2. Individual Assignment: The Cultural Challenges of Doing Business Overseas
Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, has decided to expand his business into the Czech Republic. He knows it is a risky decision because when he became a franchisor, he had to overcome many difficulties. Steve anticipates he will face some of these difficulties again at the new location in Prague. Although he was born in the United States, he has family and friends in the Czech Republic, speaks Czech fluently, and has visited his country of origin several times. In other words, he seems to know the people and the culture…or does he?
Resources: CultureGrams and Country Watch in the University Library
Write an 850- to 1,050-word paper in which you address the following questions:
o Are there major differences and incompatibilities between U.S. and Czech cultures? Will these differences create major business risks for Steve? How might Steve mitigate these risks?
o What comparative advantages exist in the Czech Republic? Can Steve take advantage of these?
o Will Hofstede’s four primary dimensions help Steve evaluate the Czech business environment? What are the likely results of this evaluation?
o Of what kinds of trade barriers would Steve need to be aware?
o How would Steve assess the demand for pizza at different prices? How would he assess the cost structure he would face? What could Steve infer about the price and income elasticities of pizza?