The Impact of Culture in International Business

Many obstacles stand in the way of different firms’ efforts to enter international markets and develop globally. If these obstacles are not properly and effectively handled, they may not be able to withstand the fierce competition in the market. Cultural factors, which essentially refer to changing communal values, beliefs, and attitudes in a given area, are among the daily hurdles that businesses wanting to grow abroad confront. The case study for this article, Rocky Mountain Chocolate Factory (RMCF), intends to grow in India. The paper will thus outline cultural challenges including communication levels, English levels and attitude towards authority, how company’s culture coincides with that of India and the strategies the company should adapt to thrive in the new market.

Cultural Aspects to Consider with Expansion to India

Communication Styles

For RMCF to act global, will have to accept and embrace the local culture of India, but still, keep in mind that it is a foreigner doing business there. Among the many Indian cultural aspects that need to be considered include communication styles (Piekkari & Welch, 2014). Indians prefer a high context and indirect communication. They would rather see the whole picture, place importance on emotions, body language and impact relations, and would nevertheless prefer avoiding words like “no.” RMCF being a US-based company, the communication differences with India will be a challenge since Americans communicate in a rather low context and direct context contrary to Indians.

English Levels

A second cultural aspect to consider would be English levels. Indian university graduates and those residing in urban areas have high English level, but understanding it is a significant challenge for other nationalities due to differences in expression, vocabularies, and heavy accent. RMCF is a US-based company. Hence this will be a challenge to look out for (Piekkari & Welch, 2014).

Attitude Towards Authority

A third cultural challenge that RMCF will face is the attitude towards authority where communication between different positions is closed, hence suggestions and valuable insights from the employees will rarely be passed on to their superiors. The challenges of this caliber will negatively impact RMCF if it wants to implement quick and necessary changes, as well as failing to harness the value and experience of its staffs.

How the RMCF’s Culture and Business of Selling Chocolate Will Work with That of India

From the case study, it is apparent that decision making is bestowed with the top management team of the company as the CEO, Bryan is responsible for the management of the risks associated with the expansion of the company abroad. Indians observe and respect every decision form their top leaders, hence establishing the business chocolate in India will thrive significantly so long as the senior management make the best decisions (Ferraro & Briody, 2017). In the Indian culture, chocolate and fudge are offered as gifts during special occasions and calendar holidays. These gifts, however, as per the culture, need to be wrapped and packaged in brilliantly lit packages and not in plain white or black color.

To the advantage of RMCF, the company has over its operational years believed in limiting their sales of chocolates in brilliantly lit display cases of the chocolate manufactured and disbursed to their franchise stores. Other booming chocolate companies established in India like Royce’ Confect used the same strategy and hence ended up scooping a large market share. This thus implies that complying with packaging and wrapping culture of India presents an opportunity for the sale of the company’s chocolates in India.

Two Strategies That RMCF Will Need to Adapt to Effectively Operate in India

Competitive pricing

One size of a product does not it in terms satisfy the customer services, and so are the prices. The company that may pose as a significant competitor in the Indian market is Royce’ Confect which sells popular chocolate boxes for $10. This price is too high as compared to that in the US where it goes for 1$. To edge out the competitor, thus, RMCF can sell their boxes at a lower price, say $8, where it will have profoundly profited and benefited in attaining the more significant market share for the same product (Nagle, T, Hogan & Zale, 2016).

Conducting Market Research

RMCF, being new in the Indian market will have to carry out a market research which can be aided by finding skilled companies to handle the task. The research would reliably inform RMCF of the customer preferences so that the chocolates can be tailored to the precise needs of the target market. Chocolates that satisfy the preferences of the customers increase their willingness to pay for the product, which then translates to the company thriving in the Indian market.

Conclusion

Assessment of Indian culture above has highlighted the major challenges that RMCF will face in its quest to expand in India which include English level, attitudes towards authority and communication styles. With practical solutions to the above challenges provided, the chocolate sale will thus thrive well in the new market, which will also be aided by similarities in the company’s culture that rhyme with that in India. To transition smoothly in the new market, RMCF will have to adopt competitive pricing to bay the local competitors, and also conduct a market search to ensure that the chocolates are tailored to the specific needs of the Indian market.

References

Ferraro, G. P., & Briody, E. K. (2017). The cultural dimension of global business. Taylor & Francis.

Nagle, T. T., Hogan, J., & Zale, J. (2016). The Strategy and Tactics of Pricing: New International Edition. Routledge.

Piekkari, R, Welch & Welch, L. S. (2014). Language in the international business: The multilingual reality of global business expansion. Edward Elgar Publishing.