successful in procuring supplies, building contracts, permits, etc.A local partner possesses established networks that can be utilized to sidestep regulations and corru ption in addition to knowledge specific to the Brazilian environment. 3 IMPORTS Brazil imports are subject to three crack up taxes Import Duty (II), Federal modify Product tax (IPI) and the State intersection and Service Circulation tax (ICMS) (The Department of Commerce, 2009). Because both the IPI and ICMS are value-added taxes (The Department of Commerce, 2009), imports end up becoming very expensive for customers. Unless a specific tangible component is captious to the success of Four Seasons, it would be in the countrys best worry to purchase supplies from local businesses to avoid high prices pushed down to the customer because of high taxes.High import taxes paired with Brazils poor infrastructure will threaten the safe and efficient obtainment of products. If the Four Seasons depends on certain aspects from headquarters, or another Four Seasons location, it should be aware that the foreign entity must register with Foreign Trade Secretariat (SECEX) in order to conduct tr ade with Brazil. 4 TRADE AGREEMENTS Brazil has established bilateral investment agreements with numerous countries including Belgium, Luxembourg, Chile, Cuba, Denmark, Finland, France, Germany, Italy, Republic of Korea, Netherlands, Portugal, Switzerland, United Kingdom and Venezuela however, the Brazilian Congress has not yet validate any of these. (The Department of Commerce, 2009)Brazil has sign Mercosur, a regional trade agreement, between itself and Argentina, Uruguay, Paraguay, and Brazil, with Chile, Bolivia, Peru, Colombia, and Ecuador as associate members (The Department of Commerce, 2009). If imports are required, Brazil should heavily consider sourcing from countries involved to significantly decrease costs associated with imports. Furthermore, Brazil maintains a double taxation with Canada, making imports from its headquarters extremely expensive. 5 LABELING Labeling requirements should not present Four Seasons with a noteworthy barrier. Firstly, the primary focus of the company is services, not products. Besides the gift shop and viands menus, Brazil will rarely come across barriers in labeling. Secondly, The Brazilian Customer Protection Code does not call for bohemian or outlandish.Specifically, labeling must provide the consumer with precise and easily readable information about the products quality, quantity, composition, price, guarantee, shelf life, origin, and risks to the consumers health and safety (The Department of Commerce, 2009). The only hurdle Four Seasons may see relating to labeling is a Lusitanian translation and metric function equivalent to the requirements listed above. 6 PROMOTION indicate institutionalize is emerging in Brazil as a very serviceable method for reaching Brazilian consumers citizens receive an clean of 9. 3 pieces of direct mail every month and 74% of Brazilians prefer direct mail to create cognizance of a new product or service (The Department of Commerce, 2009). Four Seasons is support to use d irect mail to target local businesses and community members within its promotional aspect of its marketing campaign.It should especially use Veja, the most popular magazine in Brail with an average of one million copies dispersed a week, and Folha de Sao Paulo, the largest newspaper with an average of 317,000 copies distributed Monday through Friday and 400,00 on Sunday (The Department of Commerce, 2009). Media in Brail is still heavily controlled through the public sector foreign ownership is throttle to 49% (The Department of Commerce, 2009). This should not affect Four Seasons greatly since the company avoids advertisements in mass media outlets. Also, the majority of Four Seasons target segments does not reside in Brazil. 2 COMPETITIVE ANALYSIS Many transnationals, especially Four Seasons traditional competitors, have yet to enter the Brazilian market or only have a small presence in Rio de Janeiro.Additionally, there are only a small number of luxury local brands in Rio de Jan eiro that are capable of competing with Four Seasons. In many regards, Brazil remains a relatively untapped market, though a number of international brands have recently begun eyeing the market, including Hilton. With the increased opportunity in Brazil, now more than ever may be a great time to enter the young market, armed with the experience learned through other brands ventures. 1 MAJOR COMPETITORS 1 PESTANA HOTELS AND RESORTS (PORTUGAL) Pestana is Portugals largest touristry and untenanted group, operating 41 hotels across 3 continents in countries with former colonial ties to Portugal (Pestana, n. d. ).Pestana entered Brazil via Rio de Janeiro in 1999 with a local partner, Renato Albuquerque Group (Grupo da Madeira investe US$25 milhoes no Brasil, 1999). Rather than building a new establishment, the company acquired the Carlton Rio Atlantica hotel, modernized the establishment, and added a new business nerve centre to overstretch business travelers (Grupo Pestana lanca ca rtao no Rio, 2001). Since 1999, Pestana has been heavily investing in Brazil and considers Rio de Janeiro a central point for the company (Grupo Pestana lanca cartao no Rio, 2001). By 2001, Brazil accounted for 20% of Pestanas hotel business (Grupo Pestana reforca atuacao no Pais, 2001). By 2004, the company had candid 6 hotels across Brazil with the tell goal of opening 10 more hotels within the next 10 years.The companys significant investment in the market $110 million by 2004 has brought increased authenticity and credibility to the Brazilian market as an opportunity for luxury and business travel, according to Francisco Rabelo, financing handler for Bank of Northeastern Brazil. This significant growth has been fueled by the companys success in the country the company has achieved an average annual return of 31% on its investments and the country is already its best performing territory in Pestanas portfolio. The Director of the Finance and Investment advance Department o f Brazils Tourism Ministry give tongue to the group was one of the largest hotel groups in Brazil by 2005 the company was expected to have 400,000 room-nights in the country, more than any other hotel filament (Renata, 2006). star of Pestanas most perceptible additions is its knowing understanding of Portuguese culture, being a Portuguese company. Brazils cultural and colonial ties to Portugal make the Brazilian market a particularly charismatic market for Pestana, and as the companys exceptional returns have demonstrated, Pestana is taking full advantage of its country-of-origin effects. With the companys high knowledge of local culture and Brazils cultural similarity to Portugal, the company is able to keep the services within Brazil appear as very place without adapting its standardized services much. This is a trend Pestana has demonstrated in the past, as it only enters markets with cultural ties to its home market (Pestana, n. d. ).In this sense, Pestana can maintain a r elatively standardized offering while appearing to be adapting to the local mount. This home(a) knowledge of Brazilian culture will be rewarding, as other multinationals dont have access to or credibility with local culture. another(prenominal) unique advantage that Pestana has is its ability to build pousadas within Brazil. Pousadas are boutique, luxury hotels that encapsulate Portuguese culture. Until 2003, the Portuguese government was responsible for developing and managing the hotels. Pestana bought the sole rights to building pousadas from the Portuguese government in 2003, though the government maintains highly involved in overseeing each new pousada to ensure it meets minimum standards (Pousadas de Portugal, n. d. ).Pestana has expressed interest in bringing these unique products to Brazil and deald the body structure of one in 1999. The company plans on expanding its offerings in the coming years in tandem with its perpetration to building 10 hotels in the coming 10 ye ars (Renata, 2006). These hotels automatically connect with locals and foreigners abroad who want an authentic experience in Brazil. No other hotel stove can emulate these boutique hotels even localizing a hotel as much as possible wont replicate a pousada as it wont have the unique stamp by the Portuguese government. Moreover, pousadas are often located in historic buildings, making them even more of an attractive computer address (Pousadas de Portugal, n. d. ).Pousadas have the curtain raising of attracting travelers interested in an authentic experience without the risk of traveling to an inexplicable hotel. Travelers can experience aureate accommodations and be service in the local context of pure and authentic Portuguese culture, service and food. In fact, Brazils Minister of Tourism has said that pousads will attract a higher class of tourists who are willing to pay additional money for the unique experience (Renata, 2006). Another energy Pestana has demonstrated is it s ability to connect with locals and operate efficiently within the local political and economic environment. across Brazil, Pestana has demonstrated a tendency to enter cities by acquiring local hotels, as it did in Rio de Janeiro and Natal.This ensures that the hotels Pestana operates have a understandably local flair and enable the company to penetrate the market quicker, avoiding lengthy construction times. The company also enters local markets with local partners, though it uses different partners in different cities. This willingness to share ownership gives the company regnant local allies and gives the company legitimacy among locals. These are important strengths, as many other multinationals are less successful at navigating Brazils compound and corrupt government. Moreover, entering a market with a local partner shifts risk and offers the company invaluable local knowledge.A possible helplessness the group has is its organizational structure. The group maintains an International Division governance structure. While Pestana only operates in markets based on the Portuguese culture, countries with similar histories still vary greatly in wrong of market power, government regulation and destination type. By clumping all international destinations under one group, the company may hand out to amply take advantage of each market or understand each market. The companys overleap of resources commit solely to Brazil may enable competitors to build a structure that is more flexible and responsive to trends and changes within the Brazilian market.Further, as the company begins expanding outside Brazil into other South American countries, the company may continue to dilute its watchfulness to Brazil, thereby rendering many of its electric potential strengths as much less poignant. A final weakness of the company is its tearing focus on growth. Between its 10 hotels in 10 years policy in Brazil, and its overarching 30 hotels in 30 years policy, Pest ana may begin to focus on quantity above quality. While the companys unique products and intimate knowledge of Portuguese culture may attract luxury travelers at first, maintaining the high quality and service standards demanded by the business traveler and luxury void traveler may to be difficult amidst such an emphasis on growth.Finally, as the number of hotels have by Pestana surges, the company may saturate the market and devalue the bangle of its brand. The hotels may become less bid and less of a destination as they become ubiquitous and commonplace. 2 STARWOOD HOTELS &038 RESORTS (UNITED STATES) AND aureate TULIP HOSPITALITY (SWITZERLAND) Starwood is one of the worlds largest and most geographically diverse hotel and leisure companies. The company is primarily a hotel management corporation, responsible for luxury brands The Luxury arrangement, Regis, W and Le Meridien and other midrange brands Westin, Sheraton and Element (Starwood Hotels &038 Resorts). Until recently, the companys sole exposure to Rio de Janeiro was its three Sheraton hotels, two of which lacked a spa.While the hotels have meeting faculties, the hotels dont appear in trade magazines as specifically targeting the business community. As such, these three hotels are not considered to be in direct competition to the Four Seasons because they do not focus on any of our target markets. On June 12, 2009, Starwood acquired princely Tulip Hospitality, a global hospitality company with a strong focus on the corporate traveler. Tulip manages three hotel chains, including the upscale Golden Tulip, which focuses on business travelers, and the luxurious Royal Tulip, which focuses on leisure travelers (Golden Tulip Hospitality). Tulip has one property in Rio de Janeiro, the Golden Tulip Ipanema Plaza.The property has a spa and complete business center. The hotels focus on corporate travel finally endorses Starwood as a viable competitor in the Rio de Janeiro market. Tulip is a unique hotel ins omuch as it relies on international standards of service, yet has been relatively successful at integrating local flavors into its brand. The company advertises its local touches through its advertizing campaign, International standards, local flavors. Tulips worldwide presence also lends it strong appeal and acceptance worldwide, especially among the luxury and business traveler. This is, in part, due to its global standards of service that international travelers have come to know and rely on.Tulips ability to incorporate local culture into a standardized brand is a stiff competitive advantage. Maintaining standard levels of service is important to the international traveler, as it assures him/her what to expect when traveling and builds brand virtue. However, by maintaining these standards and adding local culture into each property, Tulip finds a middle ground between standardization and adaptation. This is a strategy that enables the company to remain flexible to local deman ds and local clients, but also cater to international travelers. One strength of the Starwoods encyclopedism of Tulip is Tulips acceptance among the international elite.Until the eruditeness, Starwoods two luxury brands St. Regis and the Luxury Collection did not have properties in Brazil. This acquisition gives Starwood immediate penetration into Rio with a long-familiar and be portfolio of properties. With Starwoods and Tulips feature international experience, the group can efficaciously begin targeting the elite traveler more vigorously. Co-branding opportunities and brand extension opportunities also exist, as both hotel companies have more luxurious brands they could deploy in Rio de Janeiro if the Golden Tulip proves successful. Moreover, Starwoods large reserve of loyal guests gives the have company an automatic target market from which to draw.A final strength of the optical fusion is Starwoods and Tulips global memorial and established luxury brands lend it opi nion among the international elite. The companys brand equity is an important strategic asset that can be used to connect with world travelers and attract them to their properties in Brazil. Starwoods skill at managing a portfolio of septuple brands is important, as Tulip becomes another brand that Starwood can leverage, advertise and use to attract travelers. One potential weakness of the merger is the possibility that incongruous corporate cultures may obturate the companies ability to synergize strengths and build a comprehensive network.As with any merger, it takes time to fully integrate a new company into an active company, and Starwood must be able to keep Tulips corporate culture in tact if it hopes to reap the benefits of the companys strengths. If Starwood tries to change or adapt Tulip too much, it will lose Tulips connections with the business traveler and the companys unique ability to combine international standards with local adaptation. Starwood must focus on mai ntaining Tulips brand identity and equity, while simultaneously merging the company into its portfolio to fully realize a competitive advantage. Another possible weakness is Starwoods control exposure to the Brazilian market, especially Rio de Janeiros luxury market.While Tulip has been in Brazil for some time, and both companies have experience in the luxury segment, Starwood is less familiar with the luxury hotel segment in Brazil than some of its existing competitors. This lack of experience could prove to be harmful if Starwood is not careful in executing operations, especially since the Brazilian market has proven to be difficult for international brands to tap. Starwood and Tulip both lack a positive country-of-origin effect, as the Brazilian market has proven to be fiercely loyal to local and Portuguese brands. assuming that the namesake of its hotels will make the company successful could prove to be an unsuccessful route for the company to head. MARRIOTT INTERNATIONAL (U NITED STATES) Marriott is one of the worlds largest lodging companies with over 3,000 hotels riddle across 67 countries. Marriott primarily franchises under an array of brands, including the luxurious J. W. Marriott and Ritz Carlton and other full-service and other mid-tier hotels (Marriott). Marriott entered Rio de Janeiro in 2001, focusing its efforts on attracting luxury business travelers to respond to the countrys bourgeoning market (Hotels check into Brazil). The opening of the J. W. Marriott in 2001 marked the citys first new five-star resort in over 12 years (A new Rio de Janeiro Marriott Hotel, 2001). The J. W.Marriott is one of Brazils two multinational hotels on Travel + Leisures Worlds Best Hotels 2010 list, a comprehensive lean on the worlds vitamin D best hotels (T+L vitamin D Worlds Best Hotels 2010, n. d. ). The hotel offers a full-service spa, executive floor, complete business facilities and banquet halls and on-site restaurants. forrader opening the hotel, M arriott sold off its stake in the hotel with the help of a local consulting firm. However, the acquisition of land along with the sign costs and design were all sponsored by Marriott without the specific help of locals. Marriott retained control over management of the hotel (Rede Marriott e Odebrecht colocam hotel carioca a venda).Marriott is the largest and most recognized multinational brand currently in Brazil. The J. W. Marriott brand, in particular, has ring with our target markets, especially luxury travelers, as demonstrated by its placement on the Travel + Leisure rankings. This is a powerful asset, as the combination of brand equity, name recognition and recognized quality may connect with luxury world travelers. Moreover, the companys worldwide presence and name recognition may also vibrate with business travelers who are already familiar with the brand and trust the hotel to be a quality establishment. A major weakness the hotel faces also stems from its name. Like oth er multinational chains discussed, Brazilians prefer local hotels.The negative country-of-origin effects have hurt Marriott, as US flags are not unavoidably familiar locally since Brazilians exposure to these brands is significantly more bound and Brazilians tend to be attracted to local brands. This is a weakness the company faces when targeting local visitors and businesses, another target market that the Four Seasons is hoping to target. Another weakness Marriott faces is its lack of local partnerships. When entering the market, Marriott did not hunt for a partner. This is in stark contrast to other successful chains, especially since Marriott lacks experience in the Brazilian market overall. According to the CEO In order to move forward, we will need to find common ground with the Brazilian business sit and probably take some equity positions in some of the developments to gain market knowledge and brand acknowledgement.A second option is to enter with our existing relationsh ips through local partners to implement our manage-franchise business model (ONeill &038 Chao, 2008). Coming from a country with significantly different normative business practices and limited exposure to Brazilian culture despite its significant international presence has proven a difficult obstacle for Marriott. This is an important weakness to consider for all multinational companies, especially those unfamiliar with the Brazilian marketplace. A final weakness Marriott faces is its pricing structure, which is higher than many of its competitors. While the hotel has higher rankings than other multinationals, if the benefits of the brand are not properly communicated, the hotel may seem overpriced.Moreover, if the hotel does not specialise itself as luxurious, the company may face problems persuading international travelers to choose an American hotel chain over a more localized chain. 4 COPACABANA PALACE BY ORIENT-EXPRESS HOTELS (BERMUDA) The Copacabana palace is a historic, luxury hotel built in 1923. It is considered by many around the world as the place to stay in Rio (Doyle, 2009). The Copacabana Palace is one of three hotels on Travel + Leisures Worlds Best Hotels 2010 list located in Brazil (T+L 500 Worlds Best Hotels 2010, n. d. ). Additionally, the hotel is a member of the 5 Star Alliance, an online travel way of life that partners with the worlds most luxurious hotels.Owned by the Guinle family of Rio de Janiero until 1989, the hotel is now owned by Orient-Express (Five Star Alliance, n. d. ). Orient-Express purchases individual luxury hotels across the globe. The company does not advertise itself as a chain, rather post each property individually. Properties are managed locally every hotelhas its own name and personality (Orient-Express, n. d. ). Following its purchase, Orient-Express renovated the hotel, outfitting the fifth floor as an executive business center to focus on business travelers. The hotel includes meeting facilities and banqu et facilities, all aimed at business travelers needs (Five Star Alliance, n. d. ).The hotel also focuses significantly on elite travelers, as its reputation for service and quality attract politicians, royal line and actors. The hotel has a complete spa and two restaurants, neither of which serves Brazilian cuisine (Five Star Alliance, n. d. ). An important advantage the Copacabana Palace has is its bequest and long-term association with Brazil. From its beginnings, the company has been intertwined into local culture. The owners were local and today, Orient-Express continues to manage the hotel as an self-sufficing property. Many view the hotel as the nations preeminent local option, and foreigners who want an authentic experience may opt to stay at the Copacabana Palace over other multinational chains.The hotels brand equity is particularly strong, as it is a clear favorite among elite travelers. The companys increased focus on business travelers further expands the hotels brand e quity and product scope. Another strength the Copacabana Palace is its long history in Rio de Janeiro. The companys experiences in Rio de Janeiro give it a level of knowledge foreign multinationals cant match. Moreover, the companys success in Rio de Janeiro reflects its ability to work within the countrys legal and political structure. As investment increases in Rio de Janeiro and new multinational chains enter the market, Copacabanas deep understanding of local cultures and the regulatory environment will be exponentially more valuable.While the company is known to Brazilians and the well-traveled elite, a lack of a true multinational brand name may stymie some elite travelers. Not only does the company lack a network of brand loyal patrons, the lack of an internationally recognized brand name may make some travelers hesitant. Additionally, the hotels high price may make other, more familiar options more appealing to travelers, who are sure of the level of quality to expect. 5 FAS ANO HOTELS (BRAZIL) Fasano is one of the some remaining local competitors yet to be acquired. The company was established in 1982 as a beginning(a) restaurant the company remains recognized for its culinary achievements.The restaurant pioneered the gastronomic movement in Brazil and continues to uphold its elegant blend of contemporary and traditional Brazilian cuisine. In 2003, Fasano open(a) its first hotel in Sao Paulo. In the same year, Fasano became a member of the Leading keen Hotels of the World (Five-Star Alliance) and was ranked as one of the worlds 50 best hotels in Travel + Leisure (Fasano, 2010). Fasano opened a hotel in Rio de Janeiro in 2007 amid great hype and reviews, eclipsing the fabled Copacabana Palace as the top play den for Brazils rich and famous (Beehner). From its foundation to the finishing touches, Fasano is a local competitor. This is a significant strength the hotel has, as its numerous restaurants all share the spirit of Fasanos famed culinary exper tise.The hotel is designed in Bossa Nova-chic style and Brazilian touches compliment every aspect of the hotel. More than any competitor, Fasano remains a localized and focused hotelier, and has limited experience outside the growing Brazilian market. Fasano is a travelers only real option, when he/she wants to stay at a local, luxury resort. Every other luxury boutique hotel has been acquired or is at a different tier of service than Four Seasons. Another strength Fasano has is its long-term, strategic partnership with real-estate developer JHSF. This has given Fasano access to the Brazilian market and enabled the company to take less risky positions in its hotels as JHSF has a 50. 1% stake in the hotel.This also frees up capital for other ventures, as the company is currently building additional properties in Brazil and Uruguay. A possible weakness of Fasano is its lack of experience managing hotels and meeting the expectations of guests, especially foreigners. As Brazils most exp ensive hotel, the elite guests who condescend Fasano have incredibly high expectations. While multinationals have experiences with such clientele, Fasano does not have the same expertise in dealing with this segment and may be overextending its existing resources in an attempt to compete with world-class contenders. Indeed, excitement over the hotel has faded since its opening in 2007 and the company continues to charge a significant premium over every other Brazilian hotel.Another weakness is the companys