U.S. Business Practices to Practices in the Proposed Asian Country Essay

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Global

Three cross-cultural differences to consider if company expands into the global market basing on a selected Asian country.

Companies in developed economies are increasingly moving into the developing world searching for new customers and talents, a situation that has been brought about by their hard struggle in their own home markets. (Unit, 2012). Culture, as noted to influence consumer market and behavior, should therefore be greatly considered when choosing the international market strategy. Many cases have proved that the environment of a local culture, given a specific country or region, influences the market strategy as well as the way and the quantity that a company exports (Cui & Ting, 2009).

1.

Language

Sociologists believe that languages form the basis of cultures and without languages, no culture would exist. In another light, cultures influence languages and languages reflect cultures. Chinese as a mother tongue is spoken by thrice the number of population that speak English which is the second largest language. Despite that fact, English still leads as the first official language spoken based on statistics. The entire population of a country doesn't always speak the official language and for this reason market analysts use the word "country" to mean "culture." Research indicates that culture is something that we learn from the environment and then give back the same experiences, opportunities and behaviors to people of the same environment (Cui & Ting, 2009).

2.

Consumer Behaviour

Culture is one of the major factors that influence consumer behavior (Hofstede, 1994). When analyzing consumer behavior in international markets researcher suggests the following steps; determine relevant cultural motivations, characteristic behavior patterns, cultural values relevant to the product, forms of making decisions, culture appropriate promotion methods, as well as appropriate institutions in consumers' minds (Cui & Ting, 2009).

3.

Country risk

Country risk refers to the political, financial and economic environmental uncertainty (Erb, Harvey & Vidkanta, 1995). Political risk on the other hand refers to the adverse change of laws and regulations of the host nation to a foreign firm which could be as a result of tariff imposition or as a way of regulation or political unrest emerging from pressure groups. Financial and economic risks may take the form of market decline, currency crises or inflation outburst. Reasons for such occurrences arise due to imbalance in the fundamentals of the economy like balance of payment and setbacks resulting from inheritance of business cycles (Johnson & Tellis, n.d.).

Differences in the U.S. business practices and the proposed Asian Country

Product

China

The first McDonald's restaurant was situated in Shenzhen SEZ, China on the 8th of October 1990 as mentioned by the marketing managers. The world's largest McDonald restaurant was later opened in April 1992 on Wangfujing Street, Beijing. Adding some adaptable products to the menu to adopt to Chinese market, McDonald did not change the core products like Big Mac, fries, Coca-Cola, Milk Shake for customers to enjoy the Western-style fast food. The local menu was changed to china to meet the demand of customers because they decided to study groups of new food groups and interests in Hong Kong. The spicy chicken sandwich was mixed into some Chinese characteristic by putting spicy chicken into a sandwich and this was brought into the market for instance. Products like scrambled eggs, pancakes and tea can now be found in the McDonald's menu as part of the Chinese breakfast (Cui & Ting, 2009).

America

McDonalds discovered that environmental adaptation ensures success of cost saving as much as standardization does, hence the concept of 'think global, act local'. The structure of McDonalds' menu remains the same despite recent additions; main course burger, fries and a drink. Fries are the secret to these successful combinations as opposed to Big Mac and generic hamburger seen by observers. The signature innovation of McDonalds of thin and long fries from russet potatoes is always available and eaten by all customers regardless of the variation in the main course in America (Vignali, 2001).

Price

China

Being a country with lower economic levels than America, McDonald uses the low-price strategy keeping in mind the consumer's consumption level. For instance, the Big Mac would be cheaper in Beijing compared to Boston as pricing of the same product may be different in different countries (Cui & Ting, 2009).

America

Environmental adaptation can also result in success regardless of the cost saving from standardization. Implementation of pricing strategy is better placed locally than globally.

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McDonalds' overall objective during pricing is to increase market share, a process in America which is used for pricing particular markets like selecting the price objective, recognizing demand, cost estimation, analyzing competitors cost, prices and offers, and selecting a pricing method and final pricing. With this fact, a Big Mac with fries costs the same as a worker's total wage of 14 minutes in Chicago (Vignali, 2001).

Promotion

China

Delivering coupons is a vital promotion strategy of McDonalds to attract more customers, a confession made by a marketing manager. Coupons have not gained popularity in Chinese markets as much as they have in the western countries because of customer's habits in real life. The good relationship with customers has made advertisements emphasize on Chinese traditions like celebration of the Chinese New Year, calligraphy and New Year wishes.

America

Considering a variety of cultures in America is vital for McDonalds to localize its marketing strategy. Ignoring the local markets and factors that may affect its production performance may prove to be naive. There is need to analyze consumer's attitude, usage patterns, and ethnic, moral and religious aspects of the environment (Vignali, 2001).

Place

China

Most McDonalds' restaurants are built close to large-scale facilities and establishments in Beijing; a fact mentioned by the marketing manager in an interview. They choose such places to target easy adaptation to the American fast-food (Cui & Ting, 2009).

America

Adding 300-400 restaurants in USA every year was a strategy that McDonalds used to create a gap with their competitors despite the circumstances. They could even have built more when competition was still low. As their business grew they applied the strategy to markets with mild competition. This strategy has been applied to a great extent; and they can now share these ideas from America to other countries, a move that has enhanced their competitive advantage and strengthened their leadership position in present time (Vignaali, 2001).

Ethical issues that will require understanding and respect as business expands

Human Rights

In China, the topic of Human Rights is still controversial mostly including political and civil rights, human trafficking, child labor and supply chain. A lot of scandals have come forward like the one of a factory in Shenzhen where some workers committed suicide due to the factory's working conditions. The suppliers of big companies like Nike and Apple had poor conditions and child labor including less pay and a lot of working hours (IRWIN, 2012). Politicians think twice when investing or doing business in China because they think that investing in China would only benefit the dictators and violate the basic human rights in that country. The different human rights organizations have said that the policies that have been made by the western world regarding China has not done anything to lessen the abuse of rights; instead these countries take advantages of the environment of China and make profit out of it. This is the reason why countries do unethical business instead to increase their profits, but in order to not violate the human rights; it is the duty of the firm to make standard policies. China however is one of the best options for countries looking to grow their profit and produce their products with low costs, but this does not necessarily mean that they violate the rights of the people and misuse the regulations of China (Serkan, 2007).

Clear Guidelines

Clear guidelines on decision making and a list of rules stating the dos and don'ts of practices in a business is a must-have for managers. However, such rules sometimes prove too simple to guide cross-cultural ethical interaction. For instance, giving of gifts is allowed in many cultures but this act may be regarded as unethical in others. In other citations, societies like China associate a presentation of a small, carefully chosen business gift to a lot of respect as a portrayal of a good business relationship by the one who gives. In any case a problem may arise, it will be with the one who receives as a sign of distrust of the giver's intention. If such a situation comes up then the only understanding can be that of a business etiquette (Pitta, Fung, & Isberg, 1999). This is a big ethical concern for any foreign firm investing in China as the business etiquette in China has numerous intricate specificities taht businesses will need to adopt with clear understanding so as.....

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