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A BRIC Nation Ready to Launch: Insights on the Labor Market and Business Climate in Brazil from My MBA In-Residence Trip

By Dan Alldridge



Enjoying the visit to BM&F Bovespa



Traveling to Brazil with my online MBA classmates through Kelley Direct’s AGILE course was a great experience. It was a unique opportunity to learn about an emerging market that could not be replicated in the classroom.

I was immersed in the whole country - learning the Brazilian culture through its, business environment, economy, and politics.  During my trip, I was able to observe business politics during the lull between presidential election votes.  The business leaders in Brazil all noted their concerned about the negative effects to the economy if President Dilma Rouseff were re-elected.  These fears came to fruition on 27-October, the day following President Rouseff’s re-election, the market fluctuated drastically ending 3% down and the Brazilian real weakened even further. 

 

Middle Class in Brazil Still New To Disposable Income

Our trip included company visits highlighting multiple aspects of the Brazilian economy – one of which was income disparity. The country has the 7^th largest GDP in the world, but it ranks near the bottom in income inequality.  Almost 70% of the Brazilian population lives in conditions that would be considered slums in the U.S. Fabio Iwabe with BM&F Bovespa (Brazilian Stock Exchange) went so far as to say the “middle class in Brazil lived in slums with good views,” particularly those in Rio de Janeiro.  This idea of the middle class was really shocking when you start doing some comparisons with the U.S.  My opinion of U.S. middle class is a single family home, relatively good schools, and sufficient disposable income to vacation every few years.  Brazil’s middle class was mainly concerned with surviving in the slum with limited access to education and had no thoughts of leaving Brazil.



Leaving the Volkswagen plant and experiencing the “middle class” neighborhoods through the smog.



 

Another issue that is causing the country some heartache is the fact that most of the “middle class” citizens are just now starting to generate disposable income, and they don’t know how to manage it.  Instead of saving, investing, or building equity they tend to spend like teenagers. This is one of the big reasons that consumer goods are such a big market segment in the country.

 

The 167 million people that make up the Brazil’s middle and lower class tend to make up a disproportionate percentage of the consumer goods industry (which saw 17% growth from 2012 to 2013).  This has its root in the immature spending habits of adults just now coming into disposable income that comprise these social segments.  It was also hinted that status purchases such as new clothing, cellphones, and electronics also drive the spending habits of these people.    

 

Businesses in Brazil Need More Talent and Ways around Red Tape

 

Knowing that the Brazilian economy is 7^th in the world obviously means it is doing something right. There are many successful state and local owned companies, although the majority of our visits were to multinational corporations. Working for a multinational myself, I was interested to see what nuances I noticed about doing business in Brazil. Two things really stuck out in my mind about business in Brazil:  the human capital and bureaucratic red-tape.

 

There is a big battle going on between companies in Brazil for top talent. There are plenty of factory and lower-skilled technician level workers to go around, but middle and upper management positions are tough to come by. The country currently has around a 5% unemployment rate, which is rather good considering the country is in a bit of a recession. Many of the companies noted the concern over having enough local talent to fill managerial positions and were taking steps to ensure the pipeline would be full in the future. Training programs, language training, and school incentives were among the common offerings.  The current incentives appeared to be working for the companies.  The Brazilian government must ensure that its citizens understand the importance of education to keep the pipeline of talent filled.

 

Another topic that continued to come up in conversations was the amount of red tape required to run a business in the country. Although it is rather straightforward to start a company, running your operations is a whole different story.  Labor unions are prolific in the country and pull a lot of weight - especially with Dilma Rousseff, the current Brazilian President who is from the Worker’s Party.  Lots of the labor laws and other regulations governing businesses have not been updated for several decades, which has resulted in the layered bureaucracy.  Based on the trip, there are two key things a company will need to do to overcome the Brazilian bureaucracy.  The first is to use local talent.  Start by finding a local lawyer or consulting firm that can help navigate the initial entry into the country.  The second piece of advice would be to have a flexible plan.  Although American businesses love to build plans and execute, the reality in Brazil is that your plan will probably change dozens of times during implementation.

    

Having said all that, doing business in Brazil could still be a bet worth making for a multinational corporation. As the country continues to mature and new politicians come into office, the country will continue to offer opportunities for growth.

 

Interaction with Classmates Enriches In-Country Experiences for Online Students

  

I would be remised if I didn’t mention one of the most enjoyable experiences of the course was interacting with my fellow course mates in person for the week.  The online platform is the only way I can pursue an MBA right now. Although I don’t see my classmates often, when the online courses are coupled with in-person experiences such as AGILE and Kelley Connect Week, it makes the group work, online discussions, and the overall program that much more powerful.

 

Great visit with EY where we spoke with the CEO and the COO of South America.

 

During the Brazil trip, I started to realize just how valuable each individual’s background and expertise were to my classmates’ learning. The companies we visited were in several different industries, which allowed for individuals to take the discussions a little deeper with his or her industry knowledge. For example, one of my classmates who works at State Farm was able to add great insights during our visit to the Brazilian insurance firm Porto Seguro.  She was able to uncover the fantastic services that come with having basic car insurance through the company.

 

There were also several of us with manufacturing or supply chain backgrounds that engaged in very detailed conversations while visiting Volkswagen, Cummins, and FM Logistics.  The supply chain is so often an afterthought in growing businesses.  At Cummins, we were shown insights into the company’s supply chain that would be undergoing a massive overhaul in the coming years.  Cummin’s growth in South America had resulted in fragmented systems, duplication of efforts across sites, and generally an inefficient supply chain.  However, the company has recognized this gap and put together a global plan to lean out their supply chain and make it much more cost-effective.

 

This Brazil in-residence trip was a great way to learn about and explore the business climate of another country with my classmates. I am looking forward to consulting small businesses on my next AGILE experience in Athens, Greece coming up in spring of 2015.

 

About Dan Alldridge

Dan Alldridge works for the ThermoFisher Scientific as an External Manufacturing Manager, currently located in Carlsbad, CA.  In his role, he develops and implements supply chain strategy around insourcing and outsourcing, while maintaining key contract manufacturing relationships.  Following graduation from Southern Illinois University-Edwardsville in 2006, he was commissioned as an officer in the USMC.  He spent two of his six years participating in combat operations in Iraq and Afghanistan.  Dan has business experience working in Europe, Asia, Central America and the Middle East. He is currently pursuing a dual-degree MBA and MS in Strategic Management through Kelley Direct.

 

 

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• Tips for Doing Business in Myanmar from Kelley Online MBA Students Who Consulted There

 

 

Why MBA Students Should Work or Study Abroad - Kelley Direct Student Reflection

By Kash Faheem

Earlier this year, I was working as an engineer in the System Integration Laboratory at Raytheon where Unmanned Aerial Vehicle (UAV), EO/IR (Electro Optical/ Infrared) and SAR (Synthetic Aperture Radar) Sensors are engineered and developed. Because of my experience there, I was offered the opportunity to go to Japan as a Field Engineer Consultant supporting our overseas customers on UAV that Raytheon was subcontracted to. I was a technical engineering consultant in my new role and got to serve as the liaison between Raytheon, our customers and the end users of the UAV.

This opportunity came only a few months after I had already started my online MBA at the Kelley School of Business. Fortunately, I was able to accept this role because of the flexibility of the Kelley Direct program, and it has greatly enhanced my learning in the classroom and on the job.

As I have heard Faculty Chair Phil Powell say at one of my Kelley Connect Weeks, “The greatest benefit of being in an online environment is that you don’t have to wait to apply what you learned in the classroom; instead, your job acts as a classroom laboratory.”

Having this opportunity in Japan took the ‘classroom laboratory’ concept one step further, by adding a true international perspective to the learning curve.

International Perspectives Enhance the MBA Learning Experience

My international project has also enabled me to add a unique perspective to classroom discussions for the benefit of my peers and professors in the four MBA classes I have taken while abroad. I recall two instances from my “Game Theory” and “US in A Global Economy” classes that illustrate how being in Japan helped me discover and share relevant insights with my class.

About halfway through my Game Theory course, I realized that the fundamentals of Game Theory are the same, but the application and motivation could be vastly different in Japan when compared to America. This solidified a very important lesson of Game Theory for me: you should always strategize on how your opponent acts or how they are thinking rather than what you think they should be thinking.

The second learning point was related to how the cultural tendencies of personal financial savings between Japan and the Western countries were drastically different: the average Japanese person saves more than an American. That difference in savings rate will have a different macroeconomic effect on each of the respective countries. Understanding the culture and tendencies is a necessary first step for an outsider to completely understand a country’s economy – and more importantly – the motivation for its fiscal policy. Seeing how much the cultural tendencies, lifestyle, and everyday habits of the people who live there can influence the business climate was the biggest takeaway from my work experience in Japan.

Studying Abroad Provides Deeper Insights Into Local Business Climate

After this experience in Japan, I tell everyone to take any opportunity to travel abroad that they can get and are capable of doing! It’s a challenge with family, work, and finances, but the payoff is residual! I’ve never met a person that has come back from a study abroad, work abroad, or even travel abroad that regretted it.

Globalization has naturally helped countries, at a simple level, understand each other’s cultures and business environments.  The host appreciates when a business visitor has a deeper understanding of the business etiquette in the country. In Japan, a simple bow, using the correct tone, or knowing where to sit in a business or casual meeting can take you a long way in gaining the respect and trust of the host. When abroad, you’re often one of the few representing your country, your company, or your school, and the respect and trust you gain travels further than you would imagine.

Finally, as I mentioned earlier the business environment is shaped by the culture of the people. As difficult as it may have been, or as tired as I was, I’m very glad that I took the weekends available to travel the country, to take the road less traveled, and have the difficult conversations with the locals. This interaction with everyday people enhanced my knowledge of the business climate, and the cultural tendencies of the average person who creates that environment!

 

Kelley’s Online MBA Prepares You for Virtual Relationship Management

Reflecting back on my decision to attend the online MBA program that made this assignment in Japan possible, I remember the networking aspect was a huge apprehension. But a couple terms into the program, I learned that there is a reason online MBA programs are growing: the overall online environment and people’s interactions are changing. Never has it been so easy to tap into your six degrees of separation than now, especially with social media sites such as LinkedIn. With the correct mindset and motivation, this ability to connect with pretty much anyone (professors, celebrities, and executives included) has taken away the boundaries and limitations of what our traditional network is supposed to look like.

It’s an obvious fact that it’s more difficult for online MBA students to network face-to-face, but I also strongly believe that this obstacle has taught us how to build relationships more effectively for our future careers and life. I’ve learned invaluable lessons about how to build and maintain relationships through email, phone, LinkedIn – and when the opportunity allows itself – in person. The way the world communicates to overcome distance barriers is rapidly changing with its growing globalization and reliance on technology, and my project in Japan was a testament to that. As Kelley Direct students, we have been thrown into the fire and are learning quickly how to adapt to these communication changes!

When forming groups or picking teammates in my classes, I have tried to apply the same sense of adventure that took me abroad: I work with new people as often as possible. This has enabled me to expand my network, gain a diverse perspective, and most importantly, learn from more of my classmates. I’ve been most impressed with the quality, experiences, and intelligence of my classmates. Some of my Kelley Connect Week teammates and other classmates have inspired me and taught me more than I ever thought possible.

About Kash Faheem

Kash Faheem graduated with a BS in Electrical Engineering from California Polytechnic University Pomona. After spending some time working with NASA’s Jet Propulsion Laboratory, he moved to Raytheon Aerospace where he was selected to take part in Raytheon’s Engineering Leadership Rotation Program. He was in Japan through mid-October and just returned home to Los Angeles. He joined Kelley Direct in the Fall 2013 and is pursuing a dual MBA and MS in Business Analytics. 

 

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Why the Networking and Faculty Coaching at Kelley Connect Week was Awesome and What it Taught Me

By Craig Davis

I did not know what to expect from Kelley Connect Week. I knew I had signed up for the #1 onlineMBA program in the country and that “orientation” weeks at top-tier MBA programs were not meant to be easy. So as I sat, perhaps a bit apprehensive, in our first session on Saturday evening within a room full of very professional looking individuals I wasn’t sure how to interpret Professor and Faculty Chair Phil Powell’s statement “You will not be the same people when you leave next week as you are today”. Reflecting back, I can say that his statement was entirely true. The Kelley School of Business’s impeccable approach to Kelley Connect Week (KCW) transformed me by generating connections that I truly value and creating an immediate and positive impact on my job performance.

 

Putting the Connect in Kelley Connect Week

I had many great experiences during KCW, but one of the most important to me was the opportunity to make connections with my classmates. The diversity of the cohort was incredible. I found individuals that I shared something in common with (such as a love of Purdue basketball - I won’t share names to protect identities) which made me feel comfortable and at home at IU. I also met individuals who provided different perspectives than my own such as those who attempted to explain how all the components of a plane “talk” to each other (that conversation flew over my head just like the planes they were talking about). This diversity made this a great learning experience and made us comfortable in a new environment.

Some connections  were especially impactful, namely those I made with my case competition team (Ameya Kokje, Lauren Meyer, Andy Schwerha, Ryan Young). What an amazing group of individuals that were representative of the spirit of KCW in both diversity of background and passion for learning. From a project standpoint, we learned from each other’s experiences, helped correct each other when we headed down the wrong path, and ultimately produced a great product. From a personal perspective we became friends. Even after working countless hours in one room that started to resemble an episode of Hoarders, we took time to socialize and learn about one another. That time was invaluable to our cohesiveness as a team. We learned about upcoming weddings, met significant others, learned about each others’ jobs (who knew that if your beer smells like bananas, it’s German yeast?), and saw pictures from military flight training exercises. I believe that these are not the “hey we hung out one week” kind of friends. They are the kind of friends that I hope to maintain long beyond our MBA studies. I am grateful to my team for the KCW experience I had because it would not have been the same without them.

Connect Week Makes Immediate Impact On the Job

KCW not only allowed me to gain great connections, it also had an immediate impact on my job. On the Monday morning I returned from KCW, my boss handed me a presentation I had not seen before and said, “You are presenting this to our Executive Vice President and his direct reports in two hours. Be ready.” I’ve been through this fire drill before, but I am fairly new in this position and had not yet become comfortable speaking to that group. Frankly, my previous two presentations had been below my personal standard due to nerves. However, this time was different. During Connect Week, Kelley School faculty coaches provided our group with great feedback during our group presentations – much of it was very positive. I also received very good individual feedback on my speaking style as well as a couple of points of improvement. Cumulatively, they made me regain my confidence in my presentation skills.

Fast forward to the work meeting, and it turned out to be a bit more of “hot topic” than I had anticipated. I was able navigate the varying (and strong) opinions to confidently present the facts at hand. After the meeting, my boss indicated that I had handled the situation very well. Since that time, I have noticed that I am asked to attend such meetings more often and my participation level in these sessions has risen. KCW gave me feedback and confidence to improve my public speaking, and it is already having a positive impact on my career.  

While the two items I outlined above were each enough to make Kelley Connect Week a positive experience, I could type pages upon pages about my other experiences at KCW that made it such a fantastic way to enter the program. The knowledge gained, the chance to learn from and work with excellent professors and speakers, the social experiences (Sink the Biz – Google it), and the full immersion in an intellectually stimulating environment were all so impactful that it is almost too much to put to words, let alone a brief synopsis. I can only say that Professor Powell was right; I’m not the same person. I am better for having gone through the KCW experience and I undoubtedly made the right decision by choosing to pursue my MBA through Kelley Direct.   

About Craig Davis

Craig Davis works in Commercial Strategy for a Class 1 Railroad. He lives in Omaha, Nebraska with his wife and his garden. Craig received his undergrad from Texas Christian University and spent several years in the Oil and Gas industry before moving into the Transportation industry. He is a first-year student in the Kelley Direct Program where he is currently pursuing his MBA. 

 

 

 

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How to Maximize Your Kelley Experience - Healthcare Club Webinar on September 17

The Kelley Direct Healthcare Club invites you to a webinar on how to Maximize Your Kelley Experience: Learn from Experienced Healthcare Professionals and Alumni.

RSVP for the Webinar: September 17, 2014 at 9pm ET 

Alumni Panel Discussion Topics: 

• What’s the key to success at Kelley?

• What courses are going to be high-impact at my workplace?

• What electives should I choose?

• How can a Kelley degree help me switch industries, or accelerate me in my current one?

• How can I take advantage of Kelley’s extensive alumni network?

• What career opportunities are there in the health care business once I have my MBA?

 

Featured Speakers: 



 
MARK BARBATO, RPH, MBA (1982), is President and CEO of InChromatics LLC. Mark’s career include 35-years with Eli Lilly, retiring as Vice President of Alliance.  Management. He is a former president of the Kelley School of Business Alumni Association.

DWAYNE DIXON, MBA (1993),  is a Director of Customer Marketing at Alcon Labs.  Dwayne brings over 25 years in the medical device, diagnositic and Pharacesutial business, including Director of Marketing at Johnson and Johnson. and Vice President of Global Marketing at ZASSI Medical. 

 

 

SAM MISIR, Pharm D, MBA (2007), is the Director of Medical Affairs at Daiichi Sankyo.  Same bring over 10 years of pharmaceutical industry experience, including companies such as Johnson & Johnson and Proctor & Gamble. 

 

 

 

RSVP for the Webinar: September 17, 2014 at 9pm ET 

 

 

Clabber Girl Moving Forward with MBA Student Recommendations from Kelley Connect Week

It was around this time last year when a new class of MBA students finished presenting their recommendations to faculty and executives from Clabber Girl Corporation. I recently followed up with Lori Danielson, Vice President of Clabber Girl, about her team’s experience working with our online MBA students last August. 

Every Fall and Spring, our online MBA students come to the Indiana University Bloomington campus for KelleyConnect Week where they work on real cases from both local (first year) and global (second year) businesses. The fall 2013 case was from Clabber Girl, an industry leader in customized food products based in Terre Haute, Indiana.

Clabber Girl has maintained relevance and growth for over 160 years by adapting to changes in the food industry and innovating new products.  When they came to us in 2013, Clabber Girl’s leadership team was evaluating several options for growth and diversification including expanding the production of their “Innova” product lines; acquiring or partnering with other companies; and entering into animal feed industry. Over one hundred of our MBA students used what they learned from the Kelley School professors along with their own research and business experience to prepare fifteen minute presentations for the Clabber Girl team. Interviewing Lori and her colleagues was part of the students’ research process. Lori explained why she really enjoyed this part:

“Doing thirty minute interviews with more than twenty student teams was very time consuming, but very beneficial. This would have been worthwhile for us even without the students’ recommendations. The Kelley students challenged our beliefs and grilled us with questions, which helped us critically analyze our strategy.”

Another part of the students’ research process was visiting the Clabber Girl plant in Terre Haute.  Lori provides insight as to why this was so important:

“We really wanted the students to understand both our culture and the physical space that we were working with. We’re in there every day, but when we get that many new faces to walk through the plant we’re bound to get new perspectives. And we got what we were hoping for. Many of the presentations identified new ways to think about our equipment placement and plant operations.”

Since that Kelley Connect Week, Clabber Girl has moved forward with their research and development of new ingredients for animal feed and have manufactured their first product. Sales of micro-encapsulated products such as the InnovaBakeand InnovaFreshthat our MBA students evaluated will have nearly doubled in 2014 compared to 2013. Lori commented on Kelley Direct’s contribution to the company:

“The research that Kelley Direct MBA students did helped us grasp the market potential of our products. Their work confirmed our strategies and gave us the confidence we needed to proceed. I would highly recommend working with the Kelley School, and especially taking the time to meet with the students. That process was very rewarding for my colleagues and me.”

Not only do the Kelley Connect Week cases benefit the businesses we work with, but our online MBAstudents leave knowing that they made a difference for a real company and walk away with a new appreciation for what it is like to be an executive.

About Clabber Girl

The genesis of Clabber Girl was a wholesale grocery store opened in 1850. The family business added a storeroom and spice mill behind the store in 1869 and experimented with commercial production of food ingredients.  By 1879, Hulman and Company was selling its first baking powder formula under the name “Crystal and Dauntless”. Over time, Hulman and Company refined its baking powder formula and re-introduced it in 1887 under the new brand name “Milk”. The powder was sold in tins that prominently featured on the label a girl holding a plate of baked goods.  Over time, the company observed that when customers asked for its product in grocery stores, they often referred to it as “that tin with the girl on it.” Yielding to customer popularization after one last refinement of the formula, the product was renamed “Clabber Girl Baking Powder” in 1923 and today is one of the oldest brands in America.

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