Risks Related to Cultural Disparities

My business, a global coffee franchise with operations in Europe, is looking to grow so it may enter the American, Asian, and African markets. The consumption of coffee in the country, the average income per person, and the concentration of coffee shops in the country all affect the future growth of my company, a coffee restaurant (Alon & Lohwasser, 2012). Europe consumes a lot of coffee, therefore coffee drinking is part of their culture. On the other hand, America is a prospective market for the coffee industry. The American consumer, however, enjoys being seduced by the presentation and is aware of the product’s health benefits (Alon & Lohwasser, 2012). For instance, the American coffee consumer will be interested in the health benefits of the product and the method of preparation, whether the company uses organic products or whether the coffee beans are genetically modified. Also, the American market is interested in the process such as the roasting of the coffee beans.

China, on the other hand, is initially a tea market (International Trade Centre, n.d.). The number of coffee shops in China is few as compared to Europe and America. The coffee consumption in China is consequently very low. Research showed that the coffee consumption in China is high in the urban centers only. The Chinese consider coffee as a beverage that is for the top income earners therefore just people who have a disposable income are the ones that usually purchase coffee (First Research, Industry Profile: Coffee Shops, n.d.). In Africa, Kenya exports a lot of coffee to the foreign markets. However, they are weak consumers of the product. Majority of Kenyans also prefer tea to coffee. The culture in Kenya is that the coffee is a preserve of the high-income earners who have disposable income. Consequently just like in china coffee sales are high in urban centers due to the different cultures present the expatriates working in the country (International Trade Centre, n.d.).

These different markets pose cultural risks to expanding my business to these areas, and therefore they need various strategies to ensure that the company stays relevant. For instance, when dealing with the American market, I will ensure that our outlets have the most sophisticated machines. Also, I would ensure that there are a variety of coffee types to choose. I would even customize the products to ensure that we consider the clients that are health conscious. For China and Kenya market, the risk management will involve a lot of marketing strategies. For instance, I would lower the price of coffee slightly so that I can provide an option for clients who take tea. Also, I would include coupons and discounts as a marketing strategy to appeal to customers. I would also incorporate free internet in all the cafes such that even corporates and students can come to the outlet have their coffee and do their work, the students too could finish their assignments while sipping coffee. The consumer culture will also influence the decision of which market the company should venture first. For instance, my company would consider venturing to the United States of America first. The United States already has a consumer base for coffee. I would only require the products offered in our outlet to conform to the culture of the American consumer. After the success of venture in the American market, I would pick between China and Kenya the country that the statutory regulations favor opening up of a franchise.

References

Alon, I., & Lohwasser, M. (2012). The Espresso Lane to Global Markets. Richard Ivey Scool of Business Foundation. Retrieved December 11, 2017, from http://www.elmayorportaldegerencia.com/Documentos/Mercadeo/[PD]%20Documentos%20-%20Ivey.pdf

First Research, Industry Profile: Coffee Shops. (n.d.). Retrieved from ” http://search.proquest.com.ezpprod1.hul.harvard.edu/abicomplete.docview/192463238/fulltextPDF/1321075EF8488208B4/11?accountid=1131

International Trade Centre. (n.d.). The Coffee Sector in China. Retrieved from Intracen Website: www.intracen.org/WorkArea/DownloadAsset.aspx?id=37584