Cultural Factors Affecting Business Development

Only available on StudyMode
  • Download(s) : 644
  • Published : March 11, 2013
Open Document
Text Preview
Cultural Factors Affecting Business Development

TK Maxx Entering Japan
Individual Report

International Management

SZ376U

Introduction

As with most international products and services decisions an organisation can either adapt or standardise their promotional strategy and message. Basic marketing concepts inform businesses that they will sell more of a product if they aim to meet the needs of their target market. In international markets, consideration of the consumers cultural background, buying habits, levels of personal disposable income etc in order to deliver a tailored marketing mix program to suit their needs. This report will consider the Cultural factors affecting transnational business development if TK Maxx was to enter Japan.

In today’s global world, where consumers travel more, watch television, communicate and shop internationally over the internet, the world seems to be becoming a lot smaller. Brands such as Coca-Cola, MTV, Nike and Levis are all successful global brands where they have a standardised approach to their marketing mix; all these products are targeted at similar groups globally. In many circumstances a company will have to adapt their product and marketing mix strategy to meet local needs, wants and cultural factors that cannot be changed.

Due to such rapid and large-scale expansion of global businesss the world is continuously being assimilated and homogenized, and yet at the same time, uncovering more about its cultural diversity. Every day in and outside of global corporations different cultures, norms, and standards meet and interact. (Black & Mendenhall, 1990; Zonis et al., 2005; Collins, 2008). Different cultures breed different socio-politico-economic systems and paradigms. This means that economic systems and policies, market mechanisms, financial institutions, corporate systems and governance are all inherently culture-bound. Therefore, understanding different cultures is critical in understanding different systems.

Today managers, shareholders, employees, business partners, and other corporate stakeholders make decisions and choices that draw upon different cultural background and perspectives (Thomas & Ely, 1996; Adler, 2002; Gannon, 2004; Gitman & McDaniel, 2008). Without comprehension of cultural diversity, the solutions for global business issues will not be complete.

The Effects of Culture on Business Development

Terpstran (1987) has defined culture as follows: "The integrated sum total of learned behavioural traits that are manifest and shared by members of society" Culture, therefore, according to this definition, is not transmitted genealogically. It is not, also innate, but learned. As with all international product decisions, an organisation can either adapt or standardise their promotional strategy and message. Traditional international business research has been concerned with economic/legal issues and organizational forms and structures, the importance of national culture – broadly defined as values, beliefs, norms, and behavioural patterns of a national group – has become increasingly important in the last two decades, largely as a result of the classic work of Hofstede (1980). National culture has been shown to impact on major business activities, from capital structure (Chui et al., 2002) to group performance (Gibson,1999). Accoring to Hofstede (1980), Countries in Asia have generally low uncertainty avoidance (Figure 1). Therefore it is a society that is less concerned about ambiguity and uncertainty and has more tolerance towards variety and experimentation. Such a society is less rule-orientated, readily accepts change and is willing to take risks.

Figure 1

Cultural advantages can arise from different cultural values and ways of seeing the world. To realize competitive advantages from them, it is first necessary to try to understand them. For cultural differences to be lower these should be managed. According...
tracking img