Without a doubt ‘’Giant’’ multinational companies that have become globalized have a ‘’wised’’ ultimate strategy that was methodically exercised and lead them to a successfully entry in the global markets. Entering new markets, those firms, had to explore, observe and monitor in detail, the country’ cultures in depth, in order to enter and establish successfully their existence and growth abroad.
Culture is the ideas , customs, social behavior attitudes , political system, philosophy, economy and habits of a person or a society. (Johnson, Turner 2010:307). Furthermore, language, educational level, religion , ethics , values are additional aspects that should be taken into account , analyzed and valued when setting and laying a strategic plan when entering the market abroad. All above elements should be considered before a firm is entering a new market abroad. Therefore, culture does influence the way business operates.
Before going global, according to Rugmen (2000) a firm should already have economic competitiveness, be able to influence trade regulations and develop global orientation so it can operate as a multinational enterprise. For example, Andritz Hydro Group before entering South America market, already were the leaders in their field country for several years. Being successful in their own country Austria, Andrtitz expanded in Europe and worldwide. Andritz did not need to consider about in fluency the regulations in Brazil and Chile because those countries were already open to welcome foreign companies and investors. However, entering in Uruguay had to convince the authorities. To achieve that Andritz convinced with its dynamic existence, being global oriented and internationally leader with presence in many different counties worldwide.
Undoubtedly, there is a need of analysis in depth to be exercised by firms, to achieve the highest possible outcomes. Such a research is PESTLE analysis. Particularly, PESTLE is a management framework that is used to analyse the external factors that can affect a project, the value of a brand or the functioning of a business. There are factors that, are often out of company’s control (e.g certain rules and regulations imposed by the government), and cannot be controlled by the business, but can, however, inform and influence decision-making.
Socio-cultural factors
A vital roll, in succeeding for international business before entering new markets, is to study and analyze the communications, performance, manners, behavior, ethics and values. All these behaviors are issues, that differ, depending on which country we they getting in. This is why knowledge about culture gets important. If firms / employees are aware of these facts and prepared for the culture entering in , it becomes less noticeable and better manageable. E.g people in South America are more relaxed and friendly than in Sweden, as per Andritz. They are more concentrated on building a relationship and on separating business and pleasure. In Sweden people are concerned about equality and are very organized. They use informal language and cooperate . In Japan they use formal language. In China they use ‘’latte’’ last names. A firm should do a lot of research and write down cultural activities and expectations by the new market they are entering in.
Etiquette rules are important to be followed, to ensure productivity and efficient business relationships. CT Business travel has put together a useful infographic for a quick reference of culture differences in businesses etiquette globally.
When supermodel Gisele censored for the Middle East H&M was starring, the photo-shoot of the supermodel had been digitally altered, where a t-shirt or vest was added under the clothes, to cater for ads running in Dubai. Even though there are no dress codes enforced on women in Dubai, this was done since it is considered etiquette to wear modest clothes in public.
Example of digitally altered advertisements where on the second and fourth picture a white shirt is added (Rawi, 2011)
Religion
Simultaneously, a crucial and vital point to be considered and examined in depth is religion. Each religion has its own ethics and values. Like Islam people do not eat pork, and Hindus do not eat beef. When McDonalds entered Muslim countries altered its menu. Taboos and preferences have to be explored before entering religious societies and trade with, who are religious believers. Huge brands e.g. Dolce and Gabbana, Burberry and DKNY have targeted those markets successfully because they have designed lines particularly for those dressed fashionable and at the same time conservatively. (Alyzeera.com) The religion plays even especially an important role, even in Saudi Arabia and Iran compared with the other Middle Eastern countries.
Language
When entering a new market abroad , particularly the ones that do not speak English, the firm must be very careful because language may sometimes be a negative obstacle and create many difficulties. Speaking the language will help to build a good relationship with the foreign company, socialize more, and this will create a more friendly environment, avoiding any barriers, lies or misunderstandings. Andritz, states that ‘’language affects the negotiations process and the design of contracts’’. Microsoft is a simple software, however, the language is a part of Microsoft and there are statements of how the brand wants to be perceived. Word offers a variety of English in ‘’Australian English’’, “ English American”, “English UK”. Offering a convenience for the customers and this is expanding its reputation.
