Case Study: BRICs Vanguard of the revolution closing case
- Estimate the likely market evolution of the BRICs over the next decade. What economic indicators might companies monitor to best guide investments and actions
There are many spiculations about the future of BRICs. Most of the researchers and economic experts are confident for the last few years that BRICs would be a success story of the future. BRICs is considered to be the builder of future global economy by some researchers (Cheng, Gutierrez, Mahajan, Shachmurove & Shahrokhi, 2007). Looking at the present evidence and the successful progress of the BRICs which now constitutes of 5 countries including Grazil, Russia, China, India and South Africa, I would suggest that it’s going to dominate the coming decade.
When companies are thinking to invest in a country, they would usually use a multiple factor analysis of the country economic and social conditions. Investors look at the GDP of the country to decide what kind of financial status the citizens of that country. Then they look at the business rules and regulations put in place by the host governments. Then is the security status of the country.
- Identify three implications of the emergence of the BRICs for careers and companies in your country?
BRICs is an association of the five emerging economies of the world. Two of the BRICs countries possess 40% world population meaning a huge consumer market. When I look at what BRICs means to my country, I can predict a rich market for the investors of my country. Especially in the telecommunication market where my country already has international investments. Then is an opportunity for the middle class educated people of my country to look for jobs in the companies from my countries that invest in different sectors in the BRICs countries. My country can even try and become a member of the BRICs if it is ready to accommodate more countries in the future.
- Do you think recency bias has led to overestimating the potential of the BRICs? How would you, as a manager for a company assessing these markets, try to control this bias?
In general terms, recency bias refers to the influence of the current experience regarding a product or service on the expected outcomes of the future quality of the same products and services (Johnson & Mathews, 1997). From a broader view point, we can observe that the world has high expectations from the future of the BRICs countries and yes, I is contributing to a recency bias in my opinion. As a manager I believe that I can control recency bias by conducting a comprehensive research on the future economic indications of the BRICs countries. I can look into the GDP growth on continuous basis and predict the behavior of the market and economies of the BRICs countries.
- How might managers interpret the potential for their product in a market that is, in absolute economic terms, large, but on a per-capita basis, characterized by a majority of poor consumers?
Indian market is marked as one of the most populous and economically growing market. There ae still many people below the poverty line but the volume of the market is still good enough to attract international investors. Same is the volume of the Indian neighboring country, Pakistan that is high in volume but due to its security conditions, it is not considered a safe place to invest in yet. Managers would therefore be most probably tasked to interpret the potential of the Indian market if we compare the two markets as the first step before investors would invest in a country is to assess the security status of that country. Managers can look at introducing products with multiple price ranges that attracts all classes of India or alike countries e.g. upper class, middle class, lower middle class and the lower class.
- In the event that the BRICs fail to meet projected performance, what would be some of the implications for the international business environment?
I think that it is obvious that it would not be a great sign for the international economy. International investors would be badly affected by the failure of the BRICs countries. Stock market shares of many companies would fall. The international business environment will be taken over by a lack of stability and doubt.
- Contrast the merits of GNI, Net National Product, and Your Better Life Index as indicators of economic performance in Brazil, Russia, China, and India
In the Brics countries, the GNI is increasing for all most all the countries as they have money produced inside the countries and also money coming in from the international market due to their increasing share in the international market. Net national Product and Your Better Life Index has improved in China and Russia but there are still concern about India and Brazil.