Dwivedi

Welcome to the Management Consultant Blog managed by Jay Dwivedi. Complete list of articles is in Knowledge Bank.  To find specific article, please search.  Please visit iProceed for more information.

Tuesday, November 30, 2004

Merck's flawed Vioxx recall strategy

It is pretty obvious that Merck management is getting ready for winding up the firm's operations. That does not come as a surprise. Most analysts (and media headlines) have been questioning if Merck will survive the Vioxx recall mess. It could have survived if the management was willing to take a more conciliatory approach. In the opinion of iProceed, there are several fundamental flaws with Merck's approach to handing recall of Vioxx:
  1. No matter what, you never antagonize your customers (which in this case are patients, and not healthcare companies as Merck might like to believe). By taking a very hostile approach and telling Vioxx customers that something was wrong with them rather than Vioxx, Merck is essentially telling its customers that it doesn't care. As the cases go to trial, a lot of ugly details will come out that will show that Merck knew as early as 2000 that Vioxx was a problematic drug but it continued to aggressively advertise it to consumers, rather than dealing with the issues. It also engaged an army of employees and consultants to debunk the argument for which evidence was developing that Vioxx may be responsible for increased risk of heart attacks. This attitude will not make it a darling among its customers. We are not aware of many companies that survived by attacking their customers.
  2. Appalling it may seem now, but Merck leveraged its relationship very well with FDA. It is now becoming quite obvious that FDA was a partner in the crime that Merck committed. But don't expect the FDA to help it any more. Washington is an ugly place when it comes to loyalties. It is unlikely that any Washington politician will accept a single dollar from Merck anytime soon; so there is no reason for Merck's friends in Congress and at the FDA to bother helping it.
  3. Over the years, a pharmaceutical company has become more of an R&D enterprise. Merck did a great job at that. Merck is ranked at #7 on the Technology Review's Innovation Index (it spent over $3 billion on R&D which is 14% of its 2003 sales). R&D organizations don't perform very well when they have such massive distractions. It would not be a great surprise that top scientists will soon flee Merck and distractions from lawsuits and political theater in Washington will make it harder for Merck executives to focus on growth and value.

Great companies can be destroyed by the short-sightedness of its executives and that is exactly what is happening at Merck. For business leaders at other companies, it is a classic story of what not to do so we would recommend that you follow the developments at Merck carefully and learn from them.

Related articles

Vioxx recall lessons for business leaders

Strategic lessons from Vioxx recall

Pharmaceutical companies need makeovers


Friday, November 26, 2004

Vioxx recall lessons for business leaders

You are probably looking at how the Vioxx recall controversy has evolved over last couple of weeks and wondering what a bunch of morons run Merck. Do not forget, however, that Merck used to be a great company and as recently as last month was ranked among the best for innovation. So what happened?

Rather than going outside to find out what is wrong with other corporations, just walk to the product development group in your company and chat with some of the engineers. American corporations have always been known for making defective, poorly designed products. Since speed has always been more important to us than quality, we often commercialize products that have not been fully designed. We don't want to wait till we perfect the product. No wonder customers have so many problems with products made in the United States. We are good at R&D but horrible at commercializing them and whether we want to admit it or not, this is the way of life in most American corporations.

This is not a major problem in nine out of ten cases. Microsoft is still issuing patches for Windows 95. We recall products so often that most of us never even hear of what has been recalled. When that happens with a product that can kill, that is when things get ugly. Think mesothelioma here. Dozens of companies literally disappeared or are not what they used to be. Many are still struggling to survive.

So the day is not far off that Harvard Business School will do a case on Merck and we will all tell stories of how a greedy group of Merck executives destroyed the company. Instead of admitting wrongdoing (for which evidence seems to be mounting), apologizing to patients and family members of those who are dead because of Vioxx, and moving on, Merck continues to engage in a game that is bound to result in its demise. The legal process will simply make some attorneys rich and delay the sad day by months/years.

So what can you learn from the Vioxx recall mess?
  1. Zero defect is not desirable in most cases and it is simply a matter of risk management what percentage of defects makes sense to your business. However, if your product can mean life and death choices, think zero-defect.
  2. Causing death deliberately of your customers (not even of one life) is not an option no matter what your risk management gurus are telling you. If some risk management expert throws some charts and numbers at you and tries to build a compelling case why X number of deaths are acceptable from a financial perspective, you not only need a new set of risk management experts, you also need to a crash course in business ethics.
  3. Great companies are not built on a foundation of greed. While Vioxx was a blockbuster drug, Merck executives knew as early as 2000 that it was only a house of cards waiting to collapse. So no amount of direct-to-consumer advertising or huge campaign contributions to the Republican Party would help in the long run.

Recommended article: Risk management frameworks


Wednesday, November 17, 2004

Sears and KMart merger may create value

While iProceed is saying that we typically do not support mergers and acquisitions, and definitely not of this magnitude. The reason: Study after study has suggested that mergers simply destroy value most of the time.

AT Kearney has found that 58% of mergers and acquisitions did not result in a stock exchange price increase. Robert W. Holthausen, a Professor of Accounting and Finance and Management, says, "Various studies have shown that mergers have failure rates of more than 50 percent. One recent study found that 83 percent of all mergers fail to create value and half actually destroy value. This is an abysmal record. What is particularly amazing is that in polling the boards of the companies involved in those same mergers, over 80% of the board members thought their acquisitions had created value."

Why Sears and KMart marriage might work?
  1. When two desperate companies come together they might work harder to make it work. Bain & Company’s survey of 250 global executives involved in mergers and acquisitions indicates that two of the top four reasons for failed corporate marriages relate to poor integration. Both Sears and KMart bring to the marriage what each lacks. For instance, the home/garden appliance business (particularly the service component of it) and apparel (now that Sears has a broad product line) will be great additions to K-Mart which had always been a store without any value creation mechanism until Martha Stewart came along.
  2. While Sears had a privileged position because of its presence in malls, it was not able to capitalize on it because of its low-end merchandise. iProceed believes that the combined company should take a segmentation approach by placing high-value merchandise in stores in malls while pushing low-end products through K-Mart stores in the suburbs. It is fine to carry both names but this segmentation approach can be reinforced by emphasizing the premium position of mall stores and value position of suburban stores. If the company tries to make all stores the same, they are in trouble.
  3. In today's competitive dynamics in the retail sector, size matters, particularly when one needs to compete with Wal-Mart. The combined company might also be in a better position to expand overseas in high-growth markets like China and India (where retail stores like these are practically unknown and can create a lot of value to price-conscious consumers who do not want to shop in malls that are slowly emerging).

Driving economic growth in America

The American economy has been a victim of anemic economic growth despite massive tax cuts (that may have caused irreparable damage to long-term health of the country, despite the argument that we would be in worse shape if taxes were not cut). It is, therefore, interesting to hear secretary Snow observing that solving America's problem is also somehow the responsibility of other nations, particularly those in Europe. It was not too long that we blamed Japan (and there were few voices blaming China) for our economic ills.

iProceed approach to driving growth in America
  1. Stop blaming other nations. While we need to collaborate with other nations to make the world a better place for trade and business, other nations will act in their self-interest and we need to do the same. What that means is that we will have to get our own house in order to see meaningful growth.
  2. As France, Germany, Japan, and many other tigers of the past like Singapore, South Korea, Malaysia, Taiwan, etc. already know very well, we might very well be a mature economy now and may have to content ourselves with less than 5% GDP growth rates as far as the eye can see. Or in other words, we need to get out of the US and look for business opportunities overseas. (Related article: Latest economic indicators point to maturing of American economy)
  3. The budget deficit could be a serious impediment to growth since it limits our abilities to spend where we can get the highest impact. As we are already seeing, the cash that companies now have on their balance sheets is definitely not being invested in the US economy. It is either going overseas or is just sitting there. We need to improve the investment climate in America.

Monday, November 15, 2004

China and Brazil enter strategic partnership

China and Brazil, members of the so-called BRIC (Brazil, Russia, India, and China) group, have strengthened their relationship this week and that will lead to greater trade among the two nations.

As iProceed research has shown, there is no likelihood that the United States will stop being the world's largest economy any time soon (after all with all the sad stories coming out of Japan for almost 20 years now, it is still the world's second largest economy), the growth opportunities are clearly elsewhere. And China is one of the most exciting markets right now. (Related article: Growth pendulum shifting out of the US)

But mind you, while iProceed is bullish about growth prospects and opportunities in the BRIC group, these are not the easiest countries to do business in. In the Transparency International's report on corruption perceptions, all four countries are literally at the bottom of the pack. On a scale of 1 to 10, none of them scores even a 4.

Recommended article: Growth opportunities in China

RFID technology gets a boost

Today's announcement by the Food & Drug Administration (FDA) that it will use radio frequency identification (RFID) technology to combat counterfeiting of drugs is great news for the technology and companies that have been diligently working for years to make this technology more widely available by reducing the cost of manufacturing and deployment. According to the FDA, it is committed to the use of RFID by the U.S. drug supply chain by 2007.

As many of you know, RFID technology has been around for many years but only after aggressive efforts of Wal-Mart and consumer packaged goods companies like Gillette, P&G, and others, it has been relatively recently deployed on a big scale. The main barrier was its cost which is starting to come down now. Many experts believe that RFID tags will eventually displace bar codes.

While you may not be in the pharmaceutical or consumer packaged goods business but that does not mean that you will be untouched by RFID technology. Hence, it is a great time to conduct an impact assessment study for your business and identify both opportunities and threats.

Recommended article: What is your RFID strategy?

Thursday, November 11, 2004

US Monetary policy critique

In a previous post on iProceed blog, we had mentioned that there are several encouraging indicators for the 2004 holiday season. iProceed has, however, not yet lifted its warning on a recession in 2005.

It was, therefore, encouraging to read a relatively positive statement from the Fed. In simple words, this is what Fed is saying:
  1. Everything is in place for moderate economic growth in the future.
  2. There is only moderate risk that higher economic growth may lead to inflation.
  3. Fed will act as and when economic conditions change.
Implications of monetary policy
  • Since only moderate growth is expected, expect only a modest, but gradual, increase in interest rates during next 12 months.
  • If Fed's monetary policy leads to low inflation, it is good for everyone, particularly in light of rather unusually high energy prices and expectations that taxes will go up in 2005.
  • Assess the impact of higher interest rates on your business and develop a strategy accordingly.

Search advertising market getting crowded

During the first half of 2004, online ad spending was just close to $5 billion and 40% of it was in search engine marketing. That's pretty significant number and that is why the search marketing space is getting over-crowded. Apart from the usual suspects in search engine advertising, Google, Overture, and FindWhat, there is a whole new group of companies entering this space and we saw a few of them (Findology, GenieKnows, Kanoodle, etc.) at AdTech 2004 in New York City.

But let us review how things are heating up at the top. Google, the king of search engines, is now being challenged by Yahoo Search and MSN Search. Of course size is everything in search and that is why only yesterday Google claimed that its index is now over 8 billion pages and MSN has launched its beta website claiming to have 5 billion pages.

Here are a few thoughts that iProceed has on the current battle in search engine marketing:
  1. Why are they all trying to be the same? Both Yahoo and MSN have launched search pages that mimic the Google home page. It would have been nice to see some creativity there particularly from Yahoo and MSN that have otherwise very crowded and packed templates for their web pages as opposed to Google templates that emphasize lots of white space.
  2. Until Microsoft comes up with its own version of Inktomi, the results that you get on Yahoo and Microsoft are almost identical (though we have seen increasing activity by the MSNBOT on iProceed during recent months).
  3. Microsoft is in the unique position of being able to make search part of its operating system and softwares that the whole world seems to use. If it can be even half as good as Google, most of the time we might just be happy not to launch the browser at all and search right from Word or Excel.

Related article: Developing a search advertising strategy


Wednesday, November 10, 2004

Growth pendulum shifting away from the US

The 2004 Open Doors report should not have surprised anyone since it only documents what has been known for a while. Not only was it difficult for foreign students to come to the US, it was also no longer an attractive place to be. "The action is not here anymore," as one expert, who recently traveled to both China and India, and we spoke to recently describes it. Not only are multinational companies setting up shops there for high-end R&D, back-end support services, and even sales/marketing for emerging markets, the venture capitalists and investors are scouting for talent at university campuses there so that they can work with them to set up new companies.

Interestingly enough, the drop in the number of students by country of origin is directly related to how hot the economy there is. China is on top followed by India. Talking to many of my personal friends in Japan, which is third, I have learned that after 9/11 Japanese students are no longer confident that the US is a safe place for them to study. They are heading to Australia and New Zealand.

The decline in students is, of course, bad for the economy (particularly in university towns) because international students brought over $13 billion dollars to the U.S. economy in money spent on tuition, living expenses, and related costs, according to the Department of Commerce. The other ways in the US gets hurt is that there will be less teachers needed to teach and American competitiveness is threatened if we do not attract the best and brightest.

Suggestions for business leaders
  • Make sure that you have subsidiaries set up outside the US to attract bright people, particularly engineers and analysts.
  • Move high-quality work offshore so that you can provide meaningful employment opportunities and get the best and the brightest to work for you.
  • Train them in the US if needed to make them more conversant with the American way of doing business.

Suggestions for universities and educational institutions

  • Partner with local universities to offer programs for the students in China and India.
  • Encourage student/professor exchanges.
  • Invest in e-learning programs and promote it to overseas students.

Recommended article: American competitiveness threatened


Online advertising is back!

Spent yesterday at the Ad:TECH 2004 in New York City. Wow! It was as if the good old days of the Dot-Com era are back. Since 2001, this is the first show that we have been to where you literally could not walk. There were an incredible number of people at the show and it seems that the organizers failed to anticipate the number of attendees and the advertisers because the aisles were too narrow for so many people to walk and there were booths even in hallways.

The following are iProceed's takeaways from AD:TECH - The Event for Interactive Marketing:
  • Online advertising is hot.
  • There were more advertisers than publishers and agencies at the conference.
  • New companies are entering the online advertising space at a fast pace.
  • Google is still the 800-pound gorilla while Overture , FindWhat, Mamma, and Advertising.com are the 100-pound dogs. There were dozens of others companies that are copying the Google business model or coming up with slight variations on it, but none impressed us. They may be able to get some business from advertisers who are looking for an inexpensive way to advertise online, but we are very skeptical if they can achieve critical mass. In fact we are afraid that many of them may not even be around for too long. Conclusion: iProceed is staying with AdSense.
  • There were several affiliate program companies but as our research shows the days of affiliate programs are numbered and that was quite obvious from the number of people at their booths. The business model of affiliate program companies is not based on creating value for the publisher, and therefore, the affiliate programs are already going out of fashion.
  • Almost all the players in the space of companies that install a software on a user's hard-drive and then monitor the user behavior to serve targeted ads (a variety of buzzwords are being used to describe these business models though many attendees that we spoke to still thought of these companies as being in the illegal/gray area business) were present. Hotbar, Claria, WhenU, etc. all had invested in big booths. Our verdict: Stay away from them. Any business model that operates in gray area is best avoided.

Monday, November 08, 2004

India joins family of elite nations

Two relatively unrelated news caught the attention of iProceed.

  1. General Electric (GE) has sold a majority stake in its Indian outsourcing arm for $500 million to two private equity firms to have unrestricted access to the world market for BPO services. What this means is that India is now clearly the world leader in BPO services and there is nothing that can stop it from becoming a center of excellence.
  2. India and the European Union have launched a 'strategic partnership' deal which will culminate in India having the same relations with the EU as the US, Canada, China and Russia.
These are two very important developments since they indicate how India, that was so closely allied with Soviet Union and Non-aligned Movement, is quickly embracing more free-market and capitalist business principles.

Why is this a good news for the family of elite nations?

  • No matter what the short-term consequences of offshoring are, the basic idea behind offshoring is still a sound one - let everyone do what they can do best at the lowest possible cost. That creates value for everyone.
  • American companies, as expected, were the pioneers in embracing offshoring. The partnership with EU will help many EU nations to consider India as a possible resource.
  • The rapidly rising middle class in India (spurred by the free flow of information from the west through the Internet and television) wants to improve its lifestyle as fast as it can. Or in other words, it wants to "consume" like us. That is only good news for us. Americans cannot consume any more and growth in coming years has to come from under-developed, but rapidly growing economies like India.

Related article: Growth opportunity for direct marketing in India

Business opportunities in defense sector

The wars in Iraq and Afghanistan have exposed the limitations of the state-of-the-art in the military and provide some indications on what technology companies can do to fill the gaps that exist today. There are some interesting business opportunities that are emerging and we will get to those momentarily but let us review some background first.

If we look at the accomplishments of the two wars that the US has fought in last four years, here are a few broad observations that can be made:

  1. Eliminating the existing authority in a country may be easy but to establish complete control is probably impossible.
  2. It is a big challenge to create a replacement authority that can be a strategic partner in accomplishing the ultimate goals.
  3. Intelligence is easy to gather when large-scale movement of hardware is involved; it is far more difficult to track half-a-dozen suicidal fighters with crude weapons.
  4. An intelligence war may be more effective in eliminating terrorists than an all-out conventional war. When a group of terrorists can hide in a cave for years, sophisticated hardware/technology is useless.

Conclusions that can be drawn from recent experiences

  1. The days of conventional warfare are probably over.
  2. The state-of-the-art today is not ready for the unconventional wars that will be fought in the future.
  3. Technology is not everything.
  4. While it may be politically expedient to do so, personalizing the enemy is not helpful as broader strategic goal or as a way to judge the success of an initiative.
  5. The difficulties that we have faced in Iraq and Afghanistan will result in a strategic shift in future warfare - when you cannot compete in conventional ways, try to defeat the enemy using unconventional tactics.

Business opportunities for technology-oriented companies

  1. Dissemination of meaningful, easy-to-use, and timely data to military personnel on the front lines. Technology used in recent wars did not provide this data as effectively as was needed. Data analysis and interpretation software and communication technologies are badly needed.
  2. Battery power is still inadequate (too much weight and too little power). A lot of opportunities exist in providing lightweight sources of power to the military.
  3. More use of soft intelligence (reliable informants, better understanding of local culture/language/trends, etc.) to complement hard intelligence (satellite images, interception of communication, etc.) to come up with better understanding of what is happening. What is needed are better decision tools that combine soft and hard intelligence and deliver useful information to someone who only has seconds to absorb the information and act on it.

Vioxx recall - strategic lessons for business leaders

A brief background first for those who have not kept up with the details. Vioxx (rofecoxib) is a prescription drug for arthritis and acute pain. Merck, the drug manufacturer, had to recall the drug after learning that there was an increased relative risk for confirmed cardiovascular events, such as heart attack and stroke, beginning after 18 months of treatment. This would not have been such a big problem if it had not hidden this piece of news for years. FDA attributes as many as 27,000 deaths to Vioxx in the US and both FDA and Merck are being accused of negligence. Merck's stock continues to slide and estimates for Merck's liability in this case are around $18 billions.

So what can business leaders learn from the Vioxx fiasco?

  1. Be honest. There is no point in hiding such an important piece of news and wishing that it will just go away. Get it out as soon as you know particularly when human lives/health are involved.
  2. Risk management does not mean doing illegal activities. Yes, some of your products may be faulty or you will found out only after years that there was a design defect that caused injuries. You must manage your risks and have the best risk management practices implemented, but it does not mean doing anything that is illegal. That is not risk management no matter what your lawyers say.
  3. Think shareholder value rather than personal gain. You are not paid to become rich or to prove yourself right or to get away with it but to create shareholder value. If all your decisions pass one simple test "Is this action going to create shareholder value", there is nothing else you need to do.
  4. Remember Murphy's Law. You can not run away too long from bad products. They will eventually malfunction and literally drive you out of business. You may also go to jail.
  5. Ethics is important. Businesses do unethical (even illegal) things every day and seem to get away with them. You will eventually be caught though and that will be end of it all.

Recommended article: Risk management frameworks

Friday, November 05, 2004

Encouraging economic signs for the holiday season

Two pieces of economic data from today are prompting iProceed to ask businesses to push caution aside and prepare for a good holiday season.
  • The payroll data is very encouraging as we enter a month in which consumers start to contemplate holiday shopping.
  • The consumer credit data, while it shows that consumers are borrowing more (to spend it), can be interpreted in two ways. One, consumers may be feeling more confident about the future and might expect a gain in their income. On the other hand, lower savings rate, falling wages, and unemployment/under-employment are still real issues and it would not be surprising if the credit is a desperate measure to keep up with the rising cost of healthcare, gasoline, and state/local taxes. Consumer credit, in our opinion, is rising at alarming levels, and may be a cause for concern.

Here is what businesses need to do for exploiting the opportunity during the holiday season?

  1. Segment the market based on income levels. Several indicators (particularly from the election results) show that those consumers who have been able to keep their job feel very confident about their future while those that lost their jobs or know someone who has, are much more conservative. Both segments will spend during the holidays but what they spend on and how much they spend will be very different.
  2. Some additional research completed by iProceed shows that consumers are more interested in spending more on products that long-term create value (e.g. faster PC, better TV, etc.) than on another box of chocolate or bottle of wine.

Pharmaceutical companies need makeovers

While the problems with Vioxx might be scaring the CEOs of pharmaceutical companies, they have some reason to celebrate - the regulatory agencies and public policy for next four years is likely to be friendlier to the industry.

iProceed's situation assessment, however, shows that the pharmaceutical industry still needs a business model transformation. Any industry that relies on regulation as its savior (e.g. steel is a great example) does not have a very bright future unless the government starts to offer subsidies to it (the way we give subsidies to our farmers).

Here are several interesting issues that we have identified with respect to the pharma sector:

  • Drug pricing has now become an issue that even a grandma in Oklahoma understands. Which means that there will be more pressure on the regulatory agencies and the government to do something about it.
  • Several experts predict that some drug importation from Canada may be allowed but iProceed is still skeptical that it is going to happen during next four years.
  • Market forces are more powerful than many of us like to admit. Many Americans already go overseas for medical treatment and we expect that with the advancements in communication and improvement in infrastructure overseas, this trend will grow. A major driver for this is the prohibitively high cost of health insurance in America.
  • Offshore drug companies are already recognizing an opportunity to provide cheaper healthcare and drugs to Americans.

Advice to pharmaceutical industry CEOs

  1. Stop being in denial or hope that regulation and government will continue to be your savior forever.
  2. It is a great time to reevaluate your business model. You can still manage to influence policymakers so that they can drag their feet on doing anything substantive and this will give you enough time not only to come up with a new business model but also to implement it. So that when the time comes, you are ready to move on.
  3. While you may have the government on your side and this might give you an incentive to move slowly, offshore competitors are marching ahead. Look what happened to the steel industry!

Recommended article: Business model transformation case study: Victoria's Secret

Wednesday, November 03, 2004

Business opportunities identified from election results

An election is a great way to understand macro-trends since you have access to a very large sample size. From the preliminary results that have emerged so far, here are a few business and growth opportunities that iProceed has identified:
  1. Oil/energy prices will continue to be high. A Republican presidency means that chaos in Iraq will continue and it is very likely that Iran and/or other countries may be attacked by the United States further disturbing global peace. Great time to enter/strengthen oil/energy and security/defense related businesses.
  2. iProceed's analysis also shows a recession in 2005 and it is a good idea to enter into businesses that benefit from recessions (e.g. lower priced consumer products, used goods, etc.). (Related article: iProceed analysis on recession in 2005)
  3. Taxes will go up as government revenue remains stable or drops slightly. We expect only a modest increase in taxes. Again, as disposable incomes drop, opportunity for lower priced goods. (Related article: Tax hike expected in 2005)
  4. Terrorism will continue to be a major concern on a global basis. We expect continuation of the depressed business environment for travel/tourism, airlines/transportation but strength in home improvement. Spending on homeland security will explode.
  5. Employment situation is expected to get even worse (offshoring will pick up rapidly in 2005-06 as infrastructure overseas improves further and companies are under pressure to cut costs, particularly in pharma/biotech sector). We expect a sharp rise in home-based businesses and self-employed Americans. There are several business opportunities in serving this segment. Similarly, American companies need to think of global expansion. Most growth opportunities exist outside of the borders of the United States where most of the consumers still do not have access to what we take for granted (broadband, consumer products, financial/banking services, etc.).
  6. With the renewed emphasis on moral values, products and services related to religion present an excellent business opportunities (e.g. books/movies/websites/video games based on religious themes)
  7. It appears that gays and lesbians will have a difficult time finding broad social acceptance and will continue to maintain their niche status. Accordingly, businesses that target these high-value customers and cater to their special needs will benefit tremendously.
  8. With US taking a more confrontational approach going forward, it is obvious that the center of gravity will shift from the US but we can not think of any other single location that will assume the new role. We expect that several locations will find their niches. Japan will continue to make strides in transporting pop culture, particularly in Asia. China will develop more strength in manufacturing and operations related R&D. India will emerge as a major global player in cutting-edge, technology-oriented businesses, particularly in IT, biotech, and healthcare. While Russia and Brazil will continue to grow, it is unlikely that they will have much impact on US economy except for creating new business opportunities for American corporations.