India
The country’s growing population and the rise of the middle class provide immense opportunities for companies to invest in India. Vast number of sectors like health care, retail, education, financial services, technology, etc. Present opportunities for foreign companies to invest and exploit the market potential. In order to work efficiently the companies need to understand market segments and understand the environment of the market to implement the strategies effectively.
Opportunities: The country shows high potential in the infrastructure sector and the mere focus and collaborating with china presents a golden opportunity for companies in infrastructure development to exploit this opportunity. On the other hand, the service sector is highly growing and contributes 60% of the country’s GDP and offers potential in different segments of the sector. The healthcare sector is highly unorganized but due to its high demand, and lack of supply presents a unique opportunity for different multinationals to take advantage of this opportunity. A major attraction for many companies is the growing GDP and the growth rate of the country/.
Threats: The major threats for foreign companies are the growing inflation rate, large fiscal deficits, and declining trend in the value of the rupee. These threats will restrict the investors and companies to re-think while planning to expand in India. Political reforms and the political condition of the country is very uncertain and is very unlikely to change. On the other hand, the business environment is very complex in India, especially the taxation policy, legal and bureaucratic systems further add complexity in the situation. These complex situations make the business environment very challenging for foreign companies.
China
The overall business environment in China is improving gradually providing major developments made by the government to bring improvement. On the contrary, the growing labor cost and legal risks are still discouraging, and for many new investors. Although investors are very active in China and spending heavily, but there are certain things that are not lucrative for the overall business environment of the country.
Opportunities: The major attraction for foreign companies is the domestic consumption of the country, and the country is in a transition period to build a customer-driven economy. Another major factor is the growing trend towards urbanization, and more people are moving towards urban areas. Upgrading of many industries along with convergence has presented many developments in various sectors to make them attractive for the foreign investors. The use of energy efficient and renewable resources are important measures towards building domestic economy. These factors, including low labor cost also present cost benefits for the companies.
Threats: Slow growth of the global economy is expected to hurt the exports of the country that contributes a major portion in the country’s GDP. The production capacity of china has exceeded the limit, and the country is facing challenges to reduce the burden. Many industries are facing the challenge of over capacity, thus limiting the entry of new companies in the market. The country lack in intellectual proprietary and the need of this technology is growing in the country. The industrial and information technology sector is growing, but due to over capacity further investments are restricted in the industries.
South Africa
The country is the gateway to Africa and present enormous opportunities for global companies to invest in South Africa. The world class infrastructure and a vibrant economy are highly attractive for the investors to invest in the country and get a passage to reach a market of estimated 1 billion people.
Opportunities: The opportunities present in the country are immense for foreign MNCs. The cost and ease of doing business and investment in the energy and infrastructure sector. Exploit the market of over a billion by entering in South Africa and getting a gateway for the rest of the Africa. The country’s social, economic policies and major economic reforms have made the industrial sector as well as services sector highly attractive. The business and the legal environments are highly feasible for the MNCs to enter and take advantage of the opportunities present in various sectors. The high capability of the industrial sector and the presence of technology are also the key factors of investing in the country. The oil and gas sector and the mining sector are full of opportunities in the country for foreign investors.
Threat: Culture and corruption are major threats for the companies and unfavorable social reforms are highly discouraging factors.
Several factors that are vital in every county of BRICS for MNCs include their GDP growth rates, population, mobile usage, economic competitiveness and ease of doing business. These factors present threats as well as opportunities for companies to look for these countries as new markets. These factors are comparatively illustrated in exhibit 1, 2 and............................
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