BRIC PAPERBRIC Country Assessment AnalysisBRIC refers to Brazil, Russia, India and China. The term BRIC was created bythe Chief Economist of Goldman SachsInvestmentBank in 2001 and is nowwidely used...

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BRIC PAPERBRIC Country Assessment AnalysisBRIC refers to Brazil, Russia, India and China. The term BRIC was created bythe Chief Economist of Goldman SachsInvestmentBank in 2001 and is nowwidely used in business and academia to refer to the four countries that arelikely to have a profound impact on the global economy and businessenvironment in the twenty first century. As part of the globalization theme ofthis Strategy Seminar we want you to become familiar with these countriesand their potential role in corporate global business strategy.• For a more recent commentary on the BRIC countries view thefollowing: Goldman Sachs | BRICs Videos and StoriesExamine each of the BRIC countries to determine their projected economicgrowth, country business environment and country risk. We have gatheredassessments of the Country Risk and Business Environment (Opportunity)from the Economist Intelligence Unit database in the UMUC library. Theseassessments are posted as EIU BRIC Country Assessment Ratings in CourseContent.BRIC COUNTRIESBRAZILEconomistIntelligenceUnit,Brazil Economy,Politics and GDPGrowth SummaryCHINAEconomist IntelligenceUnit,China Economy,Politics and GDPGrowth SummaryRUSSIAEconomistIntelligenceUnit,RussiaEconomy, Politicsand GDP GrowthSummaryINDIAEconomist IntelligenceUnit,India Economy,Politics and GDPGrowth SummaryMAN 6726 : Strate gic Ma na geme nt Pg. 12CorporateMBARead the rationale behind these ratings and dig deeper by reading other EIUnews stories about the political, economic, financial, business and regulatoryenvironments in each country.Also, take note of the Personal DisposableIncome(PDI) available in eachcountry as an indicator ofmarket size. (you will find the PDI in the 5 YearEconomic Forecast) , PDI is defined as the income households receive fromfirms, plus transfer payments received from the government, minus directtaxes paid to the government. It is the income that households have availablefor spending or saving.Post the resultant ratings for each country in a summary table comparing thecountry ratings for risk, business environment (opportunity). Add the UnitedStates to the table for comparison purposes. Include a brief summary of themain country conditions that contribute to the ratings.Also create a table comparing the Gross Domestic Product (GDP), thePersonal Disposable Income (PDI), Exports (in U.S. $), and Imports (in U.S.$) for both 2011 and 2015 and calculate the amount of growth for each item.Discuss the following business strategy questions.• How would you tradeoff the degree of country risk versus the businessenvironment ratings, taking into consideration the market size asexpressed by the PDI in 2015?• How would you tradeoff thedegreeof country risk versus the businessenvironment ratings, taking into consideration the market growth asexpressed by the PDI in 2015 versus 2010?• As a result of answering the above two questions, how would youprioritize the BRIC countries in terms of developing a global businessstrategy?Note: Write this up, integrating your answers in a way that demonstrates yourcritical reasoning supporting your prioritization of the BRIC countries.ask a similar question»
Answered Same DayDec 20, 2021


Robert answered on Dec 20 2021
3 Votes
Global Business Strategy in BRIC Nations
Global position
Brazil has become one of the most attractive destinations for foreign direct investment (FDI) among emerging-market economies since 2007. This reflects macroeconomic and political stability, vast market opportunities and a large domestic market.
The country’s stock of FDI totaled US$368.4bn at end-2010, up from US$319.9bn at end-2009. Inflows of FDI recovered in 2010, to US$48.4bn from US$25.9bn in 2009, and exceeded pre-recession levels of US$45.1bn in 2008 and US$34.6bn in 2007.
Monetary policy is to focus on combating inflation
The Russian Central Bank (RCB) left interest rates unchanged at its policy meeting in May. Despite the recent decline in inflation, the RCB remains concerned about a rise in inflationary expectations. This is mainly because of the increase in tariffs in the second half of the year; tariff increases were postponed from January. The RCB continues to move in the direction of a free float of the cu
ency. The effective exchange rate of the rouble against the US dolla
euro basket declined by 0.5% during April, without any significant intervention in the foreign-exchange market by the RCB. The RCB also believes that a repeat of the crisis of 2008-09 would
ing little pressure on the cu
ency, if only because Russian banks now have net foreign assets of US$62bn, in contrast to US$100bn net foreign liabilities in 2008. However, much of the banks' foreign assets could be disguised capital flight and would not be available to the banks in a credit crunch, whereas the liabilities would have to be met in the event of another credit crunch. The Ministry of Economic Development estimates net private capital outflows at US$8bn in April after a US$35bn outflow in the first quarter.
The banking sector remains vulnerable
The banking sector appears stable. According to RCB, it would be better placed to withstand another crisis. Banking profits were reported to be 17.5% higher in January-April than year earlier, at Rb342bn. In April domestic credit to the non-financial sector grew by 2.4% month on month and 24.2% year on year, and credit to households grew by 3.8% month on month and 42% year on year.
The banking system nevertheless remains highly vulnerable to external shocks, according to the recent stress test conducted by the RCB. The results of the test show that slowing GDP growth to 2% and a 15-20% fall in oil prices could cause bank losses of around Rb1.4trn, or 27% of banks' capital. In a worst-case scenario, in which GDP declined by 1.4%, bank losses...

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