There are variations that are experienced in the business processes and practices across cultures and as Hofstede (1980) investigated this variance across different cultures by proposing four cultural dimensions that are largely independent of each other; individualism vs. collectiveness, power distance, uncertainty avoidance and masculinity vs. femininity. Individualism vs. collectivism is measured by individualism index which is measured from (0-100) high collectivism to high individualism).Power distance is measured by power distance index and the same way of measuring applies to all other dimensions.
To be able to fully understand how Azure Sky Tea (AST) sales in the USA it will be important to fully understand the culture of the market both domestically and abroad where the AST products might be sold. AST specializes in caffeine free and herbal tea blends and its market share is becoming increasingly small. To keep AST afloat and profitable it will be important to understand by doing an extensive research to determine locations that are responsive and conducive to the culture of AST and have a good distribution channels. The company must think beyond the USA market because the completion is becoming stiffer from other companies and the market more fragmented and AST’s share of it dwindling. To expand abroad could be the only way to salvage the company from going under.
To begin with the USA domestic market by analyzing the five dimensions of Geert Hofstede. Individualism ranks very high at (1), masculinity is fairly low at (15), power distance is lower at (38) while uncertainty avoidance is even lower at (43) according to (Keegan &Green, 2013). There is great emphasis in the American society on an individual (me syndrome) and great focus on achieving personal goals and ambitions and the that explains why the individualism index is extremely high but being an egalitarian society the masculinity index is pretty low. Women can do anything that men and can do and hence overt masculinity isn’t evident and perhaps that also explains why power distance is low. People are equal and have equal right to make decisions regardless of gender. And in the same light uncertainty avoidance isn’t an issue either. Therefore, it is important for AST to put in mind this considerations about possible values and attitudes that could be similar to those of the USA while considering global expansion.
Japan and Italy are the two locations that AST could potentially expand to and this is how they compare to the United States. Italy is at (4-5) on masculinity, power distance is at (34), individualism ranks at (7) and lastly uncertainty avoidance is at (23). While Japan ranks at (33) in power distance, (1) as it relates to masculinity. Individualism is at 22-23 and finally uncertainty avoidance is at (7) (Keegan &Green, 2013).
Italy ranks pretty highly in power distance and masculinity compared to USA and that means that there are different expectations and differences as it relates to power, people don’t necessarily believe that power is equal and anyone can make decisions. At the same they also tend to view men as more assertive than women. At the same time the Italians are known to be less individualistic and high on collective actions compared to Americans. The family plays a key and central role even in the business, far greatly compared to how it is in America but the sharpest difference is as it relates to uncertainty avoidance. Italians are known to be more afraid of the unknown perhaps due to a painful and war past that is still a scar to many.
On the other hand there is marked difference between Japan and America for instance in matters to do with masculinity; In Japan women and men have different roles while men are expected to be more assertive and driven women are supposed to be taking care of the home but all are expected to make decision there are not clear difference as far as power distance is concerned. Japanese are also more collective (communal) in nature and they view each other as ‘we’ and not ‘I but where the sharpest difference is in matters of uncertainty avoidance the Japanese tend to tend risk pretty seriously, putting measures in place to avoid it and this is because of the many natural disaster that Japan has suffered over the years.
According to Hofstede’s models and how they apply in Japan it will be important for ATS to consider partnering with established businesses a way of reducing risk and uncertainty while having a good and concise plan will also help in the running of the business. Due to great attitudes of masculinity that are held by many in japan it will also be important to have men be in the lead in matters related. The final recommendation will that in Italy ATS should think of involving or partnering with established family businesses due to their strong emphasis of the family and that should be how the business will be driven.
The prospects of this expansion working out in both countries are high according to Euro monitor International (2014) because the consumption of tea in Italy on the rise while financial institutions in Japan look very stable despite of the devastation that visited upon the nation by natural disasters. And this should a cause of encouragement for Azure Sky Tea to reach out and aim at conquering this new markets to expand the streams of income and limit the impact of stiff competition and reduced sales domestically.
According to Keegan and Green (2013) the greatest risk associated with business expansion of any kind are almost always of a political nature and the best way to mitigate against this challenges is to staying the loop about such challenges and putting measures in place to counter that.
Hofstede, G. (1980), “Motivation, Leadership and Organization: do American Theories Apply
Abroad?” Organizational Dynamics, Summer, pp. 42-46
Keegan,W.J.& Green,M.C.(2013).Global Marketing (7th ed.) Upper Saddle River, NJ: Prentice
Euromonitor International (2014) retrieved from: www.euromonitor.com
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