The Differences between a Foreign Culture Compared To a Domestic Culture

            Culture can be defined as beliefs, values, experience, knowledge and customs existing in a particular society. The current economy is becoming increasingly multicultural with a mixture of employees born from different countries for example America’s workforce has closely 16% outside employees. Mixture of cultures in business is so important because new skills and new knowledge are being acquired about other cultures (Czinkota & A 2007). This will therefore require a clear understanding of the different cultures. Some of the differences include the different laws and regulations, different buying habits of customers (Alcantara-Pilar et al, 2015). Thus when operating a business internationally, you will have to change your strategies of marketing to fit the ones of the country you are entering. Some of the market cultural differences that exist between the foreign market and the domestic market are discussed below.

            The level of competition; foreign markets competition is more likely to be complex than the competition in domestic markets. This is certainly because of many and powerful participants in the foreign market than in the domestic market (Czinkota & A 2007). To assess your ability to compete in a foreign market, one may use Porters 5 Forces tools which assess the power of the buyer, supplier, competitor, and threat of new entrants.

The other difference is market intelligence; the market intelligence required in a domestic market may not require much study like what is required in a foreign market. There are key points to consider while gathering market intelligence on the intended market. It is important to know how the market works, your direct competitors, and the best strategy of entering the market. However, it is hard to get reliable information for some markets especially less developed economies due to less sophisticated statistical agencies.

            Legal systems; different countries have different legal systems. Every government has its own policies regarding foreign firms. This creates a difference between a foreign market and a domestic market. By understanding this, you have to abide by the laws in the foreign market not the rules in your home market. These laws can cause an impact for business long term success and it is always good to consult with legal counsel of that particular country so as to lessen the risk that these laws may affect the operation of the firm (Alcantara-Pilar et al, 2015).

            Technology also causes the difference between foreign and domestic market culture. In case your product needs a high technology to be used, markets with low  technology cannot suit that business. Similarly, logistics cause the difference between these two markets due to the difference in the level of infrastructure development. The way of getting your products into the market in the domestic market is different from that in the foreign market. Lastly, forms of media differ in foreign and domestic markets. It is important to know the types of media available in the foreign market basing on your target market at that specific country.

Interview

The first interviewee

Question: Where do you come from?

Response: I come from Switzerland

Question: just discuss the business practices and management styles in your country

Response: in Switzerland, there is a formal and conservative business climate and companies are in a traditional vertical manner structure. The culture of the companies varies depending on the location of that company. We have four official languages that is German, Italian, French, and Romansch. Therefore before establishing a business there, you need to be familiar with those mentioned languages. In most of our organizations, employees have little responsibility. Generally, it is the management that has a large responsibility for planning. Business meetings are impersonal, orderly and task oriented. Negotiations in Switzerland require patience and very precise and cautious discussions. Generally Swiss are known to be fair bargainers.

Second interviewee

Question: where do you come from?

Response: I come from China

Question: just describe the business practices and management styles in China

Response: I will majorly base on the business management of culture in China. We do believe that the way responsibilities are given to the employees determines employee behavior in an organization. In china employees have less personal responsibility at the place of work, meaning they are not always independently accountable for a specific task but rather judged in the group. On the matter of time, Chinese spend much time discussing business and making decisions as a way of building relationship with people before doing business. Furthermore, in china, employees focus on long-term commitments expecting long term rewards. 

            Basing on the two interviews taken, significant differences have been observed on how business is being done in the two countries compared to America. Firstly, in Switzerland just like in china, employees have less individual responsibility hence they are not accountable of a given task. This is contrary to American culture where employees are assigned tasks with designated responsibilities, and they are accountable for the task they perform (Boeing, 2013). Also the way Americans value time in business is very different from the way china does it. Therefore, this can teach us that before establishing a business in a foreign market, there is a need to understand business culture in that specific country.

References

Czinkota, M. R., & A, R. I. (2007). International marketing. United States: Thompson

Alcantara-Pilar, J. M., Barrio-García, S. ., Crespo-Almens, E., & Porcu, L. (2015). Analyzing the cultural diversity of consumers in the global marketplace.

Boeing, M. (2013). Analysis of cultural differences and their effects on marketing products in the United States of America and Germany: A cultural approach to marketing using Edward T. Hall and Geert Hofstede. Hamburg: Anchor Academic Pub.