Introduction

International relations is a philosophy that fosters the growth and development of nations as well as the promotion of an interactive culture. Each country presents diversity in the culture, economy as well as political ideologies but through international relations’ forums such as World Trade Organizations, the agreements and treaties govern the harmonized platform to practice business. The success of elevated international ties is demonstrated through the successful establishment of international companies in foreign countries.

A good example is SABIC, a Saudi Arabian manufacturing company that produces difference products and include agri-nutrients, plastics in various performance and commodity entities, metals as well as chemicals. The management performance of the company in Brazil is highly influenced by multiple factors both internal and external factors. The political dynamics of Brazil play a significant role in the determination of the profitability of the business. This report aims at discussing the various opportunities, challenges that SABIC faces as an international manufacturing company in Brazil.

SWOT Analysis

SABIC as an international manufacturing company, commands a vast leadership ideal in the market of fertilizers, glycols, thermoplastics as well as methanol. These large productions of materials contribute to the customer confidence in the unique purchasing demands from the company’s goods and services. In addition to the customer base, the economies of scale have led to the acquaintance of efficient technologies globally that focus on upgrading the performance levels of the manufactured goods to enhance a differential market experience (Alotaibi, 2015). Finally, the company strongly upholds its functionality due to the significant support from the government of Saudi in all aspects of a company’s policies.

The achievement of operating on a global scale presents quite some weaknesses for the company. This is because of the dynamic nature of the rules and regulations of the different states thus rendering to the emergence of such issues as a tensed relationship with the diplomatic nations due to the taxation and business licensing variable charges. As a result of the turbulence in the deals, the company obtains a weaker chain of supply within the countries (Alotaibi, 2015).

As much as the international companies are presented with weaknesses, the phenomenon showcases as a double-edged sword, and the companies are offered opportunities as alternatives for the failings. One of the possibilities is the capacity to develop joint ventures as a means to dilute the operational business conditions that render turbulence statuses. This is the strategy of building up a business in a foreign country through the local shops and promote the growth aspect in business operations on an economic scale. Another opportunity is the benefits of the economies of scale. An internationally based company operates upon optimal efficiencies and effectiveness and hence the ultimatum for sustainability in the quality of production as well as the products (Alotaibi, 2015). A good example is the manufacturing of a high-quality fertilizer that does not endanger the healthiness of the crops but aims at improving its quality as well as the conditions of the soil in the farmlands.

Threats posed to SABIC are variant but mainly include the political status of the foreign countries, the liabilities that accompany global environmental issues as well as the emerging competitive market. SABIC deals in manufacturing of chemicals and the residue wastes pose great danger depending on the methods of disposal. Improper disposal of the waste materials causes pollution including the accidental leakages that can occur. This is a threat that can cause the company to loss millions of profits and the reputation with the diplomacy in hand since it is a harmful act (Alotaibi, 2015). On the other hand, the instability of political climate within a foreign country can pose a high risk to the profitability of the business because insecurity becomes a challenge and violence leads to the death of the laborers to some extent as well as the risk of the destruction of SABIC properties.

Finally, over the years other emerging competitors have increased the scale of competition, and some of these companies include Reliance industries, Braskem SA, Lyondell Basell Industries and Mitsubishi Chemical Industries. Although SABIC is a company that commands a vast market demand, the technological advancement and the improving international business climate conditions present competitive advantage opportunities to the competitors and hence the need for product and service differentiation strategies.

SABIC Challenges in Brazil

Political instability presents challenges to the business climate in the country because of the uncertainty persists. In the year 2016, the Brazilian president Dilma Rousseff was impeached, and the current president was elected, that is, President Michel Temer and the political change was accompanied by dynamic approaches in the rules and regulations that affected the entire economic system of Brazil (Cui et al. 2016). However, the diplomatic relations between Saudi Arabia and Brazil progressively improved even with the political instability and thus the protection of the SABIC regional business in Brazil. In addition to the change of political ideals, the country poses challenges to SABIC because of its maturity levels in terms of the power of consumers, the investment prospects as well as the regulations. Brazil is a developing nation, and as much as it can host international sports, the economic base is still growing and SABIC interlocks in the ideology of the growth with the opportunities and the challenges presented. Another ideal issue is the bureaucracy status of the country. This is to postulate that SABIC encounters the problem of adhering to costly regulatory measures that include the payment of the various taxes to the government as well as the hurdles of conducting business upon the legal platforms. The regulatory framework of Brazil is considered inversely proportional to the economic growth with the additional inclusion of specific issues such as the increased rate of corruption hence affecting the transparency required in the corporate sector of Brazilian industrial base (Cui et al. 2016). The advantage of conducting business is the presence of proximate and efficient infrastructure such as the road networks and the electricity grid accompanied by the introduction of advanced technology with support from Microsoft. Ideally, SABIC in Brazil has been productive because of the persisting diplomatic relations that promote an optimal climate for business.

In conclusion, international relations are important because they seek to promote growth and development in all aspects. In one point, foreign investors increase the income flow within the country; additionally, they create employment opportunities as well as contribute to poverty alleviations. On the other hand, the growth of the company’s operations contributes towards the growth of the economic status of the host country, in this case, Saudi Arabia. SABIC is a practical example of the resultant international relations thus recommending the intense build-up of the diplomacy to foster the uniformity in globalization effect.

References

Alotaibi, H. J. (2015). An assessment of the connection of elements in a strategic plan: a case study of SABIC company. International Journal of Advanced Research in Management and Social Sciences, 4(10), 19-36.

Cui, Y., Jiao, J., & Jiao, H. (2016). Technological innovation in Brazil, Russia, India, China, and South Africa (BRICS): an organizational ecology perspective. Technological Forecasting and Social Change, 107, 28-36.