In the modern business environment, huge technological advances in both communication and transport have contributed heavily to ever increasing globalisation. It is now commonplace to find large organisations operating as multinational companies trading in a vast number of nations around the world. Expanding a business from one country into another isn’t just a case of setting up offices and carrying out operations as usual. There can be huge cultural incongruity between nations which can have a huge impact on the way in which a business conducts both itself and its operations in order to be successful. It is essential that any business wishing to expand trade into a new country avoids ethnocentric thinking and is willing to be flexible to the culture of that nation. McDonald’s fast food chain is an excellent example of a business that has adapted and thrived in over 119 countries in 6 continents. It has achieved this by building the business around the culture rather than imposing themselves upon it. Everything from their menu’s, the décor and the price differ hugely among the different culture’s they operate within.
For any exporter (in this analysis, it is home fitness equipment), it is easier to export to some cultures rather than others. If a culture is similar to the exporters own then it will make the process significantly simpler. The challenges arise when attempting to export to a culture that is significantly different from the exporters own. When exporting from any ‘westernised’ countries such as England or America to eastern countries such as Saudi Arabia or the United Arab Emirates the cultural differences to be considered are vast and incredibly crucial to their chances of success. Saudi Arabia is currently quite a lucrative and attractive market for investors, it is experiencing high economic growth due to its high domestic oil yield and it’s imports are at an all time high. The collective revenue on imports has increased by 2.25% from last year and its current gross value has risen from $82,640,000,000 (2008) to $108,300,000,000 (2009), (index mundi 2009).
There is currently an obesity problem in Saudi Arabia, particularly among women, with 28.4% falling into the category of obese, (Eastern Mediterranean Health Journal, 2007). This can partly be attributed to the fact that it is very difficult for a woman to exercise without coming under criticism, particularly from religious leaders. Women cannot exercise in the same gyms as men for religious reasons and the only licensed women’s gyms exist only in government run health clinics, although a few unlicensed, illegal female gyms exist. The main point of opposition to women exercising in gyms is because, culturally it is believed that this will lead to vanity and them neglecting their responsibilities to their families. There are a great number of women searching for an answer to their exercise limitations, particularly from the women’s fitness group; Let Her Get Fat (LHGF). This creates a great opportunity to export home fitness equipment to Saudi Arabia. The potential for success is huge as in contrast to other countries, at home is the only place Saudi Arabian women can feasibly workout.
Despite the increase in trade to Saudi Arabia there are still many challenges for those wishing to export there. The first challenge that needs to be addressed is the legal restrictions imposed on any foreign entities wishing to trade in Saudi Arabia. Under Saudi law, any person or business that is not 100% Saudi Arabian owned must gain a Saudi Arabian sponsor for their business in order to trade there, (the-Saudi, 2009). Acquiring a...