Cultural Elements & Their Impact on International Business

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This PowerPoint slides shows how elements of culture influence global business. Marketing fiasco that have occurred in past due to lack of focus given to cross cultural issue while going global have been described in brief here.

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Cultural Elements & Their Impact on International Business

  1. 1. Cultural Elements & Their Impact on International Business Prepared byMaleeha Tarannum
  2. 2. Cultural Dimension Material Life Social Dimension
  3. 3. Cultural Dimension Material Life Social Dimension • Standard of living • Technological advancement • Covers aspects that define the ‘society’
  4. 4. Material Life
  5. 5. Material Life Economics Education Technology Material Life
  6. 6. Interrelation Economics Education Technology
  7. 7. Scenario
  8. 8.  Bangladesh is continuously growing in garment and apparel export. The growth rate is also rapid. Once, our main export product was jute. Then at one point the major portion of national export started to come from prawn export. But now the major contribution to national export is garments. The fact that contributes to this rapid growth of garment industry in country is our cheap labor. Most of these laborers engaged in garment industry are illiterate or half-literate.
  9. 9. What If………….?? A foreign company in this situation wants to invest in mining industry in Bangladesh to exploit the cheap labor available in Bangladesh.
  10. 10. Problems?? Mining Industry Available Human Resource
  11. 11. Facts?? Skill Earning Livelihood
  12. 12. Social Dimension
  13. 13. Social Dimension of Culture Aesthetics Social Interaction Time Orientation Pride & Prejudices Language Culture Religion & Belief
  14. 14. Language  Verbal Communication  Silent Language
  15. 15. What Pepsi Did……..
  16. 16.  When Pepsi expanded their market to China, they launched with the slogan, "Pepsi brings you back to life." What they didn’t realize is that the phrase translated to “Pepsi brings your ancestors back from the grave.”
  17. 17. Coca – Cola makes Mistakes…… Coca-Cola name in China was first read as “Kekoukela”, meaning “Bite the Wax Tadpole” or “Female Horse Stuffed with Wax”, depending on the dialect.
  18. 18. General Motors faced Language Complexity……. General Motors’s Chevrolet Nova car in Spanish in Central and South America: “No va”, Means… “It Doesn’t Go”
  19. 19. Baby Food??? Gerber, the name of the famous baby food maker, is also the French word for vomiting
  20. 20. Need Some More??
  21. 21. Traficante , an Italian brand of mineral water. In Spanish, it means drug dealer. Volkswagen named the sedan version of Golf the Jetta. However, the letter “J” doesn’t exist in the Italian alphabet, so Jetta is pronounced “Ietta”, which means Misfortune.
  22. 22. Implications of Verbal & Non-verbal Communication
  23. 23. Low Context Vs High Context Culture  Low context culture oriented society believes in speech. Whatever they say, they mean it. There is no room for intrigues or misunderstanding or misconception.  In High context culture speech expresses 50% of actual intention. Here, understanding ‘silent language’ plays a crucial role.
  24. 24. Ethics
  25. 25. Do you support Israel??
  26. 26. What Amazon Faced?? Amazon.com discovered that Jerusalem Post was donating its slice of the profits derived from its partnership to Israeli soldiers (to which consumers in the Middle East objected).
  27. 27. What Amazon Did……..  The internet bookstore terminated its association with the newspaper.  It asked the newspaper to remove the ads that linked purchases at Amazon.com to supporting Israel.
  28. 28. Religion
  29. 29. Nike
  30. 30. Puma
  31. 31. Bottom line……. No matter if you really intend to offend a particular religion or religious group, once they are offended you have to loss some goodwill and reputation. So better check the religious aspect of different religion
  32. 32. Other Implications……… Business Day Products to be marketed Service to be offered
  33. 33. Pride & Prejudices
  34. 34. Pride • Chinese are jealous of their cultural heritage, and they speak of it with great emotion. So do the Egyptians of their heritage • Many Americans express feelings of being deprived of cultural history in a country so Prejudice young and diverse by nature.
  35. 35. Implications  Make many nations reject foreign ideas and imported products  A perception of greatness attributed to another culture may lead to the eager acceptance of things reflecting that culture.
  36. 36. Wall- Mart Case: Impact of Culture  Entered Germany in 1997  Ended up with Bad reputation in 1998
  37. 37. What Wall-Mart did in Germany……  Ignore the local culture  Ignore local buying habits  Impose an American boss on its German operations
  38. 38.  Wal-Mart stores are designed for customers who are willing to spend lot of time shopping. But  In Germany, the shopping hours are shorter: customers don’t have the habit of spending lots of time in a store – wandering around for the things they need.
  39. 39.  German customers do not like to be assisted by Wal-Mart’s friendly store assistants. Germans prefer to do their own search for bargains.
  40. 40.  Germans like to see the advertised discount products upfront without having to ask the store assistant. This implies that the discount products must be placed at the eye level. Instead Wal-Mart chose to use its US style merchandise display strategy – where premium priced products are kept at eye level and discount products are kept at higher shelf or in the bottom racks. This irritated the German shoppers.
  41. 41.  Wal-Mart stocked its store with clothes, hardware, electronics and other non-food products were given much bigger floor space than food products, as a result more than 50% of the revenue was from non-food products. But other German retailers stock more of food products.
  42. 42. German’s are introvert in nature and doesn’t like display of emotion in public, as they always care for their private personal space. Employees, like the reserved customers, didn’t care for Wal-Mart’s public displays of corporate moral such as the morning cheer.
  43. 43. Questions??? Read More at: http://www.scribd.com/doc/207925788/Cultural-Elements-TheirImpcat-on-International-Business

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