Brazilian Internship with Pet Wellness Company: Logistics, Consulting, and Response to the
Trucker Strike
Lorenzo Davon Hamilton
The University of Florida
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 1
Table of Contents (For Internship project)
I. Introduction
a. Purpose of project
i. Purpose
ii. Organization collaborated
iii. Note the concepts that will be used
1. Jeitinho and Malandragem
b. Research question and relevance to Latin American Studies
i. Research question
ii. Who are my chairs
iii. Relevance to Latin American Studies
II. The Internship
a. Describe the host agency
b. Mission
c. Employees and Volunteers
d. Background history
e. Internship goals and assignments
f. Market overview
g. Interdisciplinary research
i. The strike and adaptation
III. Reflections of Internship experience
a. What was learned about the topic of the internship
i. Learnings
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 2
b. What was learned about the approach of and challenges faced by the agency
i. Challenges faced in individual efforts
c. What was learned about the context of the internship
IV. Conclusion
a. Sum of what was learned
b. How I was changed by experience
c. Impact of internship on host agency
d. Contributions to scholarship and/or society
V. Bibliography
VI. Acknowledgements
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 3
Introduction
During the summer of 2018, I embarked on an internship for six weeks in southern Brazil with Docg, a Brazilian pet cosmetic company. Originally, I believed that I would be working with the CEO for negotiations. The plan was to work alongside Chinese investors or in logistics.
The owner and I had spoken about the internship a few times before I arrived, but no final agreement about the internship had been reached. Since I had been studying the relationship between China and Brazil, the original plan was ideal for me, and when I arrived I assumed that I would be focusing on their relationship with Chinese investors. Unfortunately, that plan fell through. I ended up working mainly with the logistics personnel.
The purpose of the internship changed once I arrived to one in which I would explore the processes of the supply chain portion of the company and to learn about the way Docg operates.
The internship took place between May 18 and June 29, 2018, in Curitiba, Brazil. The internship was carried out at Docg’s headquarters. I would be asking myself, what exactly does a pet cosmetic company do? What do they sell? What services do they provide? In the “Internship” section, I will delve into the company and its products.
During these six weeks at Docg, I increased my understanding of supply chain management as well as my knowledge of Brazilian business laws and culture. I was not well versed in American business laws beforehand, nor am I now, therefore I was unable to compare what I learned to America’s legal system. In this project, I aim to explore the Brazilian business culture instead of doing a comparative analysis between Brazilian and Western customs or laws.
During my internship, I was able to experience a key moment in current Brazilian events- the trucker strike. I was able to see the effects of a strike within the supply chain during the entire six weeks, some of them within the first two weeks. Complications with delivering the customer’s
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 4
products began to arise as well as transporting the products to the warehouse. I believe this experience facilitated my understanding of the Brazilian economy and politics; Brazil’s laws seek to promote domestic commerce. Companies who want to import products or materials must be willing to pay higher taxes. In the case of Docg, they manufacture all of their products in
Brazil. Docg has not expanded to other countries just yet, but they are exploring their options.
In lieu of writing a thesis, I decided to do the internship. I hoped that it would provide a more immersive experience that would help me educationally and professionally. With this, I believe that the internship will provide a path for my long term goal of being a diplomat.
Understanding international business environments and being able to communicate cross- culturally are pertinent for any diplomat.
This project will review literature associated with the cultural aspects of Brazilian business and society. Also, it will take a closer look at the greve dos caminhoneiros that took place in Brazil. Concepts such as jeitinho and malendragem will also be included. In the literature section, I will go in more depth about the relation of these concepts through business and culture. Considering the topic and time of the internship, I have chosen to utilize the political economy as the framework that will guide my critical analysis. This corresponds with fits the research question of the project: How did the Brazilian company respond to unforeseen economic or political instability?
The committee for this project is comprised of two professors from the University of
Florida, Dr. Brian Gendreau and Dr. Mary Risner, from the University of Florida. Dr. Gendreau is an affiliate of the Center of Latin American Studies, and Dr. Risner is an Associate Director of the
Center of Latin American Studies. As my supervisor, he has worked alongside me during the duration of my master’s program, and he provided suggestions to enhance my qualitative research
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 5
and understanding of the area economically, as well as politically. Dr. Risner connected me with the colleagues in Brazil who inevitably put me in contact with Docg. She has also been a great point of reference for literature that is related to Brazilian culture and business. Between both of them, I have developed a sound research question and purpose for producing this analysis.
Latin American Studies include an array of topics and foci. It can encompass key segments inside the area and abroad. Business in Latin America is particularly important because there are large state-run industries, private companies, and international enterprises working in the region.
Though this project aims to focus on just one private company, I consider the knowledge generated to be particularly helpful for those wanting to do business in Brazil, Latin America in general, and for economists. Not only does this project include literature on the topic, it also includes perspective from my experience during my internship.
The Internship
I chose to do my internship with Docg. They are a pet cosmetic company that is based in
Curitiba, Brazil. Their headquarters and only store are both in Curitiba. Docg produces an array of pet products such as perfume, shampoo, conditioner, accessories, and treats.
Docg has around seven or eight people working in the office daily with various positions.
The information technology, logistic, and financial personnel tended to handle the bulk of my concerns. The company itself is based around similar models established with companies like
Avon, Natura, O Boticario. They have a business model that features several ways in which to make sales. Customers can buy from the store in Curitiba, they have the option of buying products online, they can buy from franchises throughout the country, or they can opt to purchase products from consultants.
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 6
Docg functions as a chain and utilizes two procedures for sales: sell-in and sell out. First,
Docg works with franchises (sell-in). The franchises are not owners of Docg, but rather partners.
They work in compliance with all of the rules of the company and are allowed to use the logo and sell the products. All of the products that are sold to the franchises are sold at a discounted rate
(50%). Franchises can buy in bulk and sell to customers. The sell-out method is different; this channel is closer to the Avon model. Consultants buy products from Docg in the form of a kit and sell directly to customers. They may choose the manner in which they will sell their products. They may choose to sell by going door to door, through friends, or even through social media. There are four types of kits offered. Kit One and Kit Two are for “Regular Consultants”, but Kit Three and
Kit Four are for “Consulting Leaders”. There are incentives for climbing the ladder including a higher percentage of profit and higher discounts. For example, a regular consultant will invest
R$150 for a kit at a discounted price (either 12.5% or 25% depending on where the kit is bought from). They will make a profit of R$51 or more. However, a consulting leader can invest R$1200 for a kit at a discounted price (either 15% or 30% depending on where the kit is bought from). The consulting leader will make R$1200 or more.
The mission of this company is the following: To create the highest quality that enhances beauty and well-being of the animals, which translates the intention into the values perceived by customers and provided to their pets (Plano de negócio, 2014).
Criar produtos de altíssima qualidade que enalteam a beleza e promovam o bem-estar aos animais, traduzindo essa intenção, em valores percebidos pelos clientes e proporcionados para seus PET’s.
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 7
The products sold by Docg are geared to enhancing the quality of pet lives. Items such as shampoo, conditioner, bandanas, perfumes, dog treats, and toys are part of Docg’s catalogue for pets. Like that of the United States, the culture of pet culture in Brazil is strong. Many owners try to offer their companions the best quality of life possible.
Market Overview
Brazil’s cosmetic industry for pets is relatively competitive. There are upcoming companies attempting to make entries the market, one of them being Docg. However, there are also a handful of companies that already possess a substantial share of the market.
Unlike a pharmaceutical company that aims to treat the health of animals, Docg strives to enhance the wellbeing of the animals that they serve. Health and wellbeing are different in nature, which is why Docg has had so much success. Most pet owners want their animal to be healthy, hence the reason for vet visits. However, wellbeing is a different concept than health.
Wellbeing refers to the comfortability or happiness, whereas health refers to a state of being without illness. Docg was able to penetrate the market and compete with established businesses by focusing on wellbeing.
In Docg’s original business plan, they created a table that included competitors, their product, volume, description of the product, price and date (plano de negócio, 2014). Some of the most prominent companies were: BELLOKÃO, EMPORIO PET, PET SOCIETY and
VETNIL. Of course, the table included other companies as well. Below is a portion of the table from Docg’s business plan (Table 1):
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 8
Table 1
MARCA PRODUTO VOL DESCRIÇÃO PREÇ Data
UME O Consul
(ML) ta
AVERT SUPLEME 30 Suplemento Avert Ograx-3 com Ômega-3 R$ 11/02/2
NTOS CAP de 500mg - 30 Cápsulas 49,90 016
BAG CAMA Puff Retangular Grande Labradores com R$ 11/02/2
DOG PET Listras Coloridas - Bagdog 224,9 016
9
BELLOK BANHO A 500 Banho a Seco Spray Bellokão - 500ml R$ 11/02/2
ÃO SECO 27,21 016
BELLOK BANHO A 500 Banho a Seco Spray Refil Bellokão - R$ 11/02/2
ÃO SECO 500ml 22,90 016
BELLOK DEO 150 Deo Colônia Bellokão Lady Rose - 150ml R$ 11/02/2
ÃO COLONIA 16,90 016
BELLOK DEO 150 Deo Colônia Bellokão Happy Baby - R$ 11/02/2
ÃO COLONIA 150ml 16,50 016
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 9
BELLOK DEO 150 Deo Colônia Bellokão Femme - 150ml R$ 11/02/2
ÃO COLONIA 16,00 016
BELLOK DEO 150 Deo Colônia Belokão Xereta - 150ml R$ 11/02/2
ÃO COLONIA 15,65 016
BELLOK SHAMPO 500 Shampoo Bellokão Hipoalergênico - 500 R$ 11/02/2
ÃO O mL 16,90 016
BIO CONDICI 500 Condicionador Pet Lambedura e R$ 11/02/2
FLORAI ONADOR Automutilação 22,90 016
S
BIO CONDICI 5000 Condicionador Pet Lambedura e R$ 11/02/2
FLORAI ONADOR Automutilação 104,9 016
S 0
CEPAV SUPLEME 200 Allerdog Cães R$ 11/02/2
NTOS 59,00 016
DR DOG BANHO A 500 Shampoo Dr. Dog para Banho a Seco R$ 11/02/2
SECO Perfumaria Fina - 500 mL 21,99 016
DR DOG SHAMPO 500 Shampoo Dr. Dog para Banho a Seco R$ 11/02/2
O Perfumaria Fina - 500 Ml 21,99 016
ECOVET LIMPA 70 Limpa Patas Ecovet - 70ml R$ 15/02/2
PATAS 25,90 016
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 10
The most successful companies are Pet Society and Emporio Pet. These companies are not represented in the list above because I wanted to show a variety of companies with which Docg is competing. It is necessary to show that Docg competes with more than two companies.
Including a list of these companies would take up several pages.
These companies have set the bar high against its competitors in the market. Pet Society, according to Docg’s business plan, is considered the best brand within the market today. They have an array of lines within the brand that include pet hygiene, well-being, and even natural products from the Amazon. On the other hand, Emporio Pet was a pioneer in the creation of ecologically correct animal products for aesthetics. Since 2005, they have been working to create products from natural extracts for pet baths (plano de negócio, 2014).
Docg was created in 2014 to respond to some of the requests of patients bringing their animals to DrogaVET (Plano de negócio, 2014). This company is a pharmacy that produces medicine for dogs, cats, birds, horses, and exotic animals. Docg is the sister company of
DrogaVET. Docg began making cosmetics and other products to complement the already established DrogaVET. The older sister company was created to ensure the health of pets, whereas
Docg was created to maintain the wellness of pets. Essentially, Docg was able to enter the market by launching alongside DrogaVET. Many of those who used DrogaVET for pharmaceutical purposes would later be introduced to Docg. The sister company, DogaVET, sells pet products,as well as medicine, in their lobby. When I visited the DrogaVET in Curitiba, I saw Docg products for sale. They had a small selection, but a selection nonetheless.
At the beginning of the internship, I was trying to adjust to the differences that were present.
Some of these differences included language, culture, region, and the business environment. The
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 11
first goal I had set for myself was to learn about the company and how it functions. The employees that I encountered who work at Docg varied. There were the employees that worked in the office and those who worked in the store. Office workers would visit the store from time to time, but its staff primarily consisted of two people, one of which being the logistics advisor. I was advised to work alongside him to reorganize the products in the stockroom and count all of the products. That took me about four weeks as I shadowed people and completed mini-assignments.
For one of the assignments that I had in week four; I was required to go the store in Curitiba and reorganize the stockroom. We also counted all of the products in the store; it was a tedious task. In the fifth week, I had to visit the warehouse for stock in Maxton and went on a tour to observe how logistics work for shipping.
As the internship progressed, I became more accustomed to all of the changes. However, I still felt unprepared. Essentially, we confronted problems and set goals as we went. We discussed my role as an intern and what I could do when I arrived, but fluidity in the business place may have been cultural norm. There were moments where I felt completely stagnate and like I was simply just showing up to the internship, but there were also other moments where I felt the opposite. I felt overwhelmed by information and bombarded by new Portuguese phrases/slangs that I never heard before.
Another issue that I faced was understanding what I was doing there. I had traveled thousands of miles to learn about logistics and spent the first three weeks solely learning about the company. Sometimes, I felt so behind that I would have to go outside and brainstorm how this was going to turn into a final product. Knowing that I had lost an opportunity to do international research after I was required to switch my topic and internship focus made me feel unprepared and weary. I overcame some of those disappointments by accepting the challenge and trying to learn
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 12
as much as I could about the entire company and logistics. I believe that I had several opportunities to accomplish this: getting a tour of Maxton (stock warehouse), getting a tour of DrogaVET, working in the store and establishing friendships with the employees there, and creating suggestions to the major issues that were occurring.
I was presented with five problems that were occurring in Docg and had to uncover ways to solve them during the final week. The list of problems is shown in the table below (Table 2).
Table 2
Problems 1. Insufficient 2. 3. Control 4. After 5. Find such as products in Assembling how many employee alternative for stock kits at the samples are makes transportation store given out in budget, get in to cut costs store touch with American pet toy production company
During the final week, I was given these five problems to resolve (as seen in Table 2). Did I resolve them myself? No, however, I did suggest new perspectives to resolve the issues that were presented. The first issue, an insufficient quantity of products in stock, was a simple fix. Generally,
Docg had three months’ of stock. Considering the issue with the strike and potential political insecurity in the future, I suggested producing an amount of products sufficient for four months.
The additional month would allow for a buffer in case another national issue arose. The second problem, the process of ordering in the store, was a bit more complex. Orders made in Curitiba were being separated and packaged within the store. Separating orders in the store complicated the job of workers within the store. Assembling products at Maxton, delivering the products to the store, then completing orders for consultants was extra work. The central idea of being as efficient
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 13
as possible is to work smarter, not harder. The resolution was to have consultants can place their orders, gather and package them in Maxton, and then have the box of products sent to the store for consultants to pick up. The third problem was easy to resolve. There were free samples for customers at the store. They were not being regulated; a customer could take three shampoo samples and two conditioner samples. As a result, there was no idea of how many samples were being taken and by whom. The most reasonable resolution was to create and leave an excel sheet by the register. By doing so, Docg could keep count of how much and what was given out (see
Table 3).
Table 3
The excel sheet included the name of the client (cliente), the name of the product (produto), quantity (quantidade), cost of the sample (custo), the employee who gave the product to the client
(responsavel), the date (data), and if they did the survey (fazem o questionario). I created a survey featuring questions for clients about the quality of the product and if they would buy it. The fourth problem, as seen in Table 2, was to get in touch with American pet toy production company.
Truthfully it was not a problem, but rather a request. I just sent an email inquiring about the prices of the American products. The CEO was interested in knowing more about the American market and trying to make partners in the United States for future business ventures. The final task was never resolved while I was at Docg. Logistics needed to reduce the costs of transportation. In order
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 14
to do so, there needed to be a change of carriers. While I was there, other options were identified to reduce costs. However, a contract was never secured with any other carriers. During this last week, I made a slideshow (very informal) of the problems and potential ways of resolving them. I sent it to the logistics personnel for review and revision.
Interdisciplinary research
There were two halves of my internship: understanding the company and logistics. The company I interned with is relatively new (two-three years old); I have not found anything in literature specifically about pets in Brazil or related matters. For this reason, I chose to focus more on the business environment in Brazil instead of pet literature. I chose to look towards jeitinho and malandragem in Brazilian businesses.
In the summer of 2018, political issues came to a boiling point for a portion of the country’s working class. Brazil’s truck drivers went on strike as a way of protesting the high costs for diesel fuel. From the 3rd of July in 2017 until the first day of the strike (May 21st,
2018), the price of the fuel had increased by 56.5% at the refinery. As a result of the sharp rise in prices, the truckers launched a strike. The results were blocked highways and shortages of products and fuel within cities all over the country (“Greve dos caminhoneiros: entenda o movimento que parou o Brasil,” 2018). During this time, Brazil was in complete disarray. Gas prices began to skyrocket, and because deliveries were not being made, food prices were inflated in larger cities such as São Paulo. Gasoline was scarce and in some locations, completely unavailable. Considering that the strike lasted a week and a half, truck drivers were able to position themselves in solidarity to make gains in their fight. With that being said, I was unaware of any temp workers replacing the drivers throughout the country. Perhaps their quick band in
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 15
solidarity caused the government to negotiate and companies to be caught in the middle. As a result, adaptation is pertinent in emerging markets. Whether it is a trucker strike, coup, combating inflation or anything irregular and unstable, companies are forced to use innovation as a way of surviving amidst difficulties.
Strikes in Brazil are not necessarily uncommon; much of the time, groups are banding together to resist treatment or pay that they consider being unfair. Though this type of action may be needed to challenge the status quo, it can disrupt the operations of companies that provide goods and services to the public. What would citizens do if there were extreme shortages of food, water, or electricity for prolonged periods of time?
Entering my internship, I was unaware of the difficulties that new companies face. Since
Docg has been operating for a couple of years, I saw the backend of issues being resolved within the company. However, I did see some of the results of their lack of experience in dealing with instability within their country. During the strike, logistics appeared to be discombobulated. Out of all the departments that I came in contact with, I believe that the logistic branch was the most overwhelmed because of the lack of products in stock. It felt tense and unsettling. I found myself questioning the ability of the company to make up ground that they had lost. Issues arising from the strike led to a delay in company growth. Problems such as delayed delivery of customer products and lack of products in stock brought Docg to a stand still. Activity in the office was high, but sales of some products were low in specific products because they were unavailable.
Inevitably, they needed to find solutions and did so.
Reflections of Internship experience
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 16
The way in which Brazil functions is quite different than its North American counterparts
(primarily Canada and USA). Business and politics are both much more complicated in senses.
For that reason, there are always attempts to “cut corners”. The degree in which corners are cut may vary, it could be something as simple as using family connections to accepting bribes or using materials to create products to displacing families to construct soccer stadiums for the
Olympics. This form of craftiness is known as “jeitinho”. The translation for the term is along the lines of finagling, contriving, and bending of rules (Kelm and Victor, 2017, p. 18).
Jeitinho is primarily connected to a negative connotation because of its relation to corruption on a larger scale. Corruption is something that can start in small doses and gradually grow into something overwhelmingly out of hand. A question to ask oneself is: how does corruption begin and how does it continue to grow? All potential answers must lay with
Brazilians giving their commentary on jeitinho. By using the “little way” or jeitinho, it begins to open the door for heavier forms of corruption.
Today in Brazil, the act of committing small corrupt actions, like skipping the line, buying fake products, amongst others, is becoming more natural. These small acts appear to not change anything, but they do make changes (Cristina de Araujo Faria, 2016, p.50).
The year of 2018 is an important year for Brazil and its citizens. First and foremost, it is an election year which is always interesting in the country of Order and Progress. Tension had already began to erupt in the country before I arrived. Marielle Franco, a social activist, had been assassinated in March and tension had began to pick up in Rio de Janeiro (Marreira, 2010). Also, former president Lula had been arrested on charges corruption and money laundering amidst his campaign for presidency.
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 17
The truck driver strike began on Sunday, May 20, 2018. It caused ripples throughout the country which was bound to happen. The protest reached twenty-four of Brazil’s twenty-six states as well as the Federal District. What may have started as a organized grassroots movement quickly became a national debate. “The truck driver strike lasted eleven days and sparked a crisis in fuel and food shortages around the country. The movement ended on Thursday, May 31,
2018” (Costa and Prazeres, 2018).
During the strike, I saw lines of cars waiting for gas in Curitiba. It had become a hot topic at home and work. No one knew how long it was going to last, but most people that I spoke to were optimistic that it would end soon. Towards the last days of the strike, I traveled around nine hours by bus to Foz do Iguacu. I departed around 10 pm and arrived in the morning which was standard. After we left Curitiba, I began to see eighteen wheelers alongside the highway. Every so often I would see fire pits with people standing around. I began to grow more concerned as I saw people who had become part of the strike. Foz do Iguacu was not as affected the same way as Curitiba or the rest of the country. I had conversations about the strike with taxi and Uber drivers because I knew that they would be able to give me a new perspective. Since Foz do
Iguacu is a city that borders both Argentina and Paraguay, and Paraguay’s border is open,
Brazilians could drive into Paraguay to get gas if the city had a shortage.
Outside of Paraná, states like Rio de Janeiro and São Paulo were intensely affected by the strike. In one account reported by Globo, the price of a 50 kilo bag of potatoes that would normally cost R$70 to R$80 rose to close to four times its original value: between R$250 and
R$300 (Sorosini et al., 2018). The truck driver strike seemed to spread like wildfire and was widely reported by various media outlets. My first day was May 18th. Ironically, my start date was a Friday, but by Monday the strike already began. The strike officially lasted eleven days
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 18
(May 20-31) (Costa and Prazeres, 2018). During these eleven days, the office seemed normal (in hindsight). I believe my coworkers were more concerned with their personal wellbeing during this time. After the strike, it seemed like there was tension in the office. The aftermath had finally arrived, and it was time to get to work.
While truck drivers were on strike, the company became unable to manufacture products because the materials needed could not reach the factory. After the strike ended, Docg was left in a tough position. They were already behind on shipments, but the strike put the company even farther behind. However, orders for products continued rolling in and customers continued to come into the store in Curitiba. Though volumes were lower than usual, products were still being sold. The stock for products began to run low and some even ran completely out.
During the actual strike, Docg did not have the leverage to make sufficient changes to their policy for production. The discussions about revamping the policy came post-strike.
Unfortunately, after the strike it had never crossed my mind to question how much the company was affected financially. I imagine that almost all companies in the country were in some way affected, but never saw estimates of the losses.
Moving forward, I had to complete tasks towards the middle to end of the internship. One of the tasks required me to resolve the five issues that Docg faced. This idea was more along the lines of consulting than anything, but I happily obliged. I suggested having four months’ of stock produced in place of 3 months’. Should there be another strike or crisis, four months’ of stock would give the company enough time to adjust.
Industry and policy response
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 19
Business in Brazil can be tedious in comparison with the United States. The consideration of Brazilian taxes has almost always come into play when a company is deciding to create a product or brand. Externally, some companies avoid business with the South American superhouse altogether. Docg has yet to expand outside the borders of the country because of its heavy taxation when exporting or importing products.
Graph 1 Starting, operating or even working alongside businesses in the country requires time and attention to detail. In 2017, the World Bank estimated that it takes about 80 days to start a business in Brazil as seen in
Graph 1 (World Bank, 2018). I was unaware of this drawn-out process when I was in Brazil, but it makes sense in hindsight. None of my colleagues in Curitiba, or in Brazil for that matter, ever spoke about creating startups. That is not to say that Brazilians do not create businesses, but rather that it may be easier for them to join an established company instead. Interestingly enough, Docg may have developed a model to help stimulate growth for potential future business owners. As stated earlier in the paper, Docg decided to use the Avon model for their company; consultants get the experience of being their own boss and creating their own hours. It is unclear how long it took for Docg to become an official business, however, their business plan had key events starting in 2015 leading all the way up to 2019.
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 20
As seen in the graph attached, the number of days to start a business has decreased over the past several years in Brazil. For foreigners entering the country, this could deter them from getting involved with creating business inside the country. To provide some context to how long this process actually is, it would be better to compare with other countries within Latin America.
To start a business in Mexico it takes 8 days, Argentina takes 24 days, Bolivia takes 45 days and
Uruguay takes 7 days (World Bank, 2018). Brazil’s process to start a business is longer than the average country. It does not take the longest in Latin America -- Venezuela takes a staggering
230 days to start a business (World Bank, 2018).
Some of the most interesting talks I had with my co-workers involved Brazilian taxes.
Perhaps they were hyper aware of the tax system since they were working in Business. I was asked many questions about the American tax system, many of which I did not know the answer to. As a result, my coworkers shared some interesting information about the Brazilian tax system. In Brazil, the government categorizes companies into three sectors: commercial, industrial, and services. After it is determined which section a company is in, it is assigned a tax code. Three tributaries codes exist: Simples Nacional, Lucro Presumido, Lucro Real. New businesses hoping to expand will start at Simples Nacional, but they will eventually grow into new tax brackets. Simples Nacional is usually better for smaller businesses, which would include companies with gross revenue of up to 4.8 million Reais (F10, p.6). Lucro Presumido is generally better for medium-sized businesses, and it is a simplified taxation formula. Essentially, it determines the basis of corporate income tax and social contribution on net income (IRPJ and
CSLL). The calculation between corporate income tax and social contribution on net income is pre-established by legislation. The presumed margins are the following: 8% for commercial activities and 32% for the provision of services (situational) (F10, p.7-8). The risk is that the
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 21
company could potentially pay more taxes if they do not produce enough profit, which is not ideal obviously. Lucro Real is used for large companies primarily. This tributary is calculated on the actual net profit of the calculation period (F10, p.9). Specifically, it would be accounting profit plus its adjustments (whether positive or negative) which are required by the tax legislation. At the current moment, Docg falls into Lucro Real tax bracket.
Commercial businesses must pay state taxes and federal. Industrial businesses must pay federal taxes, state, and municipalities. Services just pay taxes from federal and municipality taxes. These taxes can be pretty hefty once they all are calculated. State tax in the majority of
Brazilian states are 17% but can go as high as 19%. Consider adding an additional tax for municipalities or federal taxes. Unless a market is untapped or has low competition and a large market, it seems like companies will stray away from entering. For this reason, Docg has not expanded to many states. The market may not be suitable and said state’s taxes may not be worth the risk.
Brazil has extremely high import taxes on foreign goods and it costs a bit to export goods as well. Brazilians often pay more for the products as a way to express themselves socially, and companies tend to manufacture products in Brazil to avoid some of the steep importation costs.
For example, Ford has a joint-venture plant in Brazil where they manufacture cars. The cars are manufactured for Brazilians and are cheaper than imported Fords. This form of jeitinho does not apply to any of the business that takes place at Docg, but it is rather a description of Brazilian response to hefty taxes. However, Docg is considering to extend the franchise to Cancun and other international locations. I expect them to manufacture the products in the country which they are located in.
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 22
Conclusion
Locating and securing the internship was one of the most difficult tasks for me.
Having barely any reliable professional contacts in Brazil meant that I had to utilize the resources in my department, Latin American Studies. Thankfully, their connections in Latin
America range across countries and interests. I was first connected with a company in São Paulo that worked with American corporations ensuring social corporate responsibility. I was offered the internship, however, I was required to stay for six months. The company’s management claimed that to be normal in Brazil, a minimum of six months. Thankfully, I was able to connect with the CEO of Docg and secure a six week internship with the company.
My internship experience with Docg offered me the opportunity to grow as a young professional and as a student interested in the area. Though we didn’t work elsewhere in Latin
America, I had interactions with Brazilians from different parts of the country and one employee from Uruguay. The way in which business is conducted in Brazil contrasts with that of the
United States greatly. The workdays started at 8:30 am, 9:00 am, or 9:30am some days. When the World Cup was taking place we would watch it on the office’s main screen when it wasn’t being used or have it on our laptops while simultaneously completing tasks. Maybe that isn’t so different than the United States, but when Brazil played, we were released for the day. That would never happen in the United States; however, that may relate to the lack of importance that we place on futebol.
Those six weeks spent at Docg’s headquarters taught me more than just cultural knowledge, but also how Brazilian companies function. Though there was uncertainty for the first two weeks of the internship due to the strike, I gained much from the manner that the logistics
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 23
personnel and the CEO responded. Having this experience offered insight for me both as an international citizen and as a young professional working in international settings.
I consider my project to be a stepping stone for future students in the department. I highly recommend the internship track without reservation, because the experience led me to a deeper understanding of work-life in Brazil and it provided international business knowledge that will transcend into my professional career. I hope to see future students taking this path to enhance their professional experience while pursuing degrees in higher education.
Before interning in Brazil, I wanted to live and work in Brazil full time. I do not think that
I understood the differences that occur politically and in the workplace with Brazil. I now consider my understanding of the dynamics in Brazilian work environment to be much stronger. Though there is still so much to learn, I have begun to understand the role of politics in the Brazilian business environment. To have worked in Brazil during one of the biggest strikes in recent years allowed me to gain a perspective that only local Brazilians will understand.
I believe that Docg was affected just as much as I was during my six weeks. The employees and I were able to share interpretations of the company, the market, and differences between our cultures. Our conversations were rich in nature and provided us opportunities to share our cultures and values with each other. For the first few weeks, our discussions were geared towards the
American tax system, my perspective on the current governmental administration, and even
American expressions and customs. My interactions with the employees were genuine. On the final day my coworkers took me to lunch at one of the best buffets in the area. We were able to discuss our accomplishments, my experience, and share many laughs over fantastic food.
For those interested in Brazilian politics and business environment, this project presents insight and may serve as a guide into unforeseen political activity within the country. Regrettably,
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 24
this project does not provide the perspective of the truckers. However, I was unable to meet any of the truckers during my stay in Brazil. For those interested in international business these types of experiences will serve as a precursor to what may occur while working abroad, particularly within Latin America.
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 25
Bibliography
Apresentação de novos consultores, Ana Isabelle Goes Rufcca, 2014, Descubra uma
oportunidade autentica e innovadora.
Apresentação investidores, Juliano Cortes, Sandra Schuster, Flávio Pigatto, 2014, Descubra uma
oportunidade autentica e innovadora.
Bank, The World. “Time Required to Start a Business (Days),” 2018.
https://data.worldbank.org/indicator/IC.REG.DURS?end=2017&locations=BR&start=20
13&view=chart.
Costa, Flávio, and Leandro Prazeres. “Caminhoneiros e governo negam que haverá nova
paralisação da categoria ... - Veja mais em
https://economia.uol.com.br/noticias/redacao/2018/06/01/caminhoneiros-e-governo-
negam-que-havera-nova-paralisacao-da-categoria.htm?cmpid=copiaecola.” Economia
(blog), June 1, 2018.
Faria, Karla Cristina de Araújo. Dando Um Jeito No Jeitinho. Niterói: Editora Nitpress, 2016.
F10. IMPOSTOS E REGIMES TRIBUTÁRIOS NA PRÁTICA, n.d.
http://www.f10.com.br/pdf/imposto_ebook.pdf.
“Greve Dos Caminhoneiros: Entenda O Movimento Que Parou O Brasil.” July 16, 2018.
https://economia.estadao.com.br/noticias/geral,perguntas-e-respostas-sobre-a-greve-dos-
caminhoneiros,70002319904.
Kelm, Orlando R., and David A. Victor. The 7 Keys to Communicating in Brazil. Georgetown
University Press, 2017.
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 26
Marreira, Flávia. “Marielle Franco, vereadora do PSOL, é assassinada no centro do Rio após
evento com ativistas negras.” el país (blog), March 15, 2018.
https://brasil.elpais.com/brasil/2018/03/15/politica/1521080376_531337.html.
Plano de negocio, Juliano Cortes, Sandra Schuster, Flávio Pigatto, 2014, Tipo Empresa: Empresa
nascente.
Sorosini, Marcela, Letycia Cardoso, Glauce Cavalcanti, and Bruno Rosa. “Com Greve de
Caminhoneiros, Supermercados Ficam Sem Estoque E Preços Disparam Na Feira.” O
Globo (blog), May 23, 2018. https://oglobo.globo.com/economia/com-greve-de-
caminhoneiros-supermercados-ficam-sem-estoque-precos-disparam-na-feira-22708506.
BRAZILIAN INTERNSHIP WITH PET WELLNESS COMPANY 27
Acknowledgements
A special thank you to the following people and groups:
Docg, the employees in the Curitiba Headquarters, and the employees at the store
My advisor and committee member, Dr. Gendreau and Dr. Risner
Heitor Kator for connecting me with Docg
The Department of Latin American Studies for funding this opportunity
The University of Florida
My parents, Angelia and Nicholas Hamilton