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e agencies are available for government incentive programs. In addition to contacting local agencies it is important to note that a wide range of credit and financing options are available to investors through both foreign and domestic banks operating in Brazil. Finally, foreign investors are expected to import the funds for all major fixed capital requirements.

Cultural and Environmental Conditions

Personal contact is more important in business than other forms of communications (i.e. telephone or mail). This is largely because the working relationships in Brazil are built on trust.

The most common form of doing business in Brazil is through incorporated subsidiaries; branches are very difficult to operate. Joint ventures do not require a local Brazilian partner, however, it is still encouraged.

It is essential to establish a network of connections with the public sector in Brazil. The culture in Brazil relies heavily on favors and ‘who you know'. These connections are important, but it is important to remember that these connections can, and will, change.

Lastly, be prepared to negotiate on prices! Do not expect sales to occur quickly, and keep your best price till last.

People

IKEA has a company philosophy to create a better life for its customers, as well as its co-workers. This has significantly influenced the company's workplace environment. IKEA received the Family Champion award and is recognized as a great place to work here in America. IKEA empowers their coworkers and respects their personal lives. This has had a tremendous influence on job productivity, growth and development, which ultimately benefits the customer. The IKEA workplace includes many benefits and family friendly initiatives to support co-workers needs. In 2002, IKEA saw a 26% decrease in sales staff turnover. In addition, women represent more than 48% in management positions and are 47% of the company's top earners.

This provides a proper fit for both IKEA and the Brazilian workforce. Brazil is a nation in which the richest 20 percent of the people receive 64 percent of the national income. It is a nation in which 40 percent of the people live on the equivalent of $2 US a day and over 20 percent live on the equivalent of $1 US a day. In May 2003 unemployment was up to 12.8%-it highest level in 14 months. For those that did work, the average wages in May 2003 fell to $290 US, 15% lower than a year earlier. However, the Brazilian workforce is renewing. The job market is very attractive to the ages of 25 to 39 years old. Brazilian women are making up a larger portion of the workforce. In 1970, only 18.5 percent of Brazilian women worked outside the home. This has since rose to 51 percent of the Brazilian workforce. The number of High School graduates has also risen from 35 percent in 1994 to 43 percent currently.

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