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.
BRICs has a great future ahead of it in my opinion. The primary reason is the fact that these countries hold a large chunk of the world population. According to the case study, it holds almost 40% of world’s total population (Daniels & Radebaugh, 2015). Middle class in BRICs countries has emerged with an increased purchasing capacity over the last few years (Kharas, 2010). The other reason that I think is also important to discuss is the fact that all the member countries in BRICs have recognized the potential of each other and have agreed to form a joint group that would help it not only take advantage of each other’s markets, but also make it possible to influence the markets of other economies in the world. BRICs may include more countries to the group in the future to further enhance the capacity of the group. The above reasons suggest that BRICS would evolve in number, capacity and world market share in the next decade.
Companies working in the international arena have to take into consideration many indicators when assessing the market of a potential country for its business. These countries would be observing closely the evolution of the BRICs economies over the time. They would also look at the reports of international financial monitors to assess the financial pointers, GDP growth and the status of human development index in the BRICs countries while making a decision to go into these countries and setup businesses over there.
- Identify three implications of the emergence of the BRICs for careers and companies in your country.
I have no doubt that in my mind that BRICs would have an influence on the economies of many of the world countries as it evolves. Specifically speaking about my country. My country is an oil producing country. Russia is increasing its oil exports day by day. This would not have a good effect on my country as the prices of oil may not remain high due to an access of oil in the international market. The other danger that I think my country would face is from Brazil as it is developing means of generating bio fuel through agricultural means (Balat & Balat, 2009). This again would not have positive effects on the economy of my country and the oil exports of many companies in my country may decrease. The effects on job careers in my country may also not be a good one. The economy of my country may not be able to provide enough jobs due to it being deteriorated. One of the implication that my could go in the favor of my country is that it may try to become a part of the BRICs and take advantage of the huge market that BRICs holds.
- 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?
It is human nature to jump into conclusions with just limited evidence. The same has happened in the case of BRICs, its potential has been overestimated due to recency bias. As a manager, I think that it would be my responsibility to make calculated decisions to help my company not take unnecessary risks. I can do this by looking closely at economic indicators that are presented by many international financial monitoring firms. I can observe the internal politics and economies of the countries closely and how they are responding to international politics. Also how the GDP of each country is growing and how is the annual economic growth responding to it.
- 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?
The pricing policies of different countries may dictate item prices that are not what the consumers may be able to afford. For example, speaking in absolute economic terms, Indian market is very large. But the purchasing power of the average shopper is very low. It is a tricky situation to respond to such kid of market where you see many consumers but not many to purchase your expensive products. The best strategy to respond to such market would be to introduce a product in smaller weight with a decreased price that the actual weight and price.
- In the event that the BRICs fail to meet projected performance, what would be some of the implications for the international business environment?
Due to recency bias, many companies and countries have over-estimated the potential of BRICs countries. Many companies have made their investment in these countries due to this bias. If the projected performance is not resulted in the BRICs countries, this would send a wave of economic uncertainty over the world and many companies may even go out of business in my opinion. It may also severely affect the international trade and job market for many countries.
- Compare and contrast the merits of GNI, Net National Product, and Your Better Life Index as indicators of economic performance in Brazil, Russia, China, and India.
To compute GNI, the money that a country makes from what its nationals send from outside is added to the money that is produced inside the country. NNP is the value of the products and services that are produced in a country. Depreciation is extracted from the value over a certain time to calculated NNP. Your Better life Index, as the name suggests is the overview of the different economic factors of a country and how these economic factors are affecting the lives of the citizens.