4.

GloTech Enterprise, the maker of midrange and high-end consumer electronics, is looking to expand operations abroad in either Germany or Brazil. Two senior marketing managers have different opinions about the relative appeal of each market.

Manager 1: We should aggressively expand into the German market. Germany already has a well-developed, affluent consumer economy. Certainly, Brazil has potential, but it also has problems posed by political risk and legal complexity.

Moreover, its market potential is hindered by the fact it has some very wealthy people, but far, far more a few poor people. Indeed, most recently, its measure of income equality, in terms of the Gini coefficient, is discouraging. Since around 2000 or so, Brazil's Gini coefficient has hovered around 0.60, a very high figure by any standard.

By the way, in case you are wondering, a Gini coefficient of 0 represents perfect equality, where everyone earns the same income, and 1 represents complete inequality where all the countrys income accrues to a single person.

Manager 2: I believe we should aggressively invest in fast-growing Brazil given that it offers us far more compelling long-term opportunities than does the slow-growing German market. Certainly, there are some serious income equality issues to deal with in operating in Brazil.

Still, the typical Brazilian consumer has not had much access to our product and early indications indicate considerable demand. So, while it will be tough to sell our product for a premium price, over the long term, increasing volume in an expanding market should prove profitable.

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Question | Based on these scenarios, which of the following observations best supports Manager 2's interpretation of the intrinsic, long-term potential of the Brazilian market?

a. Brazil has abundant supplies of natural resources and inexpensive, productive labor.

b. Germanys established economy and extensive national wealth provides many opportunities for sales, but, at the same time, is marked by extreme competition among insightful, innovative companies.

c. Like any market, Brazil does pose challenges. But, Brazil provides a growing number of profitable market options choices because many Brazilians, although poor, collectively represent an opportunity to start and sustain for mid-range consumer electronics.

d. Brazils economic environment is too unpredictable, and shows increasing tendency toward political risk, given the intrinsic instability in various governance institutions.