Globalization and internationalization is of great importance for economies and it’s even more rewarding when business organisations take advantage of the profitable business opportunities and expand their operations overseas.
However, running or managing a business operation abroad can be challenging. Unlike with doing business at home, companies interested in doing business abroad must look at the broader picture of doing business from an international perspective and have to bear in mind that expanding into foreign markets means that, a lot of things will be run differently. In other words, it is important to realise that there are many different aspects to consider before deciding to do business abroad. (Are you ready to expand your business overseas? Here is an article by Entreprenuer.com that might help to get you started)
This blog post focuses on the importance of culture and how it can impact how businesses are run in foreign markets. I personally felt the need to write about cultural influences and how that affects normal business activities because this is an area experts have observed that should be addressed to. Many have seen even how large corporations making mistakes and end up colliding with the locals and sometimes withdraw from the markets because cultural conflicts and the unexpected consumers’ reactions. The good news is that, some companies are swift to reconcile such mistakes and successfuly continue their business overseas. Others fail and a few years later they have closed their business abroad and withdraw their operations abroad and we all we all wonder what happened?( Although there are many other examples, a common example which i see being discussed here is Walmart in Germany. Source: Huffington Post)- More about the case study Walmart’s fail in Germany has been analysed here: Source Kwintessential and also discussed inthe Newyork Times.
The need for this blog post was inspired by recent happenings on social media after H&M opened their new store in South Africa– Although people were excited about the news, something later on happened on social media platforms and to be honest the talk was not as exciting as it initialyl was. To cut the story short, a well known Fashionista in South Africa, Tlalane Letlhaku made an observation about H&M models and tweeted as follows:
And company’s response via Twitter was as follows:
Well, even though H&M tweeted an apology, honestly, some customers were still busy responding with anger and nursing their bitterness, that they barely noticed there was an apology sent via the social media, Twitter.
H&M’s response was not taken so well. You see, a few words were enough to cause tension among shoppers or potential customers. Why? If you look closely, the major issue here is the cultural and communication aspect. We don’t all perceive messages the same way. Sometimes, you need to put your message in a local language and ensure the meaning of your messages translates correctly, so that it doesn’t sound offensive or arrogant. For the Swedish Fashion retailer, that maybe was not a good start but i am sure they’ll know how to handle their local customers and rebuild trust with them. The company is known for successfully penetrating foreign markets and still manages to stay true to it’s overall brand.