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Medium Market Entry

Highway To Hell

#Transportation
ProHub Comment

This case tests market entry strategy by combining geographic analysis, operational economics, and financial modeling. The candidate must synthesize qualitative factors (ease of doing business, political stability) with quantitative analysis (ROIC and payback period) to justify choosing greenfield investment over M&A despite higher upfront capital requirements.

Estimated Time 15 minutes
Difficulty Medium
Source Wharton
50 / 100
BuildCo, a leading Brazilian highway construction company is looking to expand internationally. Economic growth in Brazil has stalled, and in order to continue to grow both top-line revenues and bottom-line profitability, the client wants to diversify its portfolio and decrease its exposure to the Brazilian economy. What factors should the client consider as it thinks through its international expansion options?

Clarifying Information

  1. BuildCo operates only in Brazil, and have scoped opportunities in South America. Their staff speaks primarily Portuguese
  2. The client currently only focuses on building and operating public roadways
  3. BuildCo primarily wants to diversify its revenue. It has no specific goals on revenue or ROI
  4. The clients’ customers are always municipal, state, or national governments. They bid, usually through competitive RFPs
  5. While BuildCo wants to consider all geographies, they have a bias towards opportunities in South America