Research why the BRIC markets may become less advantageous international markets.

 

Evaluate marketing strategies of multinational corporations.

Finding New Global Opportunities

In the early 2000s BRICs — Brazil, Russia, India and China, were all the rage when talking about global expansion. Today these markets may not be the sure things they appeared to be when Goldman Sachs Asset Management coined the term BRICs a decade ago.

Remember that the discussion takes place over two weeks and your weekly posts must be made in the specified week to earn credit.

WEEK 7 MAIN DISCUSSION POST:

Research why the BRIC markets may become less advantageous international markets.

  • Present at least one internal factor in each country that may be leading to its less preferred global status.
  • Discuss at least one external factor for each country that may lead to a downgrade in its status

Your analysis must be substantiated by research from professional and graduate-level resources such as the course text AND articles from the library’s full-text databases. Use of consultant or other inappropriate sites is banned and may result in a zero for the assignment. Since you are engaging in research, be sure to cite the source(s) in APA format.

 

 

WEEK 7 INTERACTIVE RESPONSES:

Interactive Reply 1:

Select one student’s post regarding internal factors. Critically assess them for validity. Be sure to back up your evaluation.

Geremy

DB4

I believe that each one of these countries has one thing in common that is affecting them, that would be the limited diversity of population. While there is diversity in these countries, there is not a lot(Movchan, 2015) .

The most important reason for the growth slowdown is the ever-worsening economic situation in Europe, followed closely by the general lack of economic leadership and market confidence coming from the aging industrial countries(PUTNAM, 2012) .

In Brazil, one of the things that is hurting their economy is the depreciating currency. When your currency depreciates, it has positive effects on the country’s exports while having a negative effect on the imports(PUTNAM, 2012) .

Brazils external factor is the European economy, the European economy has a debt crisis that affects the BRICS countries. The European debt crisis lost about 95 against the US dollar. With the decrease against the US dollar, you will find that investors see this as a negative thing. This lowers the investments from foreign companies and people(PUTNAM, 2012) .

Russia has an issue with Vladimir Putin and his policies internally. Vladimir Putin is afraid to go abroad for many things because he is afraid of a regime change. He believes that the people will want to elect a new president if he takes his focus away from strengthening the local economy by focusing on international issues. His lack of motivation to go abroad is a struggle because he needs the assistance of other countries to bring his country around(Gregory, 2015) .

Russia’s external factor that is affecting their rise in the economy is the sanctions enforced by the United States. One of those sanctions is the ability to borrow money internationally. With the country, not able to borrow a lot of money internationally, they are trying to sustain the country on all money from inside the country. This leaves them at a disadvantage because there is not a lot of money coming into the country by foreign investments and foreign buyers(Gregory, 2015) .

India’s internal issue is with inflation. Inflation is a concern for companies and individuals looking to invest because if they buy or invest in something while the inflation is high, they will lose money when the inflation comes down(PUTNAM, 2012). This is negative because investors do not want to invest until the value comes down so that they do not lose money. They want to invest when the value is low so that when inflation hits, they can make money if they sell.

An external factor that affects the Indian economy because of the oil prices. It looks that if the government of India is trying to cut oil subsidy spending by lowering the subsidies that they give to companies throughout the country(PUTNAM, 2012) . They are doing this because the country is trying to make more money from the oil industry abroad.

China’s internal factor affecting their economy would have to be the housing crisis. The housing crisis in China was started when it became like a banking savings. A lot of wealthy Chinese investors bought many homes to rent and lease out to the population(PUTNAM, 2012). The government started getting worried about a housing bubble and they increased the down payment required, a price ceiling on new homes, and created new property taxes(PUTNAM, 2012) .

Weak external demand from the European Union (EU) is a strong factor aggravating China’s growth in 2012. EU imports of Chinese goods fell by 3% in the first quarter of 2012 compared with the same period in 2011. The EU accounts for almost 20% of China’s total exports, and further declines are quite likely given the economic distress in Europe. But it is not just falling demand from the EU; annual growth of total Chinese exports in 2011 was 20.3%, while annual growth for 2012 is expected to be less than 10%(PUTNAM, 2012) .

References

Gregory, P. R. (2015, May 14). A Russian Crisis with no end in sight, thanks to low oil prices and sanctions. Retrieved from Forbes: https://www.forbes.com/sites/paulroderickgregory/2015/05/14/a-russian-crisis-with-no-end-in-sight-thanks-to-low-oil-prices-and-sanctions/#7cb2710011a5

Movchan, A. (2015, July 8). 5 factors limiting the impact of the BRICS nations. Retrieved from World Economic Forum: https://www.weforum.org/agenda/2015/07/5-factors-limiting-the-impact-of-the-brics-nations/

PUTNAM, S. A. (2012). BRIC Country Update: Slowing growth in the face of internal and external challenges. Chicago: CME Group.

Interactive Reply 2:

Select another student’s post regarding external factors. Critically assess them for validity. Be sure to back up your evaluation.

The two interactive posts should be substantive in nature and showcase mastery of the concepts and your professional marketing and business communication skills. Apply your knowledge. Do not simply state that it is a good or bad idea, specify why and be detailed in your explanation.

In your own words, please post a main discussion post and comment on at least two other postings (interactive responses). You will be graded on the quality and interactivity of your postings. Use of unoriginal text and excessive quotes indicates a lack of comprehension and shows that you may not have mastered the concepts.

Marilyn Basden

Unit 4 DB

Internal and External Factors for BRIC

Brazils’ internal factor is their dependency upon exports which makes the currency stronger, cheaper imports, and this dependency makes for expensive

manufactured goods.  However, for Brazil to obtain sustainable growth they will need to have internal reforms which would increase productivity as well

as enable them to achieve economic freedom.  Brazil is also stuck in the miIDle ages which is cause for high worker turnover due to rigid labor codes and

regulations (Scissors, Roberts, and Schreiber, 2012).

Brazil’s external factors include currency depreciation which is the cause of inflation and the increase in imported goods and production.  The weakening of

currency will cause the global economy to become stagnant or slow moving as well as cause interest rates to fall to extremely low rates (Azzarello and Putnam,

2012).

Internal factors that affect China is environmental degradation and extremely high levels of pollution.  These are factors that is responsible for public health

problems which are the cause for a variety of citizen reactions such as mass migration, social unrest, and social resettlement.  The Chinese are moving to regions

with less pollution and better water resources, due the China’s inability to develop effective resolves (Economy, 2003).

China’s external factors include the decreasing demands on imports to the European Union from China.  At one point China was exporting nearly 20% to the

European Union and those totals have dropped below 3% and continually falling due to Europe’s economic distress.  China has also been affected due to their central

government putting a ceiling on new homes, they increased down payment requirements and created new property taxes.  These drastic changes caused a large

supply of property that are on the market and is causing negative effects on the economy (Azzarello and Putnam, 2012).

Russia’s internal factors include that of inefficiencies in the government which attributed to corruption.  Russia ranks among the highest of countries that is considered

to be corrupt including Togo and Uganda.  The corruption in Russia is used to maintain control and stability over the economy’s productive processes (Rapoza, 2013).

Russia’s external factors include a weakening economy, high tariffs and increased food prices which are the result of Putin run government.  Russia is also suffering in the

export of fuel and oil due to challenges of developing trad-offs between oil and gas.  Countries such as the United States, China and the MiIDle East has the ability to pro-

duce natural gas will cause Russia to have a limitation on their ability to sell as much gas as they had in the pass (Azzarello and Putnam, 2012).

India’s internal factor is that the economy is stagnant, the poverty level is high as well as citizens with poor health.  The poor health of India’s citizens was attributed to manu-

facturing facilities that operates to create jobs and economic growth.  The country is so poverty stricken that their leaders have considered handing out cash as a way of re-

ducing poverty in the company (Clifford, 2017).

India’s external factors is the infrastructure which can be a hindrance to the growth of the economy.  The roads are jammed with traffic and are in poor condition.  Due to the

insufficient infrastructure, it is hard for new businesses to enter the Indian market as well as the expansion of businesses that already exist in the country.  The roads are not

suitable for large vehicles such as big truck to travel on (Lewis, 2012).

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