Question A
The evolution of the BRICs shows the rise of the main emerging economies in the world. The countries involved are putting effort towards building a fair and reasonable global financial order and solving difficulties that may hinder their development. China has been the leading country in manufacturing factories. Brazil has a large raw material base. Russia produces large quantities of oil. BRICs held their third summit in April, 2013. Their main agenda were global economic and financial affairs and issues that would promote development and cooperation among the BRIC countries .
Companies ought to monitor their competitive position in the market or industry in order to guide their investments. Competition plays a very fundamental role in the performance of a company. Every company should employ strategies that will help improve its competitive position in the industry. In addition, the companies should monitor their chances of attracting foreign investments. A company that is able to attract a high number of foreign investors is performing well. The number of foreign investors can help to provide an indication of how the company is performing. An inflow of foreign direct investment helps to improve the growth and stability of a company. The companies should also monitor the rate of employees’ turnover. China and India will be the global suppliers of the already manufactured goods and services. On the other hand, Brazil and Russia will be the main sources of raw materials.
Question B
The emergence of the BRICs is likely to lead to an increase in employment opportunities. Their emergence involves the creation of industries and other employment opportunities. From the case study, China, by 2020, will have a very high number of old and very old people in the world. This implies that the country will require a workforce from other countries in order to replace the aging population. Russia is experiencing aging and declining population. The case is similar to China. In order to continue improving their economy in the future, they will require human resource to undertake tasks in their factories. There will be high employment opportunities due to the emergence of the BRICs.
The companies will experience a decline in their foreign investment. Companies operating in the four BRIC countries will receive attract foreign investors. This will lead to a reduction in foreign investment, in other companies operating outside the BRIC region. The companies in BRIC region will be open to trade and capital. Companies operating in the BRIC region will create monopolies. This will lead to collapse of the domestic industries in the country .
Question C
The managers should evaluate the GNI per capita and the purchasing power parity of a country. This will help to measure the potential for their product or commodities in the market. The GNI per capita helps to measure the wealth of a country. The purchasing power parity helps to measure the ability of the residents in a country to purchase commodities. In case of inflation, the purchasing power parity may be low. In addition, the managers may measure the potential for their commodities using the Human Development Index. The index helps to measure the life expectancy average of individuals, the level of education of people and their health status. The High Human Development Index will increase the demand for the products in the market. A combination of the three measures helps to interpret the potential for products in the market. The level of inflation in the country can help to interpret the performance of the product in absolute terms. In case there is high inflation, there will be low demand for the company products. The degree of competition will have a significant impact on the product.
Question D
International business will not grow as fast as it would have grown in case the BRICs meet their projected performance. It is probable that there will be an increase in trading activities across the world in case the projected performance is met. It is also expected that there will be a decline in the role of US dollar, in the future. However, the dollar will continue to have a significant role in the trading process between the countries. The role of the dollar in the international business will not decline. The problem of recency bias in the international business will continue into the future. There will be distorted income distributions in the international business.
Question E
GNP per capita is a measure of wealth of a country. It measures the market value of all the final goods and services which are domestically produced by the country’s own resources in a given year. The GNP per capita is significant in measuring the present personal wealth and the consumption patterns. Countries with high population such as India have a low GNP per capita since the majority of the population is poor. Hence, GNP per capita cannot provide a good measure of economic potential in BRICs. Purchasing power parity is an assessment of the number of units of a country’s currency which are required to purchase a similar amount of commodities and services in the domestic market in comparison to the international market .
Work cited
Beausang, Francesca. Globalization and the BRICs: Why the BRICs Will Not Rule the World For Long. London: Palgrave Macmillan, 2012.
Jain, Subhash C. Emerging Economies and the Transformation of International Business: Brazil, Russia, India and China (BRICs). New York: Edward Elgar Publishing, 2006.
José Eduardo Cassiolato, Virgínia Vitorino. BRICS and Development Alternatives: Innovation and Policies. London: Anthem Press, 2011.
