A Case Study of:

Meet The BRICs'

SUBMITTED TO:
Ms. Sadia Akhter
Chairman of Marketing
Faculty of Business Administration

Presented By:
APPLES FOLLOWERS
Rocky Mallick

ID# 0817112511

Munmun Das Payel

ID# 0817112520

Md. Istiak Kabir

ID# 0817112578

Hasnatun Nahar

ID# 0817112489

Ridwana Habib

ID# 0817112493

Meet The BRICs

Introduction
The BRIC countries, Brazil, Russia, India and China, while

much larger in scale and scope than other emerging

markets, symbolically represent trends that are developing
throughout the world
Over the next few decades BRIC will become a larger,
powerful force in the world economy .
China and India will be the dominant global suppliers of
manufactured goods and services, while Brazil and Russia
will become the principal suppliers of raw materials.
Collectively, they will become the largest entity on the
global stage

Russia
President
Vladimir Putin

Brazil
President
Dilma rouseff

China
President
Hu Jintao

India
Prime Minister
Manmohan Sing

Basic Information on BRICs Countries

Top Ten worlds Largest Economies

Questions
1. Map the proposed sequence of evolution of the BRICs economy.

What indicators might companies monitor to guide their investments

and organize their local market operations?
2. What are the implications of the emergence of the BRICs to careers
and companies in your country?
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?
4. How might managers interpret the potential for their product in a
market that is in the absolute large but on a per capita basis
characterized by many poor consumers?
5. In the event that one BRIC country, if not all, fails to meet its
projected performance, what would be some of the implications to
the economic environment of international business?
6. What are the relative merits of GNI per capita versus the idea of
purchasing power, human development, and green economics as
indicators of economic potential in Brazil, Russia, China, and India?

Question 01. Map the proposed sequence of evolution of the BRICs economy.
What indicators might companies monitor to guide their investments and
organize their local market operations?

Ans : The BRICs economies are on the verge of the rapid growth of

their consumer markets.

It is expected that within a decade or so, each of the BRICs will
show higher returns, increased demand for capital, and stronger
national currencies.
Experts forecasts that the most dramatic transition will
take place over the next 20 to 30 years.

Proposed sequence of BRICs, 2010

Country

Rank in
World

GDP in PPP
US $

GDP US $

Share in
world GDP
2010

Per capita
US $ in
2010

Brazil

2,172

2,090

2.9

10,816

Russia

2,223

1,465

3.0

10,437

India

4,060

1,538

5.4

1,265

China

10,086

5,878

13.6

4,382

South Africa

26

824

357

0.7

7,158

Some Indicators that might guide local market

To appreciate the importance of the economics

analysis.
To identify the major dimension of international
economic analysis
To compare and contrast the economy of local market
To profile the characteristics of the types of economics
system.
To discuss the idea of economic freedom.
To profile the idea ,drivers and constraint of economic
transition.

Question 02. What are the implications of the emergence of the

BRICs to careers and companies in your country?

Responses will vary according to the level of economic

development and the economic basis of our country.

Industrialized nations may feel challenged and express
the fear of a decline in their standards of living due to
increased pressures in the labor market .
The declining cost competitiveness of their countries
firms.

Emerging Markets-Opportunities

Increased foreign direct investments

Huge investments in infrastructure
Huge middle class boosting demand
Abundant supply of educated cheap workforce
High potential for outsourcing work specially India.
High growth rate.
Disinvestments
Domestic/global mergers/acquisitions
Technology up gradations
Abundant agri /mineral resources
Commodity markets expanding fast

Emerging Market- Challenges

Volatile markets
Natural disasters
Steep increase in energy cost
Weak infrastructure
Unstable macro-economic policies
Slowdown in FDI/increasing interests in USA
Setback in rain dependent agricultural sector bring

down GDP growth rates

Currency appreciation for export led economies

Question no 03. 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?

Ans : Recency bias is the delusion that current trends will

continue indefinitely and uninterrupted.
History shows great mistakes made by companies,
executives, investors, and officials who inferred the present
into the future.
The possibility of an economic natural disaster, a largeimpact, impossible to predict, rare event beyond normal
expectations-such as the collapse of the Soviet Union, the
emergence of the Internet, and the global financial crisis.

 In order to evaluate the BRICS there are also several

practical threats.
Recency bias the natural tendency to weight recent events
more heavily then earlier events that are just as statistically
relevant a common trap in risk assessment.
Green constraints shadow the bright futures of all. the
emergence of the BRICs will challenge the well-being and
sustainability of the global environment.
Global warning, diminishing raw materials, and escalating
pollution suggest there is a finite limit.
BRICs can develop before exceeding the capacity of the
global economy to supply them and of the environment to
support them.

Question no 04. How might managers interpret the potential for their product
in a market that is in the absolute large but on a per capita basis characterized
by many poor consumers?

Ans :- when manager interpret their product in potential

economy of rural area/state there too many obstacle.

At first they may have competitor/the product is not

affordable for that areas consumer.

Second problem is transportation problem, because
this type of country facing grassroots development in
certain state.
Thirdly one political barriers, this type of rural state
especially have corruption, superstitious, religions,
culture.

If manager have knowledge about this and

the solution is given below:
Judging local public participation like making community

and take decision among them.

After that price of that product, whether it z affordable for
them/not. if not then price of that product can be
discriminate by diminishing the quality of that product.
If there z competitor then they have 2 earn their profit at
B.E.P. and also giving distribution channel to local areas
people and also recruit them. so the income of that may
increase.
Giving them training (operating machinery, tools ,vehicle.
If the plant z set up, the transportation problem will be
solve.
At the end government interests will increase tax will be
favorable.

Question no 05 .In the event that one BRIC country, if not all, fails to meet its
projected performance, what would be some of the implications to the
economic environment of international business?
Ans :-Emerging countries growing rapidly year by year could not avoid
the evils of worldwide recession.
Impact on BRIC Countries - (Brazil, Russia, India and China)
BRICs will face the different negative impact.
The economy of each country will close to reach the mature mode.
The US GDP based on PPP share of world total shrunk slowly after the
year of 2000.
The stock index fell in an accelerated manner. During the six months
from May to October 2008.
Real estate prices continuously declined.
Money supply and loan supply growth rate continued to fall

BRICs Impact on The Global Economy (1991-2015)

Estimating the Direct Impact from BRICs.

LIC individual domestic variables,
BRIC sources of spillover variables (e.g., productivity,

trade, FDI, exchange rates), and

Global factor variables (world oil prices, world
commodity prices, world demand, and U.S. Fed Fund
rates).
GDP, trade, inflation, and real exchange rates.
World demand, oil prices, other commodity prices,
and U.S. Fed rates,

Estimating the Indirect and Total

Impact of Shocks from BRICs
Lose of huge market- First world developed countries like U.S.A, U.K

will lose huge market base of BRICs.

Threat free market theory-Free market economy theory will face a
threat in this era of globalization.
Political instability- Political balance becomes threatened.
Low FDI- Failure of one of the BRICs country will result in low Foreign
Direct Investment (FDI)
Low Consumption- Consumption level will thats why world may
face depression.
Impulse response of global factor variables (e.g., world oil price) to
shocks (e.g., to productivity) in BRICs. This result, shocks to global
market (e.g. oil price) produces the indirect impact of shocks from
BRICs (e.g. Low productivity).

Question no. 06. Compare and contrast the merits of GNI per capita Versus
the idea of purchasing power parity, human development, and green
economics as indicators of economics potential in Brazil , Russia, China and
India.

Ans :- Gross national income per capita (GNI per capita)

represents the market value of all final goods and services
newly produced in an economy by a countrys domesticallyowned firms in a given year divided by its population.
Purchasing power parity (PPP) ) represents the number of
units of a countrys currency required to buy the same
amount of goods and services in the domestic market that
one unit of income would buy in another country.

GNI VS PPP-Gross National Income GNI of BRICs

countries of 2010
Rank

Country

Million of (US$)

China

5,700,018

Brazil

1,830,392

India

1,566,636

Russia

1,223,324

PPP
Rank
1
2
3

Country
China
India
Russia

Million of (US$)
10,169,521
4,194,856
2,812,383

Brazil

2,185,421

BRICs Development Indicator

Human development - But Living Standards Remain Far Below

Those in the Developed World
A long and healthy life,

Knowledge and
A decent standard of living

Green economics - Features

Low-carbon energy
Sustainable production of food
Sustainable transport system
Sustainable tourism
Green jobs,
sustainable lifestyles
Reforming International Environmental Governance
Appropriate pricing
Public procurement policies
Reforming the system of "environmental" tax
Increase public investment
Targeted government support for research and development
Social policies

BRICs concern of Green Economics

China - will endeavor to lower its carbon dioxide emissions per

unit of GDP by 40-45% by 2020 compared to the 2005 level.

South Africa 34% below BAU 2020; conditional 42% BAU by
2020
India - will Endeavour to reduce the emissions intensity of its
GOP by 20-25% by 2020 in comparison to the 2005 level.
Brazil -36.1-38.9% of projected emissions by 2020
Russia - Russias forestry in frame of contribution in meeting
the obligations of the anthropogenic emissions reduction;
- Undertaking by all major emitters the legally binding
obligations to reduce anthropogenic GHG emissions.

Share of Countries in CO2 Emissions

Reference:
www.globalsherpa.org
WEO Projection for 2015
World Economic Market Exchange rate.

WWW.INVESTMENTPEDIA.COM
IMF and Word ECONOMIC OUTLOOK 2010

Questions?