Global Strtegy Essay

Submitted By jodie900625
Words: 2791
Pages: 12

Currently, both India and Brazil are both rising economic powers following close on the heels of China. That is why many economists compare the business environments of different country such as China, India and Brazil. Not only because of the political environment in those countries are similar, but also because of other external environment are very similar such as economic environment, society environment, and technology environment. Despite of the unavoidable similarities, there are still their special characteristics in the business environment. Generally speaking, external analysis involves PEST analysis. It can be used to analyse a firm’s current and future environment as part of the strategic management process (Worthington and Britton, 2006). The following essay will analyse the business environments including political environment, economic environment, society environment and technology environment in India and Brazil through four perspectives as well as being based on the analysis of discussing the impacts. These may have on the strategies of global firms operating in these two countries.

As a tool to analysis business environment, it has some advantages: first, PEST provides an appreciative of the wider business environment. Second, it encourages the development of strategic thinking. Furthermore, PEST raise awareness of threats to a project and it can help an organisation to anticipate future difficulties and take action to avoid or minimise their effect. Last but not least, PEST can help an organisation to spot opportunities and exploit them.

But it also has disadvantages, such as: the manager collected large amounts of information through PEST that would be make it more difficult to see the wood for the trees and lead to "paralysis by analysis." In addition, the analysis may be based on assumptions that prove to be unfounded. Another PEST analysis only covers the external environment and the results need to be considered with other factors, such as the organisation itself, competitors and the industry in which it is working.

This is mainly because of the fast economic developments in those two countries. As emerging economies go, it is probable that Brazil and India may become the most profitable and powerful economic countries in the world (Passport GMID, Opinion, 2012)

Brazil has a superior business environment over India. Because of Brazilian political situation is more relatively than Indian. Despite Brazil and India do not possesses stable political situation. Besides, the situation in India is more turbulent. In recent years, the economic development has become stagnant in Brazil and India because of the political instability. Economic conditions are influenced by politics and government policy; equally, it is a major influence affecting government decisions (Thompson & Martin, 2005). As we know, Brazil is a federal republic while India is a parliamentary republic (Passport GMID, country profile, 2012). It is a great weakness in terms of economic development in those two countries.

Since the judicial system in Brazil is unfair, corruption is a serious problem preventing economic growth in Brazil. This aroused great resentment among the people. An interested statistic in the government's IBGE statistics agency states that the richest 10% of households had 44.5% of the nation's wealth while the poorest 10% had only 1.1% of the wealth (Passport GMID, 2011).

India is worried not just about domestic political issues but also about international problems. In the eastern part of the country, there is a Maoist insurgency while more than a dozen rebel groups have been fighting to free Kashmir from India. The opposition parties tried to force the main party to step down during the domestic turmoil. However, New Delhi accused Pakistan of complicity in the terrorist assaults in Mumbai in 2008. In the aftermath, relations between the two countries failed significantly. India also disputes…