Stephanie Muñoz Rivera 6124746 January 28, 2018 Case: The BRICs: Vanguard of the Revolution In this case we see the emerging economies, the so called BRIC’s. This group is composed of the following countries, Brazil, Russia, India and China. Currently in combination they represent about 18 percent and world GDP. And this ?gure in the future aims to grow by 25 percent, and by 2030, about one-third. Without a doubt as it tells us the book the BRIC are the larger market emerging. But despite having good success or a good market these lead indicators of patron of consumption. These last years this countries were with a terrible economy where speculated that these reach or exceed the countries richest would take years or up to the year 2050. However due to the global crisis they accelerated the process of growth of its market, almost surpassing the most richest countries in the world. Despite the great progress that had the BRIC’s the countries that compose it struggles with it’s particular problems like the global warming. But although the BRIC’s have future problems, its members are looking for options to resolve them. For example, we have India and China which formed an strategic alliance in order to end the border disputes and boost trade. Also the BRIC’s are taking steps to dethrone to the US dollar, making decisions such as stop using it in Business transactions. In conclusion, with the progress that the BRICs are having in these recent years and the next to come, we see that the new global economy has begun, and that many countries will seek to be part of the evolution. !1
1. Estimate the likely market evolution of the BRICs over the next decade. What economic indicators might companies monitor to best guide their investments and action? As mentioned in the sypnosis, according to the researchers, the BRICs may be the creators of the future global economy. In my opinion if they still have the great progress they have had so far, in a few years they would one of the best economies in the world. Therefore, this would be a great attraction for companies wishing to invest and be a part of this new development. Because when companies want to invest in a country they begin looking at the GDP growth rate in the country, so they can have an idea of the ?nancial status of the population. In addition to the GOP, investors seek on the Human Development Index. They also informed themselves with the laws of these places, to avoid future problems with their business, policy, etc. And ?nally the investment companies look for the Purchasing Power Pority. 2. Identify three implications of the emergence of the BRICs for careers and companies in your country. If United States continued or improved for better, the process and plan the BRICs used to get forward with their economy which was in poor condition, this country would get a large market because of our population, resources, and people willing to work in these companies. So we as American citizens bene?t and those of other countries like China, India, Brazil and Russia also bene?ts. Since they could come to look for opportunities for work, education, etc. Thing that would bring more consumption the market making this progressed. And who knows, if we get the same or best merits that the BRICs countries, or in the future we could be part of their economic evolution. 3. 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? Yes, I think recency bias have lead to overestimating the potential of the BRICs, since it is believed that the trends that led to the BRICs to a progressive economy are here to stay, fact that for years is shown to us otherwise. By this I mean that the economy is something that changes every day and is not entirely stable and reliable. So I as a manager of a company assessing these markets, would propose many plans for innovation, using which currently have made progress in the economy, innovate them so that in the future they work in a successful and effective way. In such a way that the company would have control of this bias. !2
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4. 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? In the BRICs group the book mentions us how the India market is one of the most poor consumers despite being one of the most popular in the world, and this is due to the ?nancial status of its citizens. As a Manager you should look at and study the population of consumers so you would know in what prices you will sell the product, in a way that consumers can afford it and the company continues to grow earnings without losing so much money. So this lets us know that the potential in these markets is to have several price ranges that hoard to all social classes in the country. 5. In the event that BRICs fail to meet project performance, what would be some of the implications for the international business environment? In case that the projected performance of the BRICs fail, would be a big step back for the International Business, since investors will lose their pro?ts, markets, companies, etc. So they will feel cheated and all thanks to the recency bias. If this happens many people will lose their jobs, and for the second time the international business will suffer a crisis that would take years to get out, because for the investors the market will be an unstable one, and who would risk their money in a market that is unstable? very few or none. 6. Compared 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. According to the research carried out on the web, the GNI has improved by almost all the countries that comprise the BRICs. However the Net National Product and Your Better Life Index has not improved at all the BRICs countries, this not worked very well in India and Brazil. Unlike China and Russia than this you served as help to improve.!3
