Business Studies

Buyer and Consumer Topic 7 Q4

Discuss three potential problems a company can face if it decides to expand internationally. Explain why it is important to consider cross-cultural consumer behavior prior to expanding beyond the domestic market. Provide real-world examples to illustrate your ideas. In replies to peers, discuss additional problems that could be encountered and must be considered.

ANSWER

Buyer and Consumer

Expanding a business internationally has several challenges outlined as early as possible and design appropriate measures. One of the common problems includes language and cultural barriers. If one cannot speak the same language with the customers, communication will always be a challenge, which will, in turn, affect the general stability of the business. The second challenge is local competition from the intended market environment (Schreier, Udomkit & Ineichen, 2021). Competition is a big problem for a business planning to go global because of the stability already established from other marketers and business premises; for example, if Walmart decides to expand its products, it will meet competitors such as eBay. It will be upon the business to design unique products with reliable prices for the customers. The third challenge is associated with tax codes and compliance issues. Dealing with fees, taxes, and tariffs for global trade can be a significant risk for several industries, significantly smaller businesses. One should know the trading standards and regulations.

Considering Cross-Cultural Customer Behavior

Businesses must review a region’s cross-cultural consumer behavior to expose the beliefs, customs, and values that influence consumers’ views of specific goods and services. It is essential to consider the differences and similarities of foreign markets compared to the local ones. Understanding the cross-cultural customer behavior allows the business to improve their products to impress their targeted international clients (Buckley, Doh & Benischke, 2017). Still, knowing the similarities and differences between the local and international target group’s personal, cultural and economic determinants enables the company to design influential and meaningful advertisements in hopes that the new customers will be willing to spend and choose the items over the competitors. These are among the problems and advantages of looking into cross-cultural consumer behavior before going global.

References

Buckley, P. J., Doh, J. P., & Benischke, M. H. (2017). Towards a renaissance in international business research? Big questions, grand challenges, and the future of IB scholarship. Journal of International Business Studies, 48(9), 1045-1064.

Schreier, C., Udomkit, N., & Ineichen, I. (2021). Unknown Territory–How SMEs Manage Trust While Doing Business Internationally: Cases from 18 Small and Medium-Sized Swiss Enterprises. ABAC Journal, 41(3), 192-211.