BRICS Economy
Global Expansion for the BRICS Economy: H&M
Expanding to another country is a risk per se, so the company known as one of the largest retail clothing companies of Sweden, needs to make a clever decision basing themselves on what they have already seen of these groups of countries. BRICS announced two years ago according to the New York Times that they would establish a system that would allow them to bypass the dollar and other global currencies when trading among themselves. If H&M expands to the BRICS economies it will be easier for them since the process of entering won’t be so difficult because of their agreements. If I was the manager of a multinational retail store like H&M, I would undoubtedly expand my company to the BRICS economy rather than the CIVETS economy.
First of all the BRICS economy has been going on strong for the last twelve years and little by little they are asserting everything they have said they would do. Even though the CIVETS economies are well known for having a young population, this is the only thing they seem to have in common. Because of their young population, these countries seem to be more independent of external demand as the BRICS; but as manager of H&M I’d rather choose a group of countries that actually needed our demand as a multinational company or their home clothing retail stores would take over H&M and that would mean that our expansion would be a total failure.
At the same time, according to Jim O’Neil, the man who created the BRICS term in 2001, by the end of the decade the BRICS will have at least 25% of global GDP. Also he predicted that by 2035 the BRIC nations will be as big as the leading industrialized nations of the G7. For these and various reasons this is the direction where H&M should head into, having in mind that the CIVETS emerged in 2011 and we haven’t seen anything significative that would make us prefer to expand to these countries rather than the
Expanding to another country is a risk per se, so the company known as one of the largest retail clothing companies of Sweden, needs to make a clever decision basing themselves on what they have already seen of these groups of countries. BRICS announced two years ago according to the New York Times that they would establish a system that would allow them to bypass the dollar and other global currencies when trading among themselves. If H&M expands to the BRICS economies it will be easier for them since the process of entering won’t be so difficult because of their agreements. If I was the manager of a multinational retail store like H&M, I would undoubtedly expand my company to the BRICS economy rather than the CIVETS economy.
First of all the BRICS economy has been going on strong for the last twelve years and little by little they are asserting everything they have said they would do. Even though the CIVETS economies are well known for having a young population, this is the only thing they seem to have in common. Because of their young population, these countries seem to be more independent of external demand as the BRICS; but as manager of H&M I’d rather choose a group of countries that actually needed our demand as a multinational company or their home clothing retail stores would take over H&M and that would mean that our expansion would be a total failure.
At the same time, according to Jim O’Neil, the man who created the BRICS term in 2001, by the end of the decade the BRICS will have at least 25% of global GDP. Also he predicted that by 2035 the BRIC nations will be as big as the leading industrialized nations of the G7. For these and various reasons this is the direction where H&M should head into, having in mind that the CIVETS emerged in 2011 and we haven’t seen anything significative that would make us prefer to expand to these countries rather than the
References: Joy, O. (2013, March 27). Building on 'BRICS ': The next emerging economies. CNN. Retrieved November 25, 2013, from http://edition.cnn.com/2013/03/27/business/brics-civets-emerging-markets/ What Do You Think the BRICS Can Build?. (n.d.). The New York Times. Retrieved November 25, 2013, from http://rendezvous.blogs.nytimes.com/2012/03/29/what-do-you-think-the-brics-can-build/ McPherson, A (2011, March 3). Expanding H&M to Brazil: A Strategic Approach (pdf format). Retrieved November 25, 2013 “How Half the World Shops: Apparel in Brazil, China, and India” (n.d.) . The McKinsey Quarterly. Retrieved November, 25, 2013, from http://www.mckinseyquarterly.com/article_print.aspx?L2=20&L3=73&ar=2075