Cultural Challenges of International Business Essay

1753 Words 8 Pages
Steve Kafka, a franchise owner for Chicago Style Pizza, is contemplating the options of opening a new franchise into the country of the Czech Republic, the country of his family's origin. Though Steve has made several trips into the Czech Republic, speaks the language and knows many people, he must seriously consider all of the opportunities and potential barriers to this new venture. I will explore the cultural differences between the United States and the Czech Republic. Next, potential competitive advantages are examined along with Hofsteade's Primary Cultural Dimensions to reveal clues to the culture pertaining to the new business. Finally, trade barriers and price income and elasticities are discussed.
Culture Differences
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As well, there are some differences in dining etiquette. All foods are eaten with knifes and forks as opposed to eating food with the hands, such as the traditional American way of eating pizza. However, this practice is starting to be contested, as snack foods such as pizza and hot dogs are becoming more common. Along with this, it would be advantageous to ensure that the business is well stocked in local beers since it is considered the beverage of choice among natives (Country review: Czech Republic, 2008). Also a salad bar would help bring in a diverse crowd increasing traffic flow in the restaurant.
Potential Competitive Advantages
There are several competitive advantages in the Czech Republic that make it a good location for starting a new franchise. The general labor costs are low and technical skills are considered high compared to the rest of Western Europe. This could be used to the advantage of the business to foster stronger growth. Contrasting viewpoints, however, highlight that the challenges of the Czech labor market is labor mobility. Workers are not willing to move around the country looking for work. If an area of a large city, such as Prague, has low unemployment levels, then workers may be hard to find (Kay, 2008). Another potential advantage is the trend toward the
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