Yamato Corporation wants to enter the Brazilian market by selling electronic scales. To be successful, they must understand Brazilian business culture which values personal relationships over transactions. Yamato should establish local partnerships and visit Brazil in person to build trust. Additionally, Yamato needs to meet Brazil's regulatory standards for imported goods and consider establishing local production to avoid import duties and taxes of up to 26%. Attending industry trade shows in 2009 would help Yamato connect with potential customers in Brazil's important beef and poultry industries.

1. Justin Newberry
MGT 328
Professor Flores
Case Study 5:
Market Entry
Brazil & Yamato Corporation
How to Do Business in Brazil
First of all for Yamato Corporation, they must consider that business in Brazil is highly
based on personal relationships and connections. In many cases in forming new contacts in the
United States you might be able to walk up to a new business, introduce yourself and the
corporation you represent, and negotiate a new business relationship. For example, imagine that
Yamato wanted to establish a new client and sell some electronic scales to a new buyer in the
United States. In order for this to happen, either Yamato or the buyer would typically approach the
other directly without having previously known one another. Furthermore, since it is a domestic
deal (which naturally will reduce the perceived risk on behalf of both parties) and the business
culture is less hung up on developing and maintaining personal relationships, both parties will
most likely be willing to go forth in the deal, perhaps getting caught up only on financial
intricacies. In Brazil, however, strong emphasis and preference is placed on deals that promote
strong personal relationships and connections. It is strongly recommended in order to facilitate
international deals in Brazil, Yamato contact an intermediary (an agent) to contact the hopeful
business partner and also travel down to Brazil and spend time developing and personally
maintaining relationships and even friendships with these proposed business partners.
Furthermore, it is recommended that they consider, at least to begin, a local partner to fulfill a
substantial role in the deal or future business proposition in the form of a local office (Foreign
Direct Investment [FDI]) or a joint venture. Upon demonstrating a high level of interest in
involving local partners, culture, and opinion, Yamato will realize significant returns in the bottom

2. line. Furthermore, it is of utter importance that Yamato develop and maintain these relationships
through one-on-one meetings face to face in Brazil. Although it is tempting and undoubtedly
cheaper to take advantage of modern technology to facilitate deals and relationships and quite
common to employ in the United States, Brazilians will appreciate and enjoy a face-to-face
personal encounter to facilitate deals and develop a friendship with the company. Moreover with
these personal contacts and partners in Brazil, Yamato will have the essential resources it needs in
order to facilitate deals and work out difficulties with tariffs and import restrictions upon dealing
with the Brazilian government, as the Brazilian government will look favorably upon the
involvement of the local partner.
Technical Requirements to Import Scales in Brazil
Upon entering Brazil with their product, they will have to go through a series of technical
inspections to verify conformance to standards in quality and safety necessary for the Brazilian
economy to thrive. The government department that deals with this is called Inmetro (the National
Institute of Metrology, Nominalization and Industrial Quality). All standards and specifications
that must be met are set and maintained by Inmetro and upon entering Brazil with their electronic
meat scales, Yamato must have one of Inmetro’s authorized delegates thoroughly inspect the
scales. The inspection consists of the approval of the compliance model, visual examination, tests
for measurement, flagging of check marks and seals, and a certificate of examination upon
approval or disapproval.
Main Competitors and Local Weight Scale Manufacturers
There are various international competitors in the weight scale industry. One major
company that Yamato Corporation has to worry about is Aviar, Incorporated. Aviar is from the
United States and is well known for manufacturing traffic control equipment and scales used in

3. truck weighing facilities. Out of India, Transweigh Limited produces weighing controls, weighing
conveyors, and weight measuring equipment. Also out of India and a much larger scale company,
Citizen Scales manufactures electronic scales, medical scales and various other types of scales and
balances for export worldwide. Scaletech Corporation out of the United States, manufactures
various types of electronic scales and measuring devices, and is looking to begin exporting. A
final and very significant competitor that Yamato should be aware of is A-1 Scale Service out of
the United States. A-1 Scale Service specifically manufactures meat scales and subsequently
would seem to be a significant competitor upon entering the Brazilian market. There doesn’t seem
to be significant Brazilian presence in the manufacturing of commercial and industrial electronic
scales, so entry into the Brazilian market seems that it will be generally accepted to meet demand
in the country.
Most Important Regions in Brazil’s Beef and Poultry Industry
Brazil has one of the most important beef industries in the world, and their poultry industry
is also rapidly on the rise. The cattle industry is heavily predominant in the central states of Mato
Grosso, Mato Grosso do Sul, Goiás, and Minas. The poultry industry in Brazil is predominantly
concentrated in the southern regions.
Main Beef and Poultry Fairs for 2009
One of the best ways for Yamato to enter into the Brazilian market is by attending a trade
show and getting their digital scales exposed to potential buyers. Some of the most promising
trade fairs that could potentially pay off huge for Yamato in 2009 are as follows: Bahia Farm
Show (Agricultural technology and business) – June 2-6, Feicorte (Meat production chain and
exhibition of cattle breeds) – June 16-20, Expoagro (Agricultural exhibition in Mato Grosso [a big

4. cattle state]) – July 2-12, Ave Expo 2009 (International Poultry exhibition) – August 19-21,
Technocarne (Technology and the processing of meat) – August 25-27.
Import Requirements and Duties
To import into Brazil, Yamato will have to pay an Industrial Product Tax between 5 and 15
percent. They will also have to pay a miscellaneous tax of 1 percent. Additionally they will also
have to pay a Social Security tax of approximately 10 percent. In summary, therefore, Yamato
will be looking at paying import duties of around 16 and 26 percent value of the scales they
import.
Conclusions on Market Entry Strategy
After my market research, I have concluded that the best entry strategy into Brazil for
Yamato Corporation is by setting up operations in Brazil (Foreign Direct Investment). There are
many benefits in this situation for Yamato to establish operations in Brazil, the first of which
include cultural and language benefits if Yamato decides to hire with a polycentric (hiring locals
for local positions and keeping key higher positions in parent country staffed by parent country
nationals) or geocentric approach (finding the best people to staff the right jobs and strategically
placing them around the world in the organization). This is beneficial because the firm will not
suffer from cultural myopia (when a business does not understand the scope of the cultural
environment to which they are marketing their product). Although a fully geocentric approach
may not be feasible due to immigration restrictions in the countries Yamato operates, opening
operations in Brazil and hiring locals will give Yamato the tools and cultural knowledge it needs to
avoid cultural myopia and better serve and understand the Brazilian market’s needs. Furthermore
with local operations in Brazil, the local and federal governments will be much more welcoming
since Yamato will create jobs for Brazilians. Usually governments will offer tax breaks to attract

5. such companies to do so in their borders, so it would be beneficial for Yamato to look into the tax
and other benefits the government is willing to offer them for investing in Brazil. Moreover,
without having to export into Brazil, Yamato will not have to face duties of up to 26% that they
would have had to if they had chosen to export to Brazil. Being ISO 9002 and ISO 9001 2000 at
the production facility in Akashi, Japan will mean that Yamato has substantial quality standards
and if transferred and implemented correctly in Brazil as well, Yamato will not have much to
worry about in terms of meeting the technical and quality requirements of Inmetro in Brazil. In
order for this to happen, however, upon setting up operations in Brazil Yamato must apply some
turn-key concepts and transfer some supervising personnel from the Akashi plant to the new plant
in Brazil to educate the new workforce on the quality practices employed by Yamato. With all
these strategy factors considered, Yamato should be able to successfully and profitably enter the
Brazilian market as well as compete effectively against all other competitors in this market.