A Director’s Reflection

The Schmid Center for International Business hosted the January, 2012 MBA International Travel class to Brazil. Students visited an array of foreign and local invested corporations to gain an in-depth appreciation of global operations and an appreciation of Brazilian business culture.

In Sao Paulo, a mega city with more than 20 million residents, students’ first stop was the U.S. Department of Commerce. Here, Sean Kelley talked of the export opportunities for U.S. business in light of Brazil’s $735 billion infrastructure upgrade in preparation for the 2014 FIFA World Cup and the 2016 Summer Olympics.

At UNICA, the Brazilian Sugarcane Association, we learned that Brazil has one of the cleanest energy matrices the world, with flex fuel vehicles comprising 9 out of 10 cars sold in Brazil.

At Itau, one of Brazil’s most successful private sector banks, we learned of the challenging environment for local entrepreneurs, with interest rates to businesses in the 1.8-4.5% per month range, and consumer credit cards averaging 442% per year!

Next up was Natura, an eco-friendly cosmetics company that used only natural ingredients, many sourced in a sustainable fashion from the Amazonia region. With over 1 million sales consultants in Brazil these “Natura Ladies” are ready to give the Mary Kay folks and their pink Cadillacs a run for their money!

On the five hour coach trip to Rio de Janeiro we stopped off in Guarantingueta to visit the German chemical giant BASF. There, Willi Nass, VP of the chemical complex lead the class though a presentation of the BASF corporate strategy of “Transforming Chemistry of Life”.  Later on Friday night we arrived in Rio de Janeiro, allowing for a weekend respite of visits to Cristo Redentor, optional visits to favelas, or paragliding for the more adventurous.

On Monday we refueled with Petrobras, Brazil’s oil giant, and responsible for 1/3 of new oil discoveries in the world. In addition to corporate visits we also dropped by Viva Rio, the highly successful NGO charged with decreasing violence in the city in light of the aftermath of the Candelaria Massacre in 1993.

Our final trip was to the media conglomerate TV Globo with its dominating role in Brazilian culture. Globo captures a commanding 50-65% market share of all TV’s in the country during prime time.  There, Caique Santiago spoke of TV Globo  strategies for new media technologies . Mr. Santiago also shared with us TV Globo’s initiatives with Amigos da Escola, partnerships in social advertising, and the diversity of themes in your telenovelas that focus on and nurture themes of social responsibility.

In between corporate visits students soaked in the differences between “Cariocas” people living in Rio de Janeiro versus Paulistas” those living in Sao Paulo.   The majority vote seemed to favor the beach-loving Cariocas, though I wondered if they would prefer the salaries of the finance-oriented Paulitas!

Until next time,

Noel

The Final Day

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our entry for the final travel day, January, 1/28 comes from Kevin Tunstill.  This isn’t the end of our blog – we will periodically keep posting news and updates about the Brazil Travel program at Chapman University.  The next Brazil Travel Course will be for our cadre of  undergraduates in June.

Sadly, our trip to Rio de Janeiro is finally coming to an end as we cross the final things off of our to do lists.  Several students chose to spend their last day touring a favela from the back of a Jeep, while others went shopping in Ipanema and Copacabana for souvenirs to take home to their loved ones.  Two of our classmates headed to Iguazu Falls for the weekend to take in the amazing views, and another eight students who decided to stay at our hotel in Leblon for a few more days waved farewell to the bus as it left for the airport.

The trip as a whole was an extremely valuable learning experience that none of us will ever forget.  It was an exciting opportunity to immerse ourselves in a fascinating culture that is unlike ours in many ways.

– Kevin

The Dona Marta Favela Trip

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our entry for Wednesday, 1/25 comes from Ondrej Skorpil.

It was impossible to skip a trip to a favela after seeing the City of Men film. Doug Tuggle, Tamara Stone, Kim Bowman, Petr Vostry and I signed up for the trip on Wednesday, i.e. our departure date. Although our tour guide Pablo warned us that the Jeep might not arrive on time, it actually did. We received a warm welcome by Linda, a true Carioca and – as it turned out pretty soon – the Jeep’s GPS navigation.

Along with us went an elderly Finnish couple and a young German couple. Their English, much to my surprise, was rather limited, so the entire conversation took place between us Chapman folks and our Carioca guide, Linda. Even before reaching the Dona Marta (also known as Santa Marta) favela, we learned a lot about the Brazilian nature from this elderly, charming, talkative and open woman. For example, while Brazilians love soccer, they are virtually unfamiliar with ice hockey. Much like other Latin Americans, Brazilians keep postponing the delivery of particular projects till the ultimate deadline, or perhaps a tiny little bit past the deadline. So while FIFA bosses are beginning to be slightly nervous about Rio’s unpreparedness for the 2014 world cup, the Cariocas are quite positive that things will somehow get accomplished in the end. Asked to explain the true meaning of the word Carioca, Linda happily answered that a Carioca is any person – man or woman – who is living a Rio life. Such a person might be American, Irish or Czech by origin, but if he or she moves to Rio de Janeiro and starts living by the Rio rules, he or she automatically becomes a Carioca. One practical piece of advice from Linda: should you wish to become a true Carioca, never stop at the red light after 9 p.m.!

After about a thirty-minute drive we finally reached the Dona Marta favela. Dona Marta had been “pacified” by the government of Brazil years ago, and was thus perfectly safe for us to walk through. The “pacification” process, we learned, is a fairly tough one. The government basically starts by sending in the army with tanks and soldiers equipped with automatic weapons to clean the favela from drug lords and mafia bosses. Subsequently it installs a police peace corps station within the favela to maintain the law and order on a permanent basis. Earlier attempts to solve the favela problem included the government tearing down three entire favelas and moving their inhabitants to the so-called City of God. This approach, however, brought about serious problems because the favelados did not have enough job opportunities in or near the city and both inbound and outbound transportation was extremely poor.

In Dona Marta we saw smiling, happy favelados living in poor conditions as measured by western standards. All children we have seen were perfectly clean and dressed in modern cloths. (One can have serious doubts if their Nike and Adidas t-shirts were really manufactured by the respective companies, but then – the “Rolex” watches I was offered on a downtown New York City street several weeks ago were apparent fakes too, and no one seemed to care about it too much.)

After a while, we reached the terrace where Michael Jackson shot his famous They Don’t Care About Us video clip in 1996. A gentleman who was showing us the clip in a nearby store was visibly proud each time his favela appeared in the video. No wonder Michael’s statue occupies an honorable space on the terrace and apparently is a popular meeting point for favelados as well as visitors.

People of Dona Marta do not own the land, but they did get an official title to their once illegally built houses. This presents a key advantage for them because houses can nowadays be freely sold and bought. This is practically demonstrated by favelados selling their rooftops to people who build an extra storey atop the current structure.

We were interested to know if a favela inhabitant is likely to move out to a better house when he or she gets a well-paying job that moves him or her to the middle class. Linda explained that this happens very rarely because favelados typically create very strong ties with their neighbors or other family members living in the same favela. Unless the whole family or clan could move out to a better place, an individual would not break his or her relationships and would in most cases opt to stay in the favela with his or her significant others.

The trip to Dona Marta was a wonderful and unique experience of Rio right before heading back to California. As far as I am concerned, a favela trip is a must-see for everyone who wishes to discover Rio de Janeiro off the beaten track.

Post Scriptum

In the evening we were literally appalled by the extremely low quality of the Rio de Janeiro Galeão-Antonio Carlos Jobim International Airport. An outdated facility in an apparent need of a major refurbishment is not something one would expect in a city of 6.3 million people that should be getting ready to host the 2014 FIFA World Cup and the 2016 Summer Olympics. No English speaking staff at the kiosks and very rude sales clerks only underlined our overall negative impression. Hours later we found out about two high-rises in downtown Rio collapsing causing at least four people to die while two dozen were still missing. Rio is, without a doubt, a breath-taking city. However, it still has to take a long journey to transform itself into a truly vibrant metropolis that is safe and enjoyable for everyone and capable of hosting first-class international events.

– Ondrej

Media and Religion in Brazil

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our entry for Tuesday, 1/24 comes from Petr Vostry and Vaclav Mares.

Tuesday January 24 was the last day of corporate visits. We visited TV Globo in the morning and the Cristo Redentor afterwards.

TV Globo

TV Globo concentrates mostly on national audience but it is also broadcasted abroad. The whole media group comprises of various media channels such as radio, newspapers, music, books, magazines, TV broadcasting, and pay TV.

The company presentation (including the short promotion video) was very professional.  Both speakers proved their dedication to the company’s passion, ideas and values, which are “Inform, Educate and Entertain”. TV Globo was founded in 1965 as local TV station in Rio.  In 1969 its broadcast became national, and it now covers 99% of territory and population in the country. It employs around 20,000 employees and generated USD $6.9 billion in revenue in 2010, with 62 % coming from commercial advertisement.

TV Globo is the flag ship of the media group. Its audience share is 45% in prime time (6 pm till 12 pm) and its share of TV advertisement market is 74%. This provides TV Globo with a very favorable power ratio of 1.6 (power ratio = TV advertisement market share / Audience share) in the 5^th biggest advertisement market and 3^rd biggest TV advertisement market in the world.

The biggest challenge which TV Globo has recently faced is a change of habits in the advertisement market, mainly the decrease of TV advertisement share in light of new communication media channels like the internet. It is a recent worldwide trend and it is a little bit slower in this particular area in Brazil in comparison to other developed countries. TV Globo is currently adapting to the internet environment, as well as portable devices like smart phones and portable TV sets. It is changing from a TV station to a Media Station.

Despite weaker regulation of TV media market as compared to the Czech Republic, TV Globo acts in line with government’s and audience’s needs. TV Globo dwells on keeping of national identity as domestic production forms 90% of broadcasting time. Brazilian families don’t mostly have sufficient money to visit cinemas so TV Gloxbo produces substitutes in the form of series called “telenovelas”. Company also responsibly accepts its national role and allows government to incorporate requested social values into telenovelas and other programs to influence society’s behavior.

After the presentation we were shown interior stages, costumes warehouse, directors’ rooms and we had also occasion to see exteriors built outside in the country.

Corcovado Mountain

Our last organized trip led us to Corcovado Mountain with statue of Christ the Redeemer and marvelous view of the city. We enjoyed the place very much. It also gave us a chance to think about religion and its influence on business with Brazilian. Our guide Pablo was very kind to share high-level information with us. General in Brazil, Catholic Church counts for 80% of Brazilian, the rest belongs to Evangelic Church. Doing business with Catholics looks pretty similar to US approach. They separate business and religion and concentrate primarily on financial aspects and results. Evangelists are different. They could be offended if you were talking solely about financials and you would omit to respect their ideas and emotions in business decisions.

To sum up – the Brazilian society is open minded and religion is not a seriously limiting factor. It need not be closely watched when establishing of business relations in Brazil.

– Petr & Vaclav

Monday’s take from Yuan-Che

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our second entry for Monday, 1/23 comes from Yuan-Che Cheng.

 

It was no surprise that traffic was awful in downtown Rio on Monday morning. Thanks to the traffic, I had more time to explore and record the sight of streets and the downtown Rio through my camera. On the way to Petrobras, I saw many stadiums and facilities under construction for the 2014 FIFA world cup in and 2016 Olympic game. In order to be the host of those international contests, Brazil is elevating its infrastructure to a whole new level. Although some constructions are still behind schedule, I think that Brazil will complete them amidst its booming economy. During the visit to Petrobras, I realized that even though Brazil has great natural resources, Brazil still faces many challenges. For example, improvements are needed in the condition of its roads, and Brazil needs better oil extraction technology. With that said, one can see that Brazil clearly has made great progress in last few years.

After the visiting of VIVA Rio, I finally figured out a question that had perplexed me in the beginning of the class. Why do Brazilian films keep broadcasting negative image about its own country and making people feel that Brazil is a dangerous and uncivilized country?  I think those videos or films are trying to provoke the government and the public to face those serious issues, because the authority has not put too much effort on resolving the crime or violence issues (or we can probably say the government does not have the ability or resource to deal with those problems). By broadcasting the situation in slums through media, it helps the government and people in the world realize the circumstances in slums, and consider providing help for these communities.

– Yuan-Che

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Viva Rio

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our entry for Monday, 1/23 comes from Nick Gaudiot.

Our day started with a trip to PetroBras, a Brazilian oil company. It was very interesting to see how much of the oil business PetroBras controlled and equally as intriguing was how they were very open about having been a government monopoly. PetroBras is currently by far one of Brazil’s biggest oil companies and definitely appears to be able to grow and improve its positioning in the global market with its findings of the pre-salt oil reserves.

Our group then moved on to get lunch at restaurant, where again we saw something that was different from the norm in the United States; people were at a buffet style restaurant and would pay by the weight of their plate. After our lunch we went for a stroll and saw PetroBras’s original building before it started to grow and had to expand to the larger building that we had our presentation at.

Next to the PetroBras building was the new Cathedral that was built to suit the culture of the Brazilian population. It was built with almost no gold or extravagancies to meet the more liberal leftist ideals of the Brazilian people in the 70’s. It also portrayed the image of the Virgin Mary as a woman of African descent which would better portray the people of the Brazilian culture. From this point we took the bus and were taken to the old town Rio de Janeiro, and saw the older buildings that had the strong European influence.

Our second half of the day took place at the NGO, Viva Rio. The company’s goal is to try to aid those in the poorer communities and help them become more productive and contributing members of society. They offer training and apprenticeship programs to help ensure that they people can give back to the community they live in. The company has received so much positive attention for its good work that it has been asked by the United Nations to help in the reconstruction of the downtrodden Haitian people.

From my point of view it sounded like this company could use some help in its financial management as the company did not appear to be very knowledgeable on where or how much of the money they received went directly to the aid of the people. After receiving a quick tour of the operations of the NGO building, we returned to our hotel. For dinner, Professor Murray suggested to us that we try the Garota de Ipanema, which is the restaurant were the girl from Ipanema was written. When we were at the restaurant, we got a chance to see some street performers perform Capoeira, a Brazilian fight dance. Getting to see the culture of Brazil really gives one an understanding of the way businesses and culture are deeply interconnected

– Nick

A View From Above

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our third entry for Sunday, 1/22 comes from Jess MacMillan.

Sunday here in Rio turned out to be a sunny and clear day with unlimited possibilities to take in the beauty of the city.  One way to get a bird’s eye view and enjoy a rare perspective of the city and beaches is to go to Pedra Bonita, and paraglide or hang-glide off of the 510m giant granite mountain. The flights depend on the weather and the wind conditions, but it is unavailable only a few days out of the month, and flights take place as usual on most days.

The sensation is amazing.  The sound of only air slipping off your sail is like silence, and in flight a man’s dream of flying like a bird comes true.  The cost is steep (about $210, with video), but because it will be a once in a life time experience, it is well worth expense.  The pilots are experienced and friendly.  Most having been flying for 10 years or more, and with a quick wave of the hand and a laugh, they quickly allay the fears of the risk ahead.  Once the initial take off is done, it is nothing but smooth sailing down to the beach.

(photo courtesy of Joe Melican)

The tourist experience is smooth and enjoyable; with only a closer look at the business model of the operation, one can see its resemblances to that of Brazil as a nation.  The operation of the service is very status orientated.  The owners of the sails fall into a very small and privileged class that actually have the capitol to afford the equipment.  The assisting help, the ones who “sherpa” the gliders from the cars to the launch pad, and then from the landing zone back to the cars, make an ok living, but will probably never be able to afford to pay for a trip to sail the sky on their own.

(photo courtesy of Joe Melican)

Sunday also offers a Hippie Fair, on the Square General Osório in Ipanema. It starts around 10am and goes on until the early evening. There you can find art, jewelry, shirts, bags, furniture, hammocks, food, and much more.  It is a nice inexpensive and enjoyable approach to getting your Rio De Janeiro memorabilia taken care of.

– Jess

Up In The Air

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our second entry for Sunday, 1/22 comes from Joe Melican.

Sunday was supposed to be our day off.  We could have slept in and spent the whole day relaxing on the beach. But NOT SO FAST!  A few of us decided to try out the local hang gliding and paragliding .  We were going to jump from a local mountain and then land on the beach.  It sounded like a good idea on Saturday when we talked about it, it still sounded like a good idea when I woke up on Sunday morning, and it continued to sound like a good idea when I arrived at the 
paragliding office on the beach.   As we drove up the hill it started to creep into my head that sleeping in would not have been such a bad idea.

We reached the top of the mountain.  The group consisted of Mindie, Chris, James, Jess, Nick, Kim and myself.   Jess and I were going to Paraglide and the rest were going to Hang Glide.  I watched as several Hang Gliders suited up and proceeded to run of the deck and soar away….simple enough.  Jess and I were doing the paragliding.  Our set up was like those toy army men attached to parachutes that you throw up in the air and ideally the chute opens and they float back to earth.  The problem is I remember often times the chute didn’t open and the army men crash to the ground.    Jess went before me.  He suited up, received some tips from his trainer and ran off the side of the cliff no problem!!  I watched him float around and eventually land on the beach far off in the distant.      The rest of the class had all taken off with no hitches.  It was now my turn to run off the side of this mountain and hope the chute inflated.  My trainer seemed very knowledgeable and did make me feel more at ease.  This was after all my first jump.

We suited up, went through some training and then ran off the side of the mountain!!!  We dipped down a little, my feet hit the top of the trees and then we took off!!  It was quite a rush.  We proceeded to maneuver up close to mountains and then over the ocean before gently dropping down softly on the grass.  It was an amazing ride that I would do again in a second.

In retrospect it was a great idea!!  The only thing missing was having my wife with me…..that would have made it a perfect day…maybe next year.

– Joe

A Brazilian Sunday

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our first entry for Sunday, 1/22 comes from Rob Ruiz.

Sunday = leisure. Sunday, in Rio de Janeiro, in the Summer, on a 90 degree day … now that’s a whole different kind of leisure.

For the first time on our trip I was able to sleep in a bit – until about 10 am – much needed after enjoying the incredible Rio Scenarium bar until about 4 am the night before!  Since a handful of my other classmates started their days bright and early paragliding / hang gliding, I had the opportunity to spend a portion of the day on my own to try and immerse myself in to Rio and it’s beach culture. With that in mind, I figured I had to make sure to do a few “local” things.

1. Walk – Everyone here walks.
2. Start the day off right with a fresh coconut juice – This happens to be a really effective way to cure “dehydration.”
3. Check out some local beach sports – Volleyball, Foot Volleyball, Sand Futbol, etc.

So, with that in mind, I headed towards the part of the beach that our tour guide, Pablo, had mentioned was where the best foot volleyball is played. On Sundays, the city closes the main street near the beach for pedestrians, cyclists and others to use. So there I was, leisurely strolling along the beach, in the middle lane of the street, with a coconut in hand watching some crazy foot volleyball at 11 am. Awesome.

My feet then led me further down the beach and ultimately a bit inland to the “Hippie Market” where I was able to find some souvenirs for folks back home and engage in some healthy bartering with the vendors.  Between my Spanish and some key Brazilian hand gestures that I’ve picked up the last week, I was able to score a couple of deals.

Eventually, I ran into a classmate of mine and we headed back to our hotel, walking some more and taking our time to stop and try some more local food and drinks. It was great, and I really enjoyed seeing the people of Rio enjoy a summer day as only they can.

– Rob

Tamara’s Take

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our second entry for Friday, 1/20 comes from Tamara Stone.

 

Today was an early start for us as it was our transfer day from Sao Paulo to Rio de Janeiro.  On our way we had a corporate visit at BASF – The Chemical Company in Guaratingueta. Our presenter was Willi Nass, who is the Vice President at this site.  BASF was founded in 1865 and is headquartered in Germany; their market segments include chemicals, plastics, functional solutions, performance products, agricultural and oil & gas.  One of their products is the blue jean pigment that is used by many jean companies.  Their customers include Natura, who we visited yesterday and they also work with UNICA another previous visit.  In their presentation, BASF talked a lot about sustainability, such as collection of used fertilizer packages so that they could dispose of them properly.  BASF owns 382 hectares of land that the plant sits upon, but BASF has turned 188 of those hectares into a reforestation and preservation project.

Mr. Nass also talked about the new strategy for 2012 and beyond:  “We create chemistry”.  The macroeconomics that they see as driving their strategy are the growing & aging population, urbanization, climate protection and globalization & emerging markets.  All in all the presentation was very informative.  Afterwards we took a tour in our bus of the facility and we saw the holding pools, chemical plants and other areas.  The chemist who gave us the tour told us that they meet with the community once a month to talk about and assure them of the safety of the plant, which reminded me of the movie Erin Brockovich.

From there we continued our journey to Rio.  About an hour later we stopped at a truck stop to have a buffet lunch that included many different Brazilian items.  After another three hours or so we were driving by Christ the Redeemer and pulling up to our hotel on the beach in Leblon.  After a quick clean up we headed out in groups to explore the area and find food on the surrounding streets.  My group ended up at Casa Clipper a local hang out with cheap local food.  All in all a good first night in Rio.

– Tamara