Colep in the Brazil market : market growth versus declining competitive advantage

Abstract

The thesis that is hereby presented in the form of a case study aims to highlight the challenges that a Portuguese company, Colep, faces upon setting its operations in the Brazilian market. The case serves as a teaching instrument, since it allows students to apply the strategic frameworks they learn in class to a practical situation. Colep Portugal – Embalagens e Enchimentos, S.A. is a contract manufacturing company that specializes in producing and filling, not only but mostly, aerosol products for major companies such as Unilever, Procter & Gamble and Beiersdorf. Following its expansion strategy, Colep decided to enter the Brazilian market through a local join venture to take advantage of several local opportunities, such as market growth, increasing levels of consumption and disposable income. The company would also become closer to its clients, offering real-time solutions, with shorter leadtimes. However, the Brazilian market has shown several constraints at different levels, which vary from supply shortages to infrastructure limitations, tax burden and increasing input costs. The case is based on a real life situation of a company’s internationalization process. It’s mainly focused on the analysis of the strengths and weaknesses of the Brazilian, namely the declining levels of competitiveness of the latter, and its resolution will revolve around the advantages and disadvantages for Colep that derive from developing its operations in this particular market.