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The Cultural Challenges Of Doing Business Overseas

1834 words - 8 pages

Czech has been moving over the last decade and a half from a centralist socialist economy toward a democratic capitalistic economy. The Czech country is not part of a legal country of states like the United States that forms the U.S. capitalistic market; the Czech economy is trying to expand its country's economic market by transitioning its old socialist planned economy into the European Union. The point is that Czech economy will have a larger market similar to the United States, but Czech will remain its own country. Similarly, to the United States, the membership of the European Union has monetary advantages in terms of having a bigger market like in the United States. Some of this ...view middle of the document...

In Czech, delivery to the door is a relatively new concept and many Czech people are not used to this convenience of having food delivered to their homes. Some Western entrepreneurs have used advertising campaign to teach the Czech people about the space age technology of keeping pizza warm (Kennedy, 2006) Americans are completely different with modern conveniences like drive-through windows at fast food restaurants. In contrast, Czech does not have a disposable fast-paced-mentality like in the U.S.. Czech has a long history of tradition compared to the U.S., and Czech country is a very old culture. (Prague City, 2006).The comparative advantage of opening a business in the newly forming Czech economy is that although the monetary situation will be inflationary with the conversion to the European dollar. Czech is considered similar to western economies like Ireland; foreign multinational corporations have moved into Ireland and Czech because the economies are cost-effective places to do business. This will be a comparative advantage for Steve to experiment with new products in this new capitalistic Czech economy, if his products are cheap and good quality. The new jobs that people will have from working for the Western multinationals will create potential customers with money to eat pizza out at a restaurant (Kaitla, 1999). To get over the resentment of the new economy he is going to have to have a warm campaign to welcome new customers whom are not used to the western cultural ways (Kennedy, 2006).Steve has the advantage of skilled bakers, which are abundant in Czech. These bakers will make him a profit such as he could exploit the newness of the Czech capitalist economy and develop fresh commercial pizza products for the grocery store. Or, he could get people to buy and to take home the pizzas to cook as Czech people frequent local markets often. If he is thoughtful about how he pursues his new business he has the advantage that Czech will welcome new but traditional forms of the baked food there.Steve is giving up the big pizza market of Chicago, but his risk will lead to new promising markets in Czech. He may be giving up his comfort of his home culture in the U.S., but he could sell the franchise rights of his own pizza and beer hall design which would be more popular in surrounding big cities like the city of Prague in Czech. Just by exploiting what comes naturally to the region of Prague and serve the pizza with beer. Steve has the advantage of generating more revenue for his business with the pizza and beer combination (Jarrett, 2000). To be an entrepreneurial leader and not be unsuccessful like other westerners he has to use his Czech cultural background to his best ability. (Kennedy, 2006)Since the U.S. conversion rate of the U.S. dollar to the Koruna is in his favor, any capital he raises in the U.S. to invest in his Czech pizza industry will cover more expenses in Czech because of the higher value of the U.S. dollar. Moreover, the...

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