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Analysis of the BRICs economy Essay

a) Map the likely evolution of the BRICs. What indicators might companies monitor to guide their investments and actions?

Answer:

The BRICS are distinguished by their large, fast-growing economies and significant influence on regional and global affairs. As of 2013, the five BRICS countries represent almost 3 billion people, with a combined nominal GDP of US$14.8 trillion, and an estimated US$4 trillion in combined foreign reserves. The BRICS countries encompass over 25% of the world’s land coverage and 30% of the increase in global output during the period. It demonstrates that the BRICS has the huge number of the human resources and land resources that attract a lot of investor come to these five countries to seek investment opportunities and market equities. As a result, the overseas company’s monitors want to gain the best profit and the less risk, they can rely on some important of the financial indicators. For example, the Cross National Income, Gross National Income for per capita, foreign exchange rate and the amount of export and import. In addition, they also need consider the human development index. For example, they need to consider the government’s policy of the overseas company and the local culture and economic.

b) What are the implications of the emergence of the BRICs for careers and companies in your country?

Answer:

China is increasing their economic much faster and it also has a very important position in the world. China has the largest manufacturing countries in the contemporary world due to the great natural and human resources, and it attract a lot of foreign company to expanse their business. But for now, because of the BRICS country’s impact, china can easily get the resources and technology from other BRICS countries. China gradually began to change their industry pattern from manufacture to independent research and development production. With the development of the level of education in the last few years, china has a large number of professional talents to help the company to research and development of new products. The BRICS help companies to get some resource from other BRICS country easily and increase a lot of chance to get technical communication.

c) 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 to very poor consumers?

Answer: All the BRICS countries are developing countries and the investor need to face a majority of low-income consumers. These consumers do not have high consumption ability and only focus on the bottom of market consumption level. For the managers, they need to have a good idea of the real business environment and the consumer groups that they will contact. In addition, they also need to pay attention to the potential market to low-income consumers. The company need to according to the features of these groups to position their products. These groups of consumers do not have a lot of money to buy things and only buy some things that they really need and wanted. So the company have to put more attention on their product’s price performance ratio and functionality, and not like the products for the high consumption that need pay more attention on the appearance of the product. The managers also need to help companies to adjusting internal business strategies to adapt new environment. The new country have the different cultural and environment, so they need to project a marketing strategy to attract these groups of consumer. Furthermore, the consumer can help their company to get partnership with some Non-profit Organizations, and it will help to improve the reputation of the company and the effect of the product.

d) In the event that the BRICs fail to meet projected performance, what would be some of the implications for international business?

Answer: The aim of forming the BRICS is helping the developing country to increase more communication and promote the world peace, in order to help BRICS countries to increase the growth of economies. If the BRICS fail to meet projected performance, and it is mean that the BRICS country’s performance is facing some problems. The economic environment as gross national income, purchasing power parity, human development index and per capita income will be affected. In addition, the performance will be affected by the employment rate, debt, education and GDP relative indicators. Therefore, the BRICS need a strong political institution to have the fairness, patency and preciseness for the international business. On the other hand, the BRICS countries need to make their trade more open to attract more foreign investment, and get more the capital flows. The government should also cooperate with companies, in order to get the best business environment. e) Compare and contrast the relative merits of GNI per capita versus the idea of purchasing power parity, human development, and green economics as indicators of economic potential in Brazil, Russia, China, and India.

Answer: The GNI per capita a first step toward understanding the country’s economic strengths and it reflects the average income of a country’s citizens. The purchasing power parity is an economic theory that states residents of one country should be able to buy the goods and services at the same price as residents of any other country over time, and it is also a calculation that determines how much things would cost if parity did exist. To calculate GNI, analysts look at the total value if goods and services produced within a given time period, such as a year. However, analysts also evaluate things produced overseas that add value to the nation, looking at what residents produce regardless of where it’s located.

For purchasing power parity calculations, analysts look at purchasing power by nation, recognizing that simple currency conversions don’t account for inflation and other factors, they convert to a uniform hypothetical international currency, looking at what a dollar’s worth of that currency would buy in any nation around the world. The unman development index is a summary of human development around the world and implies whether a country is developed, still developing, or underdeveloped based on factors such as life expectancy, education, literacy, gross domestic product per capita. And a green economy is one that results in improved human well-being and social equity, while significantly reducing environment risks and ecological scarcities.


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