The Cultural Challenges Of Doing Business Overseas

RUNNING HEAD: THE CULTURAL CHALLENGES OF DOING BUSINESS OVERSEAS

The Cultural Challenges of Doing Business Overseas

Cristal Mitchell

University of Phoenix

Introduction

To the average person, the idea of opening a pizza franchise in the Czech Republic sounds odd. Here's what's interesting: the franchising sector in the Czech Republic is steadily growing and the concept of franchising is becoming familiar to an increasing number of companies and individuals (www.factbook.net).

American Steve Kafka has made the decision to expand his business and open a Chicago Style Pizza franchise. Steve knows there will be some challenges placed in his path because with any new business venture risks are to be expected. Steve may have a slight advantage because he is of Czech descent, he has family and friends who live in the Czech Republic, he speaks Czech fluently and he has traveled to the Czech Republic on several occasions. Having said that, this does not mean the process will be easy because Steve is an American business man and there are distinct differences between the American and Czech culture.

The purpose of this paper is to identify and analyze the cultural challenges of doing business overseas, evaluate the differences, and determine the opportunities.

Differences and Incompatibilities

There are plenty of differences between the Czech and American cultures. For the purposes of this analysis, the focus will be on the general attitude, diet, and eating practices of both cultures.

Americans have the tendency to be more outgoing, vocal and laid-back, whereas Czechs are more reserved. For example, if a person speaks loudly in a public place like a train, it is not uncommon for Czechs to watch and follow the entire conversation. Additionally, Czechs tend to be very respectful of people who are older such as a teacher or an older friend.

There are some major differences between the diet of the American and the diet of the Czech. Americans are accustomed to an abundance of fast food. This may be due in part to the busy lifestyles Americans lead (Culture Grams World Edition 2006). Americans do not have an "official" national dish because Americans tend to enjoy foods adopted from the national cuisines of immigrants such as Mexican, Chinese, and Italian as well as others. Meats such as beef, pork, chicken and turkey are consumed in rather large quantities. Fresh vegetables and fruits are available year-round. Americans also enjoy trying new foods. On the other hand, the traditional Czech cuisine is heavy and difficult to prepare. For Czechs, lunch is the large meal consisting of a hearty soup, followed by a main dish of meat and potatoes or bread dumplings. Dinner is typically a smaller meal such as a sandwich piled with ham, cheese, caviar, or eggs. Pizza or hotdogs are among the most popular snack foods for Czechs.

The eating habits of each culture differ significantly. Czechs usually have two snacks during the day in addition to their large lunch and smaller dinner. Czechs do not usually eat breakfast; drinking coffee for breakfast is the norm. Americans traditionally eat three meals a day with dinner being the largest meal of the day.

Perhaps the biggest difference between the two cultures is the frequency of dining out. Americans dine out on a regular basis. It may be at a local restaurant or grabbing a quick bite from the drive-thru of a fast food chain. Conversely, Czechs do not dine out often.

Identify Major Business Risks

As Steve embarks on this new business venture, he will face three major obstacles. The first obstacle is that Czechs do not dine out often. It is going to be difficult to have a successful Chicago style pizza franchise when most of the targeted consumers do not dine out on a regular basis. The second obstacle is that the franchised product is considered a snack instead of a meal this will make a considerable difference in the amount product sold. Lastly, competition from other pizza franchises such as Pizza Hut and street vendors will pose a challenge.

Mitigating potential risks

The fact that Czechs do not eat out often is probably the biggest challenge; however, Steve can use this challenge as an opportunity to market his franchise as a family-oriented location focusing on the fact that Czech families are traditionally close and tight-knit. This might motivate them to dine out more often and frequent his franchise. Next, since Czechs consider pizza a snack, Steve may want to modify his franchise to compete with the pizza selling street vendors. Perhaps set up the franchise as a take out facility similar to the street vendors. Lastly, Steve can use the competition of Pizza Hut as an opportunity to market his franchise as "local" vendor. Steve can use the knowledge and background of his family and friends as well as his own Czech cultural experiences as a way to assimilate into the Czech culture. .

Hofstede's Four Primary Dimensions and the Czech Business Environment

Global Communication can implement their

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