Emergin Markets_Brazils Quest for Comparative Advantage
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Case Study 1: Emerging Markets: Brazil’s Quest for Comparative Advantage
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STUDENT ID
JANUARY 2015
Table of Contents: Page Number
Abstract 3
What Makes Brazil’s Economy Competitive 4
Brazil’s Eager to Develop World-Class Manufacturing 5
Shifting Brazil’s Economy 5
On Ethics 6
Conclusion 6
References 7
Abstract
When it comes to Global Business, Strategic/International Trade, among other forms of doing business domestic and internationally, it is crucial to follow on of the most important principles in all economics; comparative advantage. This theory was developed by David Ricardo in 1817. “On the basis of a simple model with just two countries and two goods, he showed that every country—even one enjoying an absolute productivity advantage in both goods—would benefit from specializing in what it was relatively best at producing and then engaging in trade for everything else” (Moss, 2014). Taking a look at major players in emerging global markets, Brazil by all means should be in the list as emerging market. This Case Study will explain why Brazil is an emerging market but at the same is having difficulties being competitive globally.
What makes Brazil’s agriculture competitive and why its manufacturing industries lack competitiveness.
Brazil’s agriculture prowess is the envy of many other countries that spent a lot more in resources and lack the Brazil’s geography to produce agricultural products. Benefitting from its geography and extensive water reserves, Brazil is able to produce the majority of its food products domestically, yet maintains enough surplus to engage in substantial exportation. Moreover, due to severe Brazilian currency devaluation in 1999, making Brazilian exports extremely competitive in the foreign market, Brazil’s export sector expanded enough to employ a
Case Study 1: Emerging Markets: Brazil’s Quest for Comparative Advantage
XXXXXXXX
STUDENT ID
JANUARY 2015
Table of Contents: Page Number
Abstract 3
What Makes Brazil’s Economy Competitive 4
Brazil’s Eager to Develop World-Class Manufacturing 5
Shifting Brazil’s Economy 5
On Ethics 6
Conclusion 6
References 7
Abstract
When it comes to Global Business, Strategic/International Trade, among other forms of doing business domestic and internationally, it is crucial to follow on of the most important principles in all economics; comparative advantage. This theory was developed by David Ricardo in 1817. “On the basis of a simple model with just two countries and two goods, he showed that every country—even one enjoying an absolute productivity advantage in both goods—would benefit from specializing in what it was relatively best at producing and then engaging in trade for everything else” (Moss, 2014). Taking a look at major players in emerging global markets, Brazil by all means should be in the list as emerging market. This Case Study will explain why Brazil is an emerging market but at the same is having difficulties being competitive globally.
What makes Brazil’s agriculture competitive and why its manufacturing industries lack competitiveness.
Brazil’s agriculture prowess is the envy of many other countries that spent a lot more in resources and lack the Brazil’s geography to produce agricultural products. Benefitting from its geography and extensive water reserves, Brazil is able to produce the majority of its food products domestically, yet maintains enough surplus to engage in substantial exportation. Moreover, due to severe Brazilian currency devaluation in 1999, making Brazilian exports extremely competitive in the foreign market, Brazil’s export sector expanded enough to employ a
References: 1. Moss, D. (2014). An Economic Principle For Us All: Comparative Advantage. Forbes. Retrieved from: http://www.forbes.com/sites/hbsworkingknowledge/2014/10/22/an-economic-prinicple-for-us-all-comparative-advantage/2/ 2. Pendegast, S. & Pendergast T. (2002). “Brazil” and “India”. Worldmark Encylopedia of National Economies (Volume 2 and 3). 3. Peng, M. (2014). Chapter 5. Trading Internationally. Global Business, Third Edition. 4. Sedano, F. (June, 2013). Brazil’s Manufacturing Growth Puzzle. MAPI. Retrieved from: https://www.mapi.net/brazils-manufacturing-growth-puzzle 5. Deloitte. (June, 2010). Global Manufacturing Competitiveness Index. Retrieve from: http://www.compete.org/images/uploads/File/PDF%20Files/2010_Global_Manufacturing_Competitiveness_Index_FINAL.pdf 6. Deloitte. (2012). Competitive Brazil. Challenges and strategies for manufacturing industry. Retrieve from: http://www.deloitte.com/assets/Dcobrazil/Local%20Assets/Documents/Ind%C3%BAstrias/Manufatura/livro_ingles.pdf 7. World Economic Forum. CEO Policy Recommendations for Emerging Economy Nations: Brazil. Retrieve from: http://reports.weforum.org/manufacturing-growth/brazil/