International Business
After a poor year, Compsis are deciding whether to expand their operations to other countries due to uncertainty and limitations in the Brazilian market. The firm have identified 3 possible solutions: expand into Latin America, the USA or to remain in Brazil. In 2004, revenue fell by $0.9 million, overall revenues in Brazil will rise to 70 million next year. Compsis have a high market share in Brazil (39%) but the CEO Ailton believes that expanding internationally will ensure financial success. In Latin America, the market is small but rapidly growing, which could generate Compsis revenue in future if they could outsource their business here. However, the market seems to have varied projected overall revenues in the future. Customers are very price sensitive and are unlikely to pay for Compsis high-end technology software.
The US market, appears to be rewarding and I believe this to be the most suitable option for Compsis. Overall revenues grow year on year and the market is steadily growing and therefore should Compsis successfully establish themselves, they will most likely experience great financial success in the long term. The majority of projects in the US require Request for Approvals (RFPs) to ensure fair competition amongst the firms wanting the project. Unlike the Latin America market, US customers are also not as price sensitive as they only weight 15% of their decision making process on cost. Compsis also have a competitive advantage being one of few companies offering auditing and financial services as part of their product thus this USP would enable them to win a potential contract over US rivals and ensure long term financial success. On the other hand, the USA market has massive domestic competition; companies such as Transcore have an established name in all segments of the ETC market, so this is potentially one constraint that will affect Compsis venture. To implement this plan, Compsis must find a local partner firm who