Full Service Travel in Brazil

Explore the World LLC

Team C:

MGMT 598 International Business

Professor Wendy Finlay

December 15, 2013

Table of Contents
1.0 Executive Summary 3
2.0 Country Factors 3
2.1 Political and Legal 4
2.2 Economic 4
2.3 Cultural 5
3.0 Competition 6
4.0 Market Opportunity 9
5.0 SWOT Analysis: Implications 12
5.1 Strengths 12
5.2 Weaknesses 14
5.3 Opportunities 15
5.4 Threats 16
6.0 Business Objectives 16
7.0 Strategic Thrust 17
8.0 Tactics 19
8.1 Human Resources 19
8.1.1 Recruiting and Staffing 19
8.1.2 Training and Development 20
8.1.3 Performance Management 21
8.1.4 Compensation & Rewards 21
8.2 Financial Risks 22
8.3 Products and Services 23
8.4 Pricing 24
8.5 Promotion 25
8.6 Distribution 27
9.0 Measurement of Results 28

Global Business Strategy: Full Service Travel in Brazil
1.0 Executive Summary
Explore the World LLC desires to create a concierge, high-end travel agency/experience in Brazil. Our new office will be located in a place yet to be determined in Brazil and we are thinking of transportation, accommodations, private guided tours, cultural lessons, and language lessons. Essentially, the business plans to make the experience more than just seeing the sights, but experiencing the culture and lifestyle as a whole. This service can be used by both business and vacation travelers. In addition to direct personal service we will have a website to allow people to survey our offerings as well as a mobile app. Many of our services can be accessed electronically (etiquette videos, language lesson videos, photo galleries, cooking classes). These services would be available for purchase and can be accessed prior to arrival, or in flight, for those that cannot work the experience into their schedule but still want the benefit of the information.
With Brazil cited as one of the fastest growing countries, chosen as the location for the upcoming World Cup and Olympics, and possessing a skilled workforce, the country is a strategic choice in expanding Explore the World LLC globally. Additionally, the projections for global business travel to increase significantly over the next five years coupled with the fact that Brazil is the largest travel market in Latin America indicate strategic timing for Explore the World LLC. Our initial revenue target is $2M with a plan to increase revenues to $10M in the first 5 years.
2.0 Country Factors
The decision to expand business to international locations requires careful evaluation of the target country or countries prior to launch. The evaluation should include political, legal, economic, and cultural factors as all of these factors have impacts on performing business in a country. This section outlines the country factors for launching the full service travel business in Brazil.
2.1 Political and Legal
As we consider launching the full service travel business, we cannot ignore the fact that the very reason for selecting Brazil; the World Cup and Olympics, has also caused political uproar in the country. Recent media attention surrounding politics in Brazil has centered on the citizen frustration with rising costs and mismanagement of funds slated for the upcoming World Cup and Olympics. As a result of these concerns, Brazil’s President has faced increased scrutiny and ratings impacts that first plummeted but have since improved. According to author, Argolis, the ratings for President Dilma Rousseff have rebounded most recently. Argolis attributes this rebound to the slowdown of protests as well as attention shift to Edward Snowden when some of the findings included phone calls and emails from President Rousseff and Brazilian companies. The concern for spying and President Rousseff’s response quickly overshadowed the previous concerns.
Within Brazil, Rousseff has had to implement policies and measures to combat corruption. Corruption scandals include government officials’ mismanagement of project funds. Fortunately, Rousseff acted quickly to address these issues, introducing new laws and demonstrating a commitment to reducing the corruption.
2.2 Economic
Despite the local discontent, Brazil is clearly a country with many opportunities as it prepares to host the World Cup in 2014 and the Summer Olympics in 2016. According to authors, Lynn, Wang, and Mehlum, Brazil is expected to be one of the world’s fastest growing economies over the next several decades, citing the country as the fifth largest economy by 2050. They attribute these projections to the country’s natural resources, skilled labor pools, growing productivity and high investment rates. Although Brazil has not been as quick as other countries to open its trade market, they are quickly lifting the barriers to trade that will have positive impacts on the economy.
Unfortunately for Brazil, the economic promise does not come without issues. Protests began in June in response to an increase in public transportation prices and expanded to cover concerns over government corruption. Brazilian citizens feel strongly that the money being used for city improvement projects in anticipation of the World Cup and Olympics should be going toward education and health funds.
2.3 Cultural
Physical contact is a critical element of communication in Brazil. According to the article Going Global, Inc. (2007), visitors should not be alarmed by the enthusiastic handshake or touching that may take place during general conversations as it is simply the nature of Brazilians. Brazilians are also very proud of their culture and enthusiastic about sharing the culture and customs with visitors.
Interestingly enough, idle chatter is common in the workplace and considered a way to build trust in the Brazilian culture. The work environment includes open floor plans and desk spaces encouraging conversation with all levels of employees. Although only the most senior leaders have offices, they rarely close their doors and employees feel welcome to enter and exit the offices as needed. It is not uncommon for managers to have lunch with the members of their teams and discuss both work and personal matters. Brazilian employees are accustomed long work days, beginning at 8am and often not leaving before 6pm though they rarely will work on the weekend. Employees work very hard to meet deadlines and will often stay later if necessary.
Because the cost of college is so expensive in Brazil, it is common for students to begin working while still in their degree program. Larger companies are known for offering well-structured trainee programs that lead to career opportunities making the competition very strong amongst students and trainees. Language is a key skill for Brazilian professionals and most have a solid grasp of English. Foreign companies launching business in Brazil can expect a good selection of skilled, experienced candidates accustomed to working in technologically savvy environments.
3.0 Competition
Indirect competition can come in many forms. Airlines, hotels and cruise lines will be a few types of competitors. Online sites like Yahoo Travel, Orbitz and Priceline are companies that we will have to build a strategy to overcome. These companies currently make online and office visits available for booking travel to Brazil. Individually these all touch the areas and could be a concern. What is going to be slightly more problematic is the recent trend for these travel groups to start to work together in partnering relationships. Now it is easy for Delta to also connect with Holiday Inn to provide more a complete package for travel. They are very strong, connected, heavily advertised and have been in the business and market for quite some time. One weakness is that they are limited to the physical travel portion; they are “getting and staying there” type businesses. Even the vacation packages these companies provide usually do not include the concierge or cultural learning opportunities our company will embrace.
Some of the more direct competitors will be companies like Travel Store, Lonely Plant and Thomas Cook. These companies are well established and offer wonderful and extravagant travel. First class travel and accommodations are easily had. And most of them also offer exclusive tours of select attractions. What is still hard to find and where our business will exceed expectations is the additional cultural learning. Certainly we will be offering exquisite travel and entertainment and will have to create experiences that are similar to what these groups offer already. That will be merely one part of our business. But the enhancement to include one on one tours, language learning, and importance of historical and cultural changes will allow us to open up to a slightly newer, more advanced consumer while working with existing high end and business executive travelers.
One type of competition that will be very difficult to overcome will come from companies that have started their travel options locally in Brazil and have more recently been able to take advantage of the internet and international marketing. There are a few companies that are very well established in Brazil like Sabrina Brazil Travel (Sabrina Brazil Travel). These companies have a nice, well-established relationship with the government and local areas. This is the type of service we will be competing with on a very direct head-to-head basis.
In general the majority of the competition, both direct and indirect has the same relationship with both the government and the culture. Today there is very open travel and large amounts of business travel is being generated by vacationers and the like. The government recognizes that there are wonderful sites in this country and use them to create wealth. The Amazon, Rio, the coastal areas and the famous Christ the Redeemer statue as one of the seven wonders of the world; have helped both the government and population as a whole accept and embrace tourism. The area of concern would be the “Favela’s” (Gallego, Sonja 2/20/2008) or slum areas. As in any major city there are areas to be aware of. And culturally even these spots are a little more patient with tourists than locals.
Most of the competition is very large in terms of how they operate. They are mega businesses that look to make a small profit and a large volume of sales and people. Our operation will be smaller and therefore could possibly be under the radar screen of many of the large direct and indirect companies. Again the smaller regional businesses that have been in areas of Brazil and are currently expanding will be the competition we will see some response to our penetration. Over 5.5 million people visit Brazil each year (Brazil - International tourism (2011). And with the coming World Cup and Olympics that will only increase. (Arauja, Madson (n.d.) Basically, the market for travel is so large that our penetration is not likely to be noticed or blocked with hostility.
Most of the competition has its strength in brand recognition and ease of travel arrangements. Everyone has heard of and most likely uses online sites like Orbitz and Priceline. They are fast, efficient and provide a good source of travel deals. More recently they have added vacation planning as well to tie everything together. Certainly people are aware of standard box travel agencies. They also are relatively well known and can offer services for travel and sightseeing and add-ons. Then we get to the large airlines such as Delta, US Air and American who are well known and offer travel to Brazil. Most travelers recognize these name brands and would connect through them and hotels they partner with.
One weakness of these competitors is that they are focused on the dollar/volume part of the sale. What they don’t offer are the local spots, the cultural activities, the learning and living with locals. There is very little personal interaction reducing the ability to provide cultural building blocks. We would partner and offer customer stays with hostels and families wanting to open their home to travelers. In this way we will be building personal experiences for each individual or small group. Again the main concern will be with the smaller, local Brazilian travel sites that know the areas well and might be able to provide this service. We will be duplicating some of what they provide, however we will be doing it from a different part of the country using our current resources and contacts to attract a more international and wider range of travelers
4.0 Market Opportunity
The timing couldn’t be better to tap into this growing market. Not only does the Global Business Travel Association report August 5, 2013, that a “Study Finds Business Travel Spending to Grow Globally: Economic Shifts Are Fundamentally Reshaping the Business Travel Landscape” and claims that “Asia Pacific Region to Dominate as Emerging Markets Worldwide Play an Increasingly Pivotal Role in the Business Travel Industry - Report Ranks Top 15 Countries by Business Travel Spend ” but specifically identifies Brazil to be trending as one of the top anticipated growth markets in the coming years amongst the 75 included countries in the study. (GBTA, 2013)
“Travel is indispensable to trade, commerce and business expansion in a global economy,” said Michael W. McCormick, GBTA executive director and COO. “This report shows that new opportunities are opening up in markets around the world for companies willing to invest in business travel to drive growth. It also serves as yet another wake-up call for the U.S. and Europe to improve aging infrastructure, establish fiscal order and stay competitive, because emerging economies are increasingly focused on meeting their own fast-growing business travel needs.” (GBTA, 2013)
They also report that “in the wake of a lopsided economic recovery – with stalled growth in the developed world but economic expansion approaching or exceeding double digits in many emerging economies – the business travel landscape is set to change significantly over the next five years. Rapidly growing markets like China, India and Brazil are in prime position to become major global players in business travel.” In 2012 Latin American business travel totaled $49 billion and Brazil is the largest travel market in all of Latin America claiming $30 billion of the $49 billion alone. In the next five years total Brazilian business travel spending is expected to increase 7.3% on average making it the 6th largest travel market in 2014 passing the likes of France and Italy with expectations to reach $45 billion by 2017. Although 7.3% is the expected average it will not be constant with a spike in growth to occur in 2013 and 2014 with numbers to be 14.2% and 15.9% in growth respectively. From there on through 2017 travel is still anticipated to continue to grow beyond that jump in market share so that is a positive thing. (GBTA, 2013)

The following is another chart showing the business travel market spending activity in the top 15 markets in 2012 v 2011 with Brazil black boarding the second highest growth to China at 9.3%. (GBTA, 2013)
Top 15 Business Travel Markets The GBTA report also identified the top 15 business travel markets, ranked by spending in 2012. (GBTA, 2013)

Between the anticipated rise in business travel as well as the upcoming 2014 FIFA World Cup and the 2016 Olympics being hosted in Rio de Janeiro, Brazil is receiving special funding and is putting the effort into improving their infrastructure, safety, and overall general appeal to accommodate visitors of all kinds. Brazil is preparing to receive 7 million visitors by 2014. (Euromonitor International, 2013)
The average length of a luxury vacation is reported to be 10 days, which echoes the overall pattern in all sectors
of tourism. Approximately 48% of high-end customers take four trips a year on average; 20% travel more than four times. Frequency is higher for short-haul trips than for long-haul travel. Roughly 75% of customers are reported to travel on long-haul vacations once or twice a year, whereas 33% take short-haul vacations three to four times a year. Their survey findings indicate that 60% of luxury buyers cite business class as their customers’ preference for short-haul vacations and 75% for long-haul vacations. These figures demonstrate that business class is by far the most popular class for both types of travel. It is also worth noting that the longer the flight, the higher the level of comfort and quality required. Regardless of the length of stay, the average price paid per trip per customer is reported to be in the range of US$5,000 to $10,000 for 41% of travellers; US$20,000 to $30,000 for 12%; and US$30,000+ for 10%. In Brazil, beyond the classic image of Rio and Búzios, luxury beach resorts are emerging, often with an eco-tourism flavour, on the north coast of Bahia (Trancoso and Fernando de Noronha). Looking ahead, Natal’s strategic geographical location and miles of unspoiled beaches will soon make it a leading region for luxury beach vacations. (Horwath HTL, 2011)
According to "Internet & Media 101" from September 2012, Barclays Capital: Online travel sales growth worldwide, 2010-2016 (% of change): - 2010: 10%
- 2011: 10%
- 2012: 10%
- 2013: 9%
- 2014: 9%
- 2015: 8%
- 2016: 8%

Online travel sales growth by region (2010 and 2016):
- Latin America:33% in 2010, falling to 18% by 2016. (ETC, 2013)
5.0 SWOT Analysis: Implications
5.1 Strengths
While there are many other travel agencies and other tourism related businesses serving Brazil and the surrounding areas, our company stands out in many ways. Explore the World LLC offers an array of services from cultural and cooking lessons to translation, guide and full-service personal concierge services. We take the stress out of trying to figure what kind of etiquette should be exercised, by whom and when with our cultural lessons which are even available via smartphone application so people can take the lessons while travelling to their destination and they will be fresh in their mind. We provide a full menu of dishes popular in Brazil along with a list of ingredients so travelers can ensure that neither they nor any travel companions will encounter foods they are allergic to. Included with this menu are cooking instructions if visitors should want to try a dish before they go to an expensive restaurant and pay for something they may possibly not like or learn to prepare the dishes they loved the most while on their trip after they arrive back home. Other services include language lessons, which we have partnered up with Rosetta Stone to provide specific translations for those travelers who do not wish or do not have time to learn the language. All the previously mentioned services are available via smartphone application purchase and can be purchased separately or with a customized package from Explore the World LLC.
Our partnership with Rosetta Stone provides us with the unique opportunity to provide language lessons for a cost lower than our competitors and coupled with other partnerships we have enabling us to provide high quality applications, we have many unique selling propositions that are easy for our customers to see. The one thing we do better than our competition beyond the shadow of a doubt is to provide a complete cultural experience, not just a simple vacation and we do it at a competitive price. Our packages are completely customizable from length of time to variety of services. We have representatives available 24 hours a day to help current and potential customers design the package that works best for them based on what experiences they seek and their financial situation.
Another major strength Explore the World LLC is taking advantage of as we enter the Brazilian travel and tourism market is the upcoming 2014 World Cup. Major promotions have taken place this year including pushes to attract more Japanese, North American and Russian tourists up to and including the Japan Association of Travel Agents showcase that took place in Tokyo. These are important markets to tap as approximately 1.8 billion Brazilians are of Japanese descent, Russians are placed as the fifth largest spenders according to the World Tourism authority and United States citizens account for 11% of travelers to Brazil based on a 2012 study. So in addition to having the “sun, sea and sand” many tourists look for during vacation time, we have a major world event to help us start our expansion off with a bang (Merco Press, 2013).
With 985 days left until the 2016 Olympics, we are also looking forward to servicing a monumental number of consumers who want to attend the games. Rio de Janeiro is putting a great deal of effort into celebrating the upcoming event, which will be the first time the Olympics have been held in a South American country (Merco Press, 2013). 2016 Executive Director of Sport & Paralympic Integration Agberto Guimarães has says “Each of these 4,000 athletes will spread this engagement through their schoolmates, teachers, friends and family. Celebrating the 1,000 days to go milestone during the competition in Belém means touching the whole country with the spirit and magic of the Rio 2016 Olympic Games” (Ferro, 2013). With all the free advertising that has already begun making Rio even more of a hotspot in upcoming years, we anticipate having no shortage of potential customers while having to put very little effort and financial investment into attracting them.
5.2 Weaknesses
One weakness we are looking into is the matter concerning Brazil’s outdated airports and transportation systems. Obviously to provide great travel experiences for our clients, we need to have access to multiple forms of transportation that are safe and modern. Galeão Airport will be one of our main concerns as it is the second busiest airport in Brazil and remains severely out dated as it has been under government control. Recently, however, an auction was held to sell 51% of the airport to a private investor so that they would assist in taking up the responsibility of updating the airport, especially before the 2014 World Cup visitors begin to arrive. Bids were taken up until November 18, 2013, and included at least five potentials, each of which has a foreign partner to assist (Erquicia, 2013). We will be keeping a close eye on the results of any and all auctions Brazil’s government initiates that will have an impact on the South American tourism industry. We are hopeful that the recent auction of Rio’s airport will go well and the end result will enable us to ensure a good travel experience for our clientele.
Another issue involving travel that could be considered a potential weakness for Explore the World LLC is the congestion in Brazil, particularly in the area of the airports (Leahy, 2012). Brazil has the fourth largest urban population with an annual growth rate of 1.8% which increases the need for rapid housing and transportation growth. Fortunately officials have started looking into solutions and with public transportation efforts coupled with the auctions to private companies, conditions are expected to improve over time (UNEP, 2009).
5.3 Opportunities
There are many opportunities for Explore the World LLC in Brazil. Brazil is one of the top 25 most popular places to travel according to trip advisor (Tripadvisor, 2013). With some of the world’s most beautiful beaches and views, Explore the World LLC can help create the vacation of a lifetime. A major opportunity for Explore the World LLC is that we offer a one stop shop; we can help plan your entire vacation, make recommendations, and even offer guided tours if needed. A major opportunity for Brazil will be the 2014 world cup. The world cup is set to bring R$25 billion (Whibley, 2013). Also another great opportunity will be the 2016 Olympics. Brazil will host two of the world’s largest events in the span of 2 years.
Explore the World LLC will continue to have great opportunities within Brazil because it is a nation that is rising up from the economic depression that everyone faced. As a travel agency, Explore the World LLC will have the opportunity to partner with some of the major landmarks and tourist venues to offer exclusive opportunities only available to those who use Explore the World LLC as their preferred agency. Explore the World LLC also needs to partner with local transportation companies who provide different types of services (limo, shuttle, private, etc.). While Explore the World LLC is already highly competitive, we stand apart due to the fact that we also give them all the tools right there on their mobile devices.
5.4 Threats
There are several threats to Explore the World LLC, as we are competing within a country that has high corruption and crime. This can be one of our largest threats because people will be afraid to travel simply because they are afraid of something happening. Also Explore the World LLC will be competing with all the other agencies in Brazil. Once the other agencies start realizing the success of Explore the World LLC, they also will develop a program that will mimic what is offered.
Currently the major threats of agencies in Brazil are the online agencies such as Travelocity or Tripadvisor, because they offer you to book everything from flight to entertainment all with the click of a button. Explore the World LLC has to remain competitive with services and making sure that everything is convenient enough for the client.
Explore the World LLC will have to remain current with all the major trends and current technologies in order to have the competitive advantage on all the competition.
6.0 Business Objectives
Our objectives are to increase revenues and increase our overall market share. We will be able to achieve these goals by building on our brand and developing a new brand loyalty for the Brazilian travel market to our current clientele and new clientele. Total travel revenue in Brazil was earlier stated as $30B per year with an anticipated increase to $45B per year by 2017 (Tourism Review 2013). This rapid growth is an opportune time to enter the market.

Recall that we are looking into the full service/concierge type travel so our market share will be small. Today the top 2 travel agencies in Brazil, CVC Brazil and Decolar account for 11% of the market. Based on this information we are planning initial revenue of $2M increasing to $10M in the first 5 years. Decolar maintains a low profit margin to attract volume and reduce customer costs while CVC returns about 3% profit (Jelmayer 2013). Based on this local data and our history we will be targeting 2% profit on our sales revenue generating a 5th year profit of $200K.
An additional measure and growth are will be brand recognition. We have been able to leverage our brand to our current customers, countries and travel firms as high-end travel. We will need to build upon this branding with our current market and also start to build and penetrate the Brazilian market. Both the people of Brazil and travelers to Brazil will come to see Explore the World LLC as “THE” travel partner for the true rich Brazil experience. This is best built buy repetition. Having our clients use us more often could be aided by offering a wide variety of shorter trips.
7.0 Strategic Thrust
Explore the World LLC will be embarking in 2 strategic areas. One will be new and related products in an existing market and the other new and related products to a slightly newer market. We obviously will be adding the Brazil experience to our current portfolio of offers. Additionally we will have some carry over into local Brazilians. Most of our sales and marketing will be carried out by using the internet. Everyone today uses the internet to either investigate their plans or to finalize all their travel needs. In either case we will be relying on internet capabilities as our primary communication and production method.

One method to move forward will be engaging in strategic alliances with other operators. Our company will research and find local resources to help deliver the rich cultural experiences our customers have come to expect. As Rosetta Stone is one partnership, others will be set up with traditional hotels for overnight arrangements, local bed and breakfasts for food and comfort, independent drivers and tour guides with local knowledge. These activities will be coordinated by working closely with our group and setting up very attractive partnerships that help our company, help the local businesses and ultimately deliver an exceptional customer experience.

Initially we will have some costs that should be considered sunk and capital. We will have to personally travel and find the proper local businesses to work with. Additionally there will be some advertising costs we will have to undertake, both locally in Brazil and then concurrently with our existing market to ensure proper exposure. Certainly working with local and small businesses we will assume some risk. Risks will be the smaller businesses could be booked up at the time our clients would like to use the service. Pricing changes and closures could also be a problem. Pricing could be managed as an add-on passed through to our customers and having a larger vendor base can provide some flexibility for a company being sold out or closed. The benefits of this process are truly the rewarding experience for our customers. Since we have home picked and basically home grown our own contacts, we will be working together as a smaller family run business with contract and incentives to help both companies.

A second approach we will use to help penetrate and gain market entry in Brazil will be to form some Joint Venture (JV) alliances. JV’s are a great way to start out in a new, foreign market. The risk is shared and the benefits can be enjoyed by both companies. There are some small local operations that cater to people who wish to visit Favela’s or slums. As there are operators in these districts we can JV with them to expand their business and to open our doors. This will be acceptable and interesting to both international travelers and Brazilians looking to experience something new. Also there are some very small travel companies in Brazil that cater to cultural experience vacations. We can JV with them to build their reputation more globally and help us enter our current base into Brazil.
8.0 Tactics
In an effort to strengthen the potential company success, we have considered the appropriate tactics to support the business objective and strategic thrust. These tactics include approaches to acquiring and managing human capital, managing financial risk, and marketing strategies for our service.
8.1 Human Resources
Explore the World LLC recognizes the importance of ensuring we have a strong workforce at the core of the business. As a result, we consider recruiting and staffing, training and development, performance management, and compensation and rewards as critical components to our business strategy.
8.1.1 Recruiting and Staffing

After careful consideration of the various staffing policies, we have chosen the geocentric staffing policy as the best policy for the company. As Hill (2004) explains, this policy focuses on the best candidates for the job, regardless of their nationality. Although it may seem advantageous to staff leadership positions with parent company nationals to start up business in the new country, a blend of parent company and local personnel would be best considering the nature of the business. As a travel agency wanting customers from all over the world who desire a cultural experience in Brazil, staffing as many qualified local personnel will prove beneficial to the business objective. The geocentric staffing policy will also be an effort to establish a positive presence with locals as the company is providing jobs in the country.
Author, James (2013) confirms that the culture of Brazil to rely heavily on referrals in business is very much the same in recruiting for jobs. He explains that the job boards and advertising methods are not very successful in Brazil as locals prefer to work with people they know or have been referred to. This makes the geometric staffing policy even more critical for acquiring top talent.
Last but not least, the geometric staffing policy positions Explore the World LLC for future growth as we build a team of effective personnel capable of working in various countries and countries. As we build our culture and strengthen our model of unique and enhanced travel services, this culture and strong staffing model will give us a competitive advantage in the industry.
8.1.2 Training and Development
Training and development are critical components for attracting and retaining skilled personnel. This strategy is no different in Brazil and in fact, a study performed by Kelly Global Workforce (Marketwired, 2013), finds that employees in Brazil are increasingly focused on their career management. The employees are taking charge of their career training and development in an effort to stay competitive in the job market. The study identified that employees cite a desire to obtain training and development for use with their current employer rather than to go to other businesses or start their own. The trend is that Brazilian employees are no longer relying solely on their employers for career development and management.
Training and development within Explore the World LLC will begin with cultural and language training. As mentioned previously, Brazilians have a solid grasp of the English language that is beneficial to the employees and the company. Through our partnership with Rosetta Stone, we will offer some basic training in other languages of potential customers for employees as well. Understanding the cultures of our potential customer base will also prove beneficial in anticipating the needs and travel desires as part of the unique experience Explore the World LLC will provide. Focusing again on future growth, we will implement management development programs to help strengthen the culture in the global environment.
8.1.3 Performance Management
Explore the World LLC recognizes the importance of performance management as we expand the business to Brazil. We will establish key measurement criteria to ensure employees understand how their roles impact company performance. Because of the strong reliance on referrals in the Brazilian culture, we will place greater emphasis on repeat business tied to the overall company strategy for growth in the market. Managers are encouraged to provide feedback regularly in lieu of waiting until annual appraisals to acknowledge outstanding performance and proactively correct issues. As a best practice for the expatriates who will assist in setting up the Brazil office and establishing local operations, we will ensure that performance evaluations are completed in person and not by phone.
8.1.4 Compensation & Rewards
Compensation levels in Brazil are higher in comparison to many other countries (Hill, 2013) and with our unique offering of services, Explore the World LLC is comfortable with the salary structures required to retain top talent and remain competitive in the industry. Factoring in the power of referral in the Brazilian culture, a reputation for offering cutting edge travel services, potential for international exposure, and competitive wages should prove advantageous for the company.
The opportunity to expand the business to Brazil must also be attractive for the expatriates. We will offer packages to support expatriates and their families in their move abroad as well as their establishing residence in Brazil. The packages will include housing, cost of living expenses, and education for school age children or spouses who would like to further their education or learn a new trade. The reward structure must also capitalize on the value of referrals in Brazil. We will offer competitive reward programs for employees who manage repeat customers and obtain new customers through referral.
8.2 Financial Risks
Since Explore the World LLC has chosen to take on a large-scale entry, as we require rapid entry into the Brazilian market, we will bear many financial risks. The partnerships and joint ventures we will require in order to be able to provide services at the level we desire will require us to enter quickly and build strong, effective relationships with local businesses. This strategic commitment will allow us to attract customers quickly and market share is expected to flourish not only through our focused advertising campaigns but also because going in on a large scale and committing ourselves so thoroughly to the expansion shows our customers and local businesses that we are in it for the long run. “The large-scale entrant is more likely than the small-scale entrant to be able to capture first-mover advantages associated with demand preemption, scale economies, and switching costs” (Hill, 2004). We will use the strategic advantages that come with large scale, rapid entry to offset the financial risks. With the intention to enter as a fairly large competitor, we will have all the resources and local relationships we need to fulfill all of the promises we make to current and future clients.
Currently, one dollar is equal to 2.31 Brazilian reals and we intend to use that to our advantage as we setup foreign investments into local companies that will assist with various components of our package offerings. By enabling ourselves to provide extraordinary service at a reasonable price, supporting small local businesses and already being well-known in America and by those who have used us to travel the United States, we have every reason to believe that this venture will be successful not only in increasing our bottom line after the initial investments pay for themselves but also in gaining market share in South America. Unfortunately the resources we tie up in the push to Brazil will hinder us from committing to any large scale pushes in other locations we are considering for the future, but as of right now Brazil is our main focus. Once we have obtained a healthy market share with the inclusion of our Brazilian travel offerings, we will begin to consider which country would be in Explore’s best interest for our next expansion.
8.3 Products and Services
The services provided by Explore the World LLC include travel arrangements from air to ground, whether by limousine, van or train. Cultural awareness services whereby clients can learn more about the areas they are to visit before they arrive so as to have an idea of what to expect and how to conduct themselves are also available. In addition, through various partnerships and other foreign investments, Explore offers access to all the unique experiences offered in each exceptional location throughout the United States and Brazil.
Our company is very well known in the United States and fairly known by foreign travelers who have used our services. We are a growing brand with escalating popularity in our home country and with our large scale entry into Brazil; we do believe our reputation will be enough to make the jump more than feasible. We also expect exponential brand recognition once we are successful in a second country. The biggest factors that could have the potential to hinder us are high taxes enforced against foreign investors by the Brazilian government and lack of infrastructure. Brazil is however still a growing country that is busying itself with coming back from some major economic stumbling and they are working towards bettering their infrastructure now more than ever with the upcoming world events to be held within their borders.
The competition and/or substitutes for the services we provide are something of a poor substitute if travelers want everything in one neat package. There are various businesses throughout the country of Brazil that provide guided tours including Ecotourism which is defined as any activity involving nature which gives back to the environment as much as it takes out of it, if not more (EcoTourism in Brazil). It is these types of unique companies that we will be partnering up with in order to integrate their services in with ours in order to provide our clients with the very best of Brazil. These companies will benefit greatly as their revenue is increased each time our clients choose a package that incorporates their guides so we have a complete win-win situation. They provide neat, knowledgeable services and we put them on the map. The greatest benefits that will keep our clients coming back include the convenience of having an organized vacation with all activities from the travel to and from, transportation while touring and places to stay taken care of in one simple package. And if they ever have any problems or need to make changes, they need only make one phone call and we will handle any other businesses involved with the request or issue.
8.4 Pricing
Much of the pricing of Explore the world LLC is determined by market standards. Due to the introductory nature of our services we intend to implement a penetration pricing strategy (Kotler & Keller, 2012) that will ensure that potential customers are not frightened away by our prices, up until our services are appreciated and fully operational. Explore the World will make every effort to maintain a competitive pricing policy and keep the price of in-depth journeys slightly below the price of other luxury travel agencies for the first three years. However, as Explore the World builds its reputation as a luxury travel and tour agencies, it expects to earn the ability to charge comparable rates to other luxury travel and tour companies.

We intend our income structure to match our cost structure, so as to ensure that the salaries we pay to our employees to assure good service are balanced by the cost we charge to the customer. Our prices against the competition will be relevant, but still slightly more affordable; we will work to ensure that all our clients are happy and satisfied with our services. The competition will have more experience, but our knowledge and skills will set us above them.
We have many factors that could ultimately affect our pricing, as the economy is always fluctuating, we will have to be able to stay flexible so that we can provide the same service as promised at different costs. Brazil is becoming a popular destination with many people around the world, and while the economy is not great, there is an increase in travelers and investors. The high crime is a major factor, as many people are afraid to travel to Brazil because they fear being mugged or attacked. The country also is known for corruption, which is a major factor since people may be more skeptical in traveling to Brazil out of fear that they will not receive what is promised.
Explore the World LLC will offer a payment plan within our pricing strategy that will allow those who are interested in using our company to make payments until 15 days prior to travel, which will offer a piece of mind to the travelers’ as well as give us an advantage over the competition.
8.5 Promotion
To promote the company in both personal and business travel markets we will approach credit card companies and airlines to get onto their partner lists for their reward programs. Not only will our business be one for which they can redeem reward points to pay for our services but we will offer our own loyalty program in hopes to attract repeat business. We will accept all major credit cards so that customers can earn more reward points by patronizing us.
As noted, we have a website that is fully self serve for those that still want to feel like they planned their whole trip themselves but we will also offer the option to call, email or chat online with one of our core staff professionals to help plan. Detailed itineraries will be provided after booking along with e-tickets for any flights, transportation, activities, etc. The customer will receive an electronic travel portfolio also including ‘tip sheets’ laying out the secrets that experiences travelers to this territory should know.
We will cross promote locally, too. Those hotels, restaurants, service providers, guides, etc. that we determine we want to work with will get referral bonus incentives to continue to generate new leads. Since the Brazilians are so friendly and welcoming and eager to receive these new customers and travelers to their country we will want the partnerships and image of Explore the World LLC’s Brazilian marketing material, photo gallery and offerings to represent that energy in order to build the excitement of the travelers and we want to assure that the excitement level maintains throughout their entire trip so that they will want to return and soon and to use Explore the World LLC as their ‘go to’ travel provider of choice for Brazil.
Other than reaching out on an individual basis to companies and individuals we will also advertise in travel magazines, on search engines, and expect to enjoy exposure through the credit card company communications to their customers. If possible we would like to secure a feature article in various airline in-flight magazines to pierce that captive audience. We want to assure there are no reasons why an individual or business traveler would not want to use our company for their first or next travel to Brazil. Our pricing will be competitive and given our loyalty rewards, using our company for repeat travel will be even more appealing.
By partnering with the credit card companies, their 24 hour concierge service can help guests book restaurant reservations, call taxis, book theater tickets, etc. at a moments notice as we will provide our listing of ‘on’ and ‘off’ the beaten path service providers who have been vetted for quality and value of service. Feedback surveys will be issued to customers and our online comment and rating system for all of our business partners will be available so people can share their comments, photos, etc. (like with Yelp).
Facebook and other social media pages will be established so that followers can be privy to exclusive promotes and offerings and to kick off our Brazil travel we will raffle several all-inclusive trips to get people buzzing about us. On that note we will work with the Olympic committee and World Cup committee to try to get tickets we can ‘raffle’ off in a sweepstakes promo so as to get people to look at our website, enroll in email alerts and communications, etc.
8.6 Distribution
Most of our marketing and promotion materials will be distributed electronically but we do plan to do some direct mailings to current customers and other contacts we obtain. We will do email blitzes discussing our travel services and provide a monthly and season newsletter to subscribers providing relevant tips and information about travel to the region at any given time of the year. Additionally, our sales team will attend Travel Shows at which people specifically interested in travel both personally and through business will be attending and we can have some face to face discussions with them as well as with other travel agents who may want to partner with us to service their customers where they may have gaps. Brazil has a huge amount of rainforests and we want to be as green and eco-friendly as possible by conducting as much of our transactions electronically to save paper. By creating our mobile app this also provides the customer an at-a-glance, all in one spot place to quickly locate their travel information. The app as well as our website will keep information secure by requiring login name and passwords to be created to access the customer’s unique information. We can use this media to customize and save pertinent information about each individual, as well, in order to better personalize their experience. For example, we can communicate to the hotel that this traveler prefers east facing rooms, prefers a certain waiter or to sit in a certain section at a restaurant or likes a certain brand of bottled water or newspaper so that the hotel can have this all prepared in advance then when the customer checks in she only needs to quickly confirm then get off to her room to relax.