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Evaluated The Impact Of Cultural Differences On International Business Performance In The International Market
Localization debate versus Globalization
The importance of cultural differences in international businesses
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Introduction During the first part of this class, we talked about globalization and Localization. The different forces of the two. One is more powerful than the other because of the forces. Companies should consider national differences in order to be successful in their business. However, during the second half of this class, we learned about different international business strategies, what foreign markets to enter, & different entry modes. Each of the entry modes have advantages and disadvantages.
Globalization
First force of globalization, would be advancement of technologies. For example, development in telecommunications and information technology. Second force, would be openness/liberalization, such as imposing tariffs on goods and service. Most government established the free trade which it increased the growth rate of the economy. Third, market opportunity which is knowing consumer tastes and preferences. Finally, collective goods and global governance is the last force in globalization. It is an important factor, because of the intergovernmental organizations (IGOs) and non-governmental organization (NGOs) control some of rights in the business.
Localization One force, geographical differences, because distance matters when localizing. In addition, this concept of localization is localizing in a certain area or
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If a firm wants to go aboard and wants to expanding its products. It is beneficial to know about the other nation’s difference, such as consumer tastes and preferences. Furthermore, the nation’s cultural differences are different from others. Every nation is unique in its own way. In addition, adapting to another countries cultural and other differences, will help ones business. For example, Wal-Mart in Germany, was not successful because Wal-Mart took its American style to German. In addition to that, Germans are different from Americans, such as language, food, and
Globalization is a series of social, economic, technological, cultural, and political changes that promote interdependence and growth. Globalization raises the standard of living in developing countries, spreads technological knowledge, and increases political liberation. Harris 5-23. The main cause of globalization is influence from other, more developed, countries. Globalization is a historical process that results from human innovation and technological progress.
Today, many companies enter the global market, and some companies have become extremely successful in the global marketplace and others still struggling. In Theodore Levitt’s article “The Globalization of Markets”, he states that a well managed corporation focuses on selling standardized products with high quality and low priced instead of focuses on selling on customized products with high cost. Levitt defines the differences between multinational corporation and global corporation, and adopts many specific examples to proves his view. He defines the multinational corporation who operates in many countries and adjust its product based on the taste of specific region. This will result in a high cost to produce the product because company have to input more resource into each individual product. However, global corporation sells similar product worldwide at relative low cost. According to Levitt, the cultural differences are becoming more and more “homogenized”; therefore, becoming a global corporation will lead to the successful of the company in the global market.
International/Global Perspective Identify global issues relevant to business decisions.? Describe uncertainties about the cultural and financial impacts of moving into new markets and expanding existing markets. Analyze the cultural and financial impacts this company faces when moving into new markets and operating in expanding, existing markets. Discuss unique global customer and supplier demographics.? Identify and communicate the variety of threats and opportunities they face in conducting business in a borderless world. ?
With businesses fast emerging and competition strict as ever, most businesses seek ways to expand internationally in order to ensure their position in the competitive market. Although globalization-the shift toward a more interdependent and integrated global economy- creates more opportunities for international business, some business attempt to expand blindly in a different country without considering issues such as culture clash, other businesses tackle the competition through strategic changes in order to accustom to the new culture.
In internationalization, the most challenging decision faced by the company to choose between standardization and adaptation in its operations, products or services. It has been one of the important and most popular research topics since 1960s to understand whether standardization is better or adaptation for marketing mix in international marketing. The increasing role of international expansion of business across the borders has also increased the focus of companies towards the international marketing strategies. It is also a biggest challenge for companies to better understand the different needs and choice of customers due to the huge differences among the cultures from various nationalities. This leads to the dilemma in the mind of marketers to understand which strategy is effective and good - standardization or adaptation. There is a significant impact of standardization or adaptation on all avenues of business such as research & development, structure, marketing mix, production, finance and marketing mix. The attitude of a company towards the culture of a particular country in which it is going to enter or start its operations decides to choose between standardization and adaptation. Consider the different views and arguments for each standardization and adaptation, this essay critically analyze which strategy is better to choose for international marketing.
Globalization is huge part of the success of some the biggest firms today, from Apple, General Electric, to Google. It allows a business to develop international. It allows reduced costs by maximizing production known product lines, allowing to expand into different markets gives a more competitive edge and expanding to new technology helps to increase to a bigger company, having more political edge within trade agreements.
For one to understand the costs and benefits of globalization and localization, one first needs to understand what each entails. Globalization is when a country involves itself in international affairs, economically, politically or even possibly culturally. Globalization expands beyond the local boundaries of a nation and spreads into other communities throughout the world. Localization is when a country chooses not to participate in global affairs and confines itself and its people from taking part in any type of involvement with any other country. This means that this country does not participate in any economic, political or cultural issues with outsiders.
All of these aspects come together to form a strong local culture in foreign markets, and it is imperative that companies understand the importance of adapting to them. These gaps determine if there will be a strong acceptability of the goods in the new market. For example, this cultural gap proved to be a very large challenge for Disneyland when trying to expand into Paris. Upon entering Paris, Disneyland made the mistake of using its traditional methods to "force-feed" US products to the local culture (Matusitz 2010). The local people were not impressed by the imposition of this new park, especially since Disney had taken no steps to get a firm understanding of the local culture into which they were entering.
The differences in other cultures vary from beliefs to ways of life, or norms, of the different societies. The importance of understanding and sensitivity to other countries’ differences is crucial to a business’ success. “Lack of familiarity with the business practices, social customs, and etiquette of a country can weaken a co...
Globalization refers to the absence of barriers that every country had. Yes, it has helped to demolish the walls that separated us .Globalization, which is the process of growing interdependence among every country in this planet, can be seen as a sign of hopeful and better future by some, but for others it represents a huge disaster for the whole world. That’s why we are going to see the negative effect that globalization has on culture then focus on the ethical disadvantage it brought, to finally talk about the damage it did to skilled workers.
Globalization is an overwhelming trend. It is no doubt that there are many positives rise out of globalization, but equally some serious negatives brought from this trend, such as gradual disappearance of ethnic identity (Buckley, 1998). This essay is going to address some positive effects of globalization generally, and then it will focus on impacts of this trend on developing countries.
Globalization can not only affect a company opening an office in another country but it can affect a small local business as well. As the internet brings the world closer together it becomes far more likely that a business that opened with no intention of selling internationally will have customers form different parts of the world asking for their product. For instance a steel company located in Pennsylvania may suddenly find orders coming in from South American factories. How the steel plant chooses to handle this new international customer could mean ...
Globalization is also a term that is often misused interchangeably with other terms such as world society, globalism, universalism, and interdependence because many people believe that they all have the same basic and essential meaning. Localization, another important term also commonly misused due to the lack of clarity in it’s definition, mainly focuses on individuals and groups that narrow their horizons due to pressure and therefore participate in different forms of behavior in comparison to other groups. In this paper, the main issue of discussion will focus on the significance, cost and benefits, and basic definition of globalization and localization, as well as fragmegration (an integration of the two dynamics, globalization and localization). Finally, this paper will also discuss how these terms relate to and affect real life situations such as the Asian economic crisis.
a company can familiarize itself with cultural nuances which may impact the design, packaging or advertising of the product. Moreover, traveling abroad allows one to locate and cultivate new customers, as well as improve relationships and communication with current foreign representatives and associates
Globalization is a term that is difficult to define, as it covers many broad topics in the global arena. However, it can typically be attributed to the advancement of economic, social, and cultural interactions among the companies, citizens, organizations, and governments of nations; globalization also focuses on the interactions and integration of countries (The Levin Institute 2012). Many in the Western world promote globalization as a positive concept that allows growth and participation in a global community. Conversely, the negative aspects rarely receive the same level of attention. Globalization appears to be advantageous for the privileged few, but the benefits are unevenly distributed. For example, the three richest people in the world possess assets that exceed the Gross National Product of all of the least developed countries and their 600 million citizens combined (Shawki and D’Amato 2000). Although globalization can provide positive results to some, it can also be a high price to pay for others. Furthermore, for all of those who profit or advance from the actions related to globalization, there are countless others who endure severe adverse effects.