Expanding globally is extremely challenging. There are a large amount of challenges that companies need to overcome. I will analyze the cultural, legal, language and product challenges.
Culture is one of the most critical aspects a business must look at when expanding globally. It can be easy to assume that since a product / idea is so popular in one region, it will be popular in another. The truth is that assumptions like that can be dangerous. One example is with a soap commercial from Procter & Gamble. This commercial showed a woman bathing and her husband entering the bathroom and smiling. The commercial did extremely well in Europe, so P&G assume that it would do just as well in Japan. Unfortunately, it did not. The Japanese considered it an invasion of privacy, inappropriate behavior and in very poor taste (Baltzan, 2017).
Navigating local and regional laws can be huge headaches for global companies if not done right. We can even see blunders from huge companies such as Google. Google has been fined billions of dollars by the EU for failing to abide by certain laws (Domonoske, 2018). One method through which companies learn more about laws is by actually sending executives into the field to learn more. One example is of Citi bank going into China to learn more about the process of Public Policy making. The speaker, Stephen Bird, says “we know in China that public policy drives progress. It’s important that we understand those policies, that we understand the impact of those policies on business and on the economy in general” (Citi Bank, 2010) . Another common strategy is just having a local branch with some local employees in charge of handling all of that.
Language is a challenging barrier that companies need to overcome when doing business globally. An example is when an American company realized that the brand name of cooking oil they were advertising translated into Spanish as “Jackass Oil”(Baltzan, 2017). One thing businesses can do is use Web 3.0 to their advantage. Web 3.0 is defining the next generation of online business opportunities (Baltzan, 2017). Web 3.0 is based around web applications powered by artificial intelligence. In the language case, natural language processing and language translation can be seamlessly implemented into business processes to gain a competitive advantage when doing businesses abroad.
The product itself might not suit the market a business is trying to expand into. Businesses need to realize this and modify their product accordingly. For example, McDonald’s features teriyaki burgers in Japan, McChickens with only thigh meat in China, McCurry pan in India (Zanoni, 2012).
All in all, there are many challenges that must be overcome for a business to successfully expand globally. Multiple angles need to be thoroughly analyzed to prevent costly blunders.
Baltzan, Paige. Information Systems. 4th ed., Mcgraw-Hill Education, 2017.
Domonoske, Camila. “EU Hits Google With $5 Billion Fine For Pushing Apps On Android Users”. Npr.Org, 2018, https://www.npr.org/2018/07/18/630030673/eu-hits-google-with-5-billion-fine-for-pushing-apps-on-android-users. Accessed 6 Oct 2018.
Zanoni, David. “Mcdonald’s: Cultural Adaptability To Bring Continued Success”. Seeking Alpha, 2018, https://seekingalpha.com/article/855441-mcdonalds-cultural-adaptability-to-bring-continued-success. Accessed 5 Oct 2018.