A foreign food company is planning to make investment in Indian economy. As an international business consultant, advise the company to analyse the cultural environment of the country for the investment.

CS Professional · International Business – Laws and Practices · PYQS · December 2017
A foreign food company is planning to make investment in Indian economy. As an international business consultant, advise the company to analyse the cultural environment of the country for the investment.

Answer & Explanation:

An international marketer, operating in international business environment, needs to understand the importance of society in which he lives in and operate business. The main factors of appraisal consist of the sum of a society's beliefs, customs, values, languages, rites and rituals, behaviour and business etiquettes & practices. National culture is described as the body of general beliefs and values that are shared by a nation. Beliefs and values are generally seen as formed by factors such as history, language, religion, geographic location, government, and education; thus firms begin a cultural analysis by seeking to understand these factors. Firms want to understand what beliefs and values they may find in countries where they do business, and a number of models of cultural values have been proposed by scholars. The most well-known is that developed by Hofstede in 1980. This model proposes four dimensions of cultural values including individualism, uncertainty avoidance, power distance and masculinity. Individualism is the degree to which a nation values and encourages individual action and decision making. Uncertainty avoidance is the degree to which a nation is willing to accept and deal with uncertainty. Power distance is the degree to which a national accepts and sanctions differences in power. Masculinity is the degree to which a nation accepts traditional male values or traditional female values. While analyzing social and cultural factors, the organisation may consider the following aspects: Approaches of the society towards business in general and in specific areas; Influence of social, cultural and religious factors on acceptability of the product; Life style of people and the products useful for them; Level of acceptance of, or resistance to change; Values attached to a particular product i.e. possessive value or functional value in the product; Demand of specific products for specific occasions; Propensity to consume and to save. Mistakes in cross cultural communication often go unnoticed by the communicators, but these mistakes have potential to cause damage to any company like this food company planning to invest in India. One cannot become expert on understanding entire world's cultures however it is possible to construct a cross-cultural framework involving important cultural variables which can help marketer understand the broad characteristics of a market. Foreign Food Company can never underestimate the importance of variables such as cultural life of people, rites, rituals, festivals, heritage invasion of alien culture and business culture of a market. 'Cultural Themes' are integral part of any culture and have a substantial impact on ways of doing business in a country, for example, Indian cultural themes are rooted in folk belief and core Hindu values which include practicing joint family system, thrift, mutual cohesiveness, endurance, and trustworthiness. These values are deeply engrained in the Indian consumer's psyche. Food Company should launch a product which should be in sync with these values and beliefs.

Topics: International Business Environment

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