Running head: CULTURAL CHALLENGES OF DOING BUSINESS OVERSEAS
Cultural Challenges of Doing Business Overseas
Richard Sullivan
University of Phoenix
Forces Influencing Business in the 21st Century
MMPBL 501
Thomas Byers
July 19, 2010
Cultural Challenges of Doing Business Overseas
Some Businesses finally come to the realization that growth must exceed the boundaries of the United States and expand globally. Chicago Style Pizza has made the leap of faith. However, one must look at the culture of the host nation and understand the differences and incompatibilities. Additionally, find ways to take advantage of the comparative advantages within the host country. Evaluate the business environment, identify the trade barriers and develop the cost and pricing structure for the business.
Culture
The Czech Republic is not so far from the United States. In fact, the Czech Republic has a stronger economy than the United States. According to the State Department, the Czech Republic has been growing at a rate of 6% over the last few years. Additionally, unemployment rates are at around 8% (Bureau of Public Affairs, 2009, p. 1).
One major obstacle is the lack of domestic funds to invest in the franchise ideology. The Czech Republic does not have the financial resources for individuals to invest in franchising. However, one of the ways around this is to provide corporate funding and maintaining corporate management control (U.S. Dept of Commerce, 2000, p. 1). The risk with this endeavor rests with the corporation. Normal franchising policy gives individuals the tools needed to run a successful business. In the Czech Republic, the corporation retains control and just provides the goods and services to the Czech public.
Another challenge is the cuisine. Research must be done to incorporate the local tastes into the pizza product. An example would be if Chicago Style Pizza wanted to open a franchise in India, the business would...