BRIC County Strategy Paper Part 1: Strategic Opportunity Assessment
A. Strategic Opportunity Assessment and Analysis
United States
The US automobile industry is among the biggest and most developed in the world. The
industry is distinguished by intense rivalry, cutting-edge technology, and substantial R&D
expenditures. There are many different types of businesses in this sector, ranging from big,
international manufacturers to small vendors and retailers. The projected revenue for 2024 is
US$82.8bn an annual growth rate of 18.20% as indicated by Statista (2024).
Key trends and issues
Electrification and Sustainability. Demand from consumers, environmental restrictions,
and battery technological developments have resulted in a dramatic move towards electric vehicles.
This shift is being led by businesses like Tesla (Statista, 2024). Automobile manufacturers are
putting a lot of money into environmentally friendly initiatives, such as developing recyclable
substances and using renewable energy in manufacturing. SUVs and crossovers, which account
for most sales in the US market, are becoming more and more popular. With substantial
investments being made in artificial intelligence (AI) and machine learning to improve automobile
performance and security, the field of autonomous vehicle technology is developing at a rapid pace.
The sector is being shaped by government subsidies for electric vehicles and stricter pollution
requirements (Statista, 2024).
A. The Structure and Trends of the Automotive Industry in Each of the BRIC Countries
Brazil: With substantial manufacturing activities, Brazil is home to several global automotive
giants, including Volkswagen, General Motors, and Fiat. Local production and a robust supply
base are the main factors driving the industry. The buying power of consumers and car sales are
impacted by economic instability and volatile exchange rates. Market trends are impacted by
government initiatives such as import tariffs and incentives for domestic manufacturing. There is
a lack of connectivity and consumer embrace in the early stages of the electric car market (Statista,
2024).
Russia: Russian car manufacturers like AvtoVAZ and GAZ are part of the country’s automotive
sector, but there are also foreign businesses operating locally. A strong and heavy concentration
on locally built vehicles is a defining feature of the market. The automotive industry is impacted
by supply chain disruptions and international penalties (Statista, 2024).
India: India’s automotive sector is expanding quickly. The sector is characterised by foreign and
indigenous firms like Maruti Suzuki and Hyundai, as well as major local businesses like Tata
Motors and Mahindra. To encourage the use of EVs, India has put in place initiatives like the
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme. India is
characterised by a poor infrastructure including a scarcity of EV charging stations (Confederation
of Indian Industry, 2024).
China: China boasts of being the largest automobile market in the world. The local manufacturers
found in China include BYD and Geely. Driven by robust policies and perks, China is the global
leader in electric vehicle manufacturing and uptake. Autonomous driving and artificial intelligence
(AI) have benefited from substantial investment. Sustainable development and domestic
production are encouraged by Chinese policies, which influence the sector (Statista, 2024).
C. The cultural distance of the BRIC countries from the culture of the United
States. Use the six Hofstede Cultural Dimensions ratings for the countries.
Country: Brazil
Cultural
Dimension
Score Comments
Power Distance 69 Has a strong hierarchy view inequality as a norm. Social status and symbols communication respect and power.
Individualism 36 Strong cohesion among families and extended families.
Masculinity 49 As a society, there’s no clear motivation for success.
Uncertainty
Avoidance
76 Following most Latin countries, having rules and striving for a safer place.
Long Term
Orientation
28 Great concern with traditions and don’t save for the future.
Indulgence 59 Seek to enjoy the moment. Highly optimistic.
Country: China
Cultural
Dimension
Score Comments
Power Distance 80 Inequality is acceptable, people should not have
aspirations beyond their rank.
Individualism 43 Collectivist society where being a part of the out- group can be met with hostility
Masculinity 66 Willing to make many sacrifices to get ahead in life. Leisure time is not too important.
Uncertainty
Avoidance
30 Society is comfortable with ambiguity.
Long Term
Orientation
77 Pragmatic culture with a strong sense of saving and investment.
Indulgence 24 Restrained society, tend to be pessimistic.
Country: Sout Africa
Cultural
Dimension
Score Comments
Power Distance 49 Society has a hierarchical order, ideal boss is a benevolent autocrat.
Individualism 23 Collectevist group who believe in helping others. Loyalty to the group overrides most social rules and regulations.
Masculinity 63 People “live in order to work” Conflict are resolved by fighting them out.
Uncertainty
Avoidance
49 Relaxed attitude, believes there should be no more rules than necessary.
Long Term
Orientation
18 Respect traditions but do not save for the future. Focus on quick results.
Indulgence 63 Optimistic society willing to enjoy the moment.
Country: India
Cultural
Dimension
Score Comments
Power Distance 77 Appreciate a hierarchical society. Depend on the boss for direction.
Individualism 24 Has both inidividualistic and collectivist traits.
Masculinity 56 Decisive society, showing off success is normal.
Uncertainty
Avoidance
40 Acceptance toward imperfection, somethings will go unexpected.
Long Term
Orientation
51 Dominant (long term or short term) preference can’t be determined.
Indulgence 26 Rather restraint society, tend to be pessimistic. Indulging themselves is wrong.
Country: Russia
Cultural
Dimension
Score Comments
Power Distance 93 Huge power difference between individuals. Behaviors are reflected the status roles of individuals.
Individualism 46 They are overall middle of the road between individualism and collectivism.
Masculinity 36 Talk modestly about themselves and dominant behaviors among peers is not accepted.
Uncertainty
Avoidance
95 Ambiguous situations are uncomfortable. Detailed planning is a common occurrence.
Long Term
Orientation
58 Pragmatic mindset. Strong propensity to save and invest.
Indulgence 20 Tend to be cynical. Restrained society.
Cultural Dimension
United States
Brazil Russia India China South Africa
Power Distance
40 69 93 77 80 49
Individuali sm
60 36 24 46 43 23
Masculinit y
62 49 36 56 66 63
Uncertaint y Avoidance
46 76 95 40 30 49
Long Term Orientatio n
50 28 58 51 77 18
Indulgence 68 59 20 26 24 63
TOTAL CULTURAL DISTANCE FROM THE UNITED STATES
0 127 222 70 148 87
The results from this exercise should not come as a surprise; foreign countries
scored differently from the US. What was a shock, was India being surprisingly similar with
the United States. Culturally a US company would have the least issues expanding to India
as they should require the least amount of change to operate effectively. Russia is at the
opposite side of the spectrum being the most culturally distinct from the United States.
Expanding firms need to do a market research report, review local laws, and take into
account cultural and political considerations of the local population.
D. The importance of the BRIC countries to the selected industry.
A. Describe the reasons why companies in the selected industry should be considering a
BRIC strategy.
The BRIC countries Brazil, Russia, India, and China are significant to the automotive
industry for several reasons the first reason is that it produces rapid economic growth and large
markets, it increases Urbanization, produces government incentives and investments, creates
strategic manufacturing hubs, provides market diversity, rising technological capabilities, and
helps with environmental regulations and stabilities.
BRIC countries are characterized by rapid economic growth, leading to an expanding
middle class with increasing disposable income. This economic upturn translates into a higher
demand for automobiles as more individuals can afford to purchase personal vehicles. The sheer
size of the populations in these countries particularly in China and India represents vast,
untapped markets for automotive companies, providing immense growth potential compared to
more saturated markets in developed countries.
The trend of urbanization in BRIC countries is accelerating, with more people moving to cities
where the need for personal and public transportation options is growing. This urban shift results
in a higher demand for both private vehicles and public transport solutions, pushing automotive
companies to innovate and cater to these emerging urban needs.
Governments in BRIC countries often offer incentives to attract foreign investment in the
automotive sector, including tax breaks, subsidies, and infrastructure development. These
policies are designed to boost domestic manufacturing capabilities and create jobs, making it
financially advantageous for automotive companies to establish operations in these regions.
BRIC countries are becoming key manufacturing hubs due to their relatively lower labor costs,
improving infrastructure, and growing expertise in automotive production. Establishing
production facilities in these countries allows automotive companies to benefit from cost
efficiencies and to better serve regional markets, reducing logistics and transportation expenses.
A BRIC strategy enables automotive companies to diversify their market base, reducing
reliance on traditional markets in North America and Europe. This diversification is crucial for
mitigating risks associated with economic downturns in specific regions, as the BRIC markets
can provide stability and growth opportunities during periods of global economic uncertainty.
BRIC countries, particularly China and India, are investing heavily in technological
advancements, including electric vehicles, autonomous driving, and smart mobility solutions.
Collaborating with local tech companies and leveraging these advancements allows global
automotive firms to stay at the forefront of innovation and remain competitive in the evolving
automotive landscape.
There is a growing emphasis on environmental sustainability in BRIC countries, with
stricter regulations being implemented to reduce emissions and promote cleaner technologies.
Automotive companies that adopt a BRIC strategy can lead in the development and deployment
of sustainable automotive technologies, such as electric and hybrid vehicles, to meet these
regulatory requirements and cater to environmentally conscious consumers.
Considering a BRIC strategy is crucial for companies in the automotive industry due to the
significant growth opportunities, economic advantages, and strategic benefits these countries
offer. Tesla should be considering a BRIC strategy due to the immense growth potential and
strategic advantages these markets offer. China, for instance, is the world’s largest market for
electric vehicles driven by robust government incentives and a growing environmental
consciousness. Tesla’s Gigafactory in Shanghai exemplifies the benefits of local production,
reducing costs and enhancing market responsiveness. India’s rapidly urbanizing population and
increasing demand for sustainable transportation present another promising market for Tesla’s
innovative electric vehicles. Additionally, Brazil and Russia offer emerging opportunities with
their expanding middle classes and improving infrastructure. By focusing on BRIC countries,
Tesla can diversify its market base, capitalize on economic growth, and solidify its position as a
global leader in the electric vehicle industry.
E. Analysis of Strategic Opportunity and Cultural Distance Assessment for BRIC
Countries
1. China
Opportunity Assessment:
Market Size and Growth: China is the largest automobile market in the world, providing vast
opportunities for growth.
Government Support: Robust policies and incentives favor electric vehicle (EV) production
and adoption, making it a prime market for EV manufacturers.
Technological Investment: Significant investments in autonomous driving and artificial
intelligence (AI) enhance the development of cutting-edge automotive technologies.
Cultural Distance Assessment:
Business Environment: Although there are challenges such as regulatory complexities and
intellectual property concerns, the Chinese market is accustomed to international business
practices.
Consumer Preferences: There is a growing demand for high-tech, sustainable vehicles, aligning
with global automotive trends.
Priority Recommendation: High
Rationale: China’s substantial market size, supportive government policies, and technological
advancements make it the most promising market among BRIC countries. Despite the cultural
and regulatory challenges, the opportunities far outweigh the risks.
2. India
Opportunity Assessment:
Market Growth: Rapidly expanding automotive market with a focus on both traditional and
electric vehicles.
Government Initiatives: Programs like FAME (Faster Adoption and Manufacturing of Hybrid
and Electric Vehicles) support EV adoption.
Manufacturing Hub: India is becoming a strategic manufacturing hub due to its lower labor
costs and improving infrastructure.
Cultural Distance Assessment:
Business Environment: Bureaucratic challenges and infrastructure issues are notable, but the
market is increasingly opening to foreign businesses.
Consumer Preferences: There is a growing middle class with an increasing demand for
affordable and sustainable vehicles.
Priority Recommendation: Medium to High
Rationale: India’s expanding market and supportive government policies make it a significant
opportunity. However, infrastructural and bureaucratic hurdles require strategic planning and
investment.
3. Brazil
Opportunity Assessment:
Manufacturing Base: Home to major global automotive manufacturers with a strong local
production base.
Government Policies: Tariffs and incentives favor domestic manufacturing, providing an
advantage for locally produced vehicles.
Economic Instability: Economic volatility and exchange rate fluctuations can impact consumer
purchasing power and market stability.
Cultural Distance Assessment:
Business Environment: Familiarity with Western business practices, but economic and political
instability pose risks.
Consumer Preferences: Preference for affordable and practical vehicles, with growing interest
in sustainable options.
Priority Recommendation: Medium
Rationale: Brazil presents a balanced opportunity with its established manufacturing base and
potential for growth. Economic instability and market volatility are significant risks that need to
be managed.
4. Russia
Opportunity Assessment:
Local Production: Dominated by local manufacturers with limited foreign presence due to
international sanctions and geopolitical risks.
Market Challenges: Supply chain disruptions and penalties impact the industry negatively.
Economic Environment: Market influenced by economic sanctions and political factors,
creating a challenging business environment.
Cultural Distance Assessment:
Business Environment: High regulatory barriers and geopolitical risks.
Consumer Preferences: Strong preference for domestically produced vehicles, limiting
opportunities for foreign brands.
Priority Recommendation: Low
Rationale: Given the geopolitical risks, economic sanctions, and market challenges, Russia
presents the least attractive opportunity among the BRIC countries for automotive expansion.
Overall Recommendation for BRIC Prioritization:
China: Prioritize China due to its vast market size, supportive government policies, and
significant technological investments.
India: Focus on India as a secondary priority, leveraging its rapid market growth and strategic
government initiatives.
Brazil: Consider Brazil for its established manufacturing base and potential growth, but be
cautious of economic volatility.
Russia: Deprioritize Russia due to its high geopolitical and economic risks.
By focusing on China and India first, your client company can capitalize on the significant
growth opportunities and supportive environments in these markets, while also considering
strategic entry into Brazil as a supplementary market. Russia, due to its numerous challenges,
should be approached with caution or potentially deferred until the business environment
stabilizes.
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