Cultural Challenges Of International Business Essay

1747 words - 7 pages

Steve Kafka, a franchise owner for Chicago Style Pizza, is contemplating the options of opening a new franchise into the country of the Czech Republic, the country of his family's origin. Though Steve has made several trips into the Czech Republic, speaks the language and knows many people, he must seriously consider all of the opportunities and potential barriers to this new venture. I will explore the cultural differences between the United States and the Czech Republic. Next, potential competitive advantages are examined along with Hofsteade's Primary Cultural Dimensions to reveal clues to the culture pertaining to the new business. Finally, trade barriers and price income and elasticities are discussed.
Culture Differences
There are several differences in culture between the United States and the Czech Republic, though those differences are not unconquerable Steve will have to understand some basic principles of business etiquette that are considered acceptable in the Czech Republic in order to be prosperous. For a business, word of mouth advertising is the best way to gain new customers. If a major advertising blitz is attempted, it may be considered suspicious and might backfire if not coupled with local store marketing(Czech Republic: Travel information, 2008). As contacts with other local businesses are needed to make the new franchise successful, such as produce and drinks, appointments with those businesses should be made weeks in advance. The Czech's prefer not to have last minute engagements. Many marketing techniques should be implemented in person instead of by mail which is impersonal. Mailing could be considered rude and could be perceived as a scam. As an employer, it should be understood that mothers and fathers are expected to receive several months of paid leave when a new child is born. Once the business has started, Steve must take this into consideration when hiring workers and have the capital to pay for this leave when the need occurs (Czech Republic, 2008). As well, there are some differences in dining etiquette. All foods are eaten with knifes and forks as opposed to eating food with the hands, such as the traditional American way of eating pizza. However, this practice is starting to be contested, as snack foods such as pizza and hot dogs are becoming more common. Along with this, it would be advantageous to ensure that the business is well stocked in local beers since it is considered the beverage of choice among natives (Country review: Czech Republic, 2008). Also a salad bar would help bring in a diverse crowd increasing traffic flow in the restaurant.
Potential Competitive Advantages
There are several competitive advantages in the Czech Republic that make it a good location for starting a new franchise. The general labor costs are low and technical skills are considered high compared to the rest of Western Europe. This could be used to the advantage of the business to foster stronger growth....

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