Challenges and Risks

19 May No Comments

Challenges and Risks in Starting Quality Restaurant Business in China


Challenges and Risks in Starting Quality Restaurant Business in China

Some of the challenges facing the decision of starting the new restaurant business in China comprise of: Language barriers in the foreign nation, source of financing, teambuilding issues, dealing with the unknown as well as loneliness. In China, most of the population speak Chinese as their national language. In most cases, it may be necessary to hire Chinese workers to facilitate the communication between the waiters and the customers. These employees may result in additional expenses to the budget; as a result, the company need to create a new budget to cater to all employees. Team building with the new Chinese employees may also be a challenge; however, for effective team work, we will be forced to employ a quite number of Chinese employees. Additionally, it would be necessary to teach our own employees the Chinese language (Allen, 2010).

Dealing with the unknown customers will be another great challenge while in China. At some point, it is important to understand customer’s needs and expectations. Before launching the new business, it is imperative to perform a survey to identify and understand the customer’s needs. Lastly, one may feel lonely while in China since there are no similar firms from our nation. As a result, it take some time to adapt to the new business environment.

Cultural risks which may be encountered

In most of Chinese cultures, importing vegetables is forbidden. This situation may create some conflict between our operations and customer’s expectations. Moreover, the Chinese rely on meat as their food, but our new business will focus on replacing meat with vegetables as a way of controlling body illnesses such as obesity. We may be required to take time to educate the Chinese about the need to reduce taking huge amounts of meat and, instead, replace it with vegetables.

Business risks which we may encounter

Business competition is the first risk the group may encounter after launching the new venture in China. Already, there are stable Chinese restaurants within the nation. Competing with established firms may be a great challenge. Poor financial performance in China may also result in another risk. As such, for any business fair off well, the nation should have a well-stable economy.

Political risks

If the Chinese government and our country are not in good political relations, there is a possibility that the business may be rejected by the Chinese people. For an effective business performance, we will be expecting China to be in a good political status. If there are political conflicts, we will be unable to launch successfully. Politically stable nations create more room for investors to transact with their companies (Allen, 2010).

Plan to avoid operational, transaction, and translation exposure

In order to avoid operational exposure, the company will have to hire Chinese workers and learn their ways of performance. Such a strategy will help in facilitating the organizational operations. Moreover, our employees will benefit through sharing ideas with the Chinese employees. On the other hand, to cater to transaction issues, we will have to convert our funds to Chinese yuan. Lastly, translation exposure will be curbed through teaching our employees’ Chinese language. Furthermore, the company may be required to hire language interpreters for the first few days after launching the business (Sims, 2001).


Allen, R. (1987). The challenge. New York: Simon and Schuster.

Sims, R. (2001). The challenge of front-line management. Westport, Conn.: Quorum Books.

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