Do you think cultural difference is important in a globalized world?
Have you ever faced any cultural shocks in communication with people from different culture?
There might be a gesture means YES in one country but considered as NO in another;
There might be an icon considered as positive totem in one culture but is totally taboo in another.
It is important that we know some cultural differences in daily life, not even mention international business.
Here are few examples of brands and businesses which failed because of culture.
Walmart has made its entrance into a numerous of foreign markets but has been unable to replicate its original success in some places, the absence of fine tuning the shopping experience depending on the local culture in that place by Walmart was the root cause of the problem
For example, in South Korea, the company did not understand the local preferences for buying small packages at local stores, and the preferences among shoppers changed, according to The New York Times. Similar problems resulted in Walmart shutting down its operations in Germany, where groceries were sold for lower prices at local stores.
Walmart bought a share in the Seiyu Company, Japan and attempted to implement its successful strategies in Seiyu stores, such as the “Every Day Low Prices” campaign. However, it was pointed out by BusinessWeek that this does not have the same pitch in Japan as it does in the United States because customers associate low prices with cheap quality, making them wary about shopping there.
The latest Coca Cola ad campaign “Share a coke” is all about sharing your favourite drink with your loved ones with a new twist where you can add yours and your loved ones names on the cans and bottles. It turned out that the brilliant social campaign was criticized in Israel. In launching the campaign Coca Cola identified and printed the top 150 most popular first names. The goal is to attract new customers. However in Israel it was just the opposite.
It becomes very tricky to conceptualize the concept of individualizing the coke bottles especially in a country where cultural identity is bound by religion and ethnicity. The problem surfaced when one Arab-Israeli citizen accused coke for not printing any Arabic name among the popular Israeli names. According to the citizens creating a campaign by adding the first names is like challenging the already existing socio-cultural dilemma.
Coca Cola reacted to this by telling the customers that they can get their names printed at designated stores.
Tesco the largest UK retailer exited the Japanese market in 2012 due to intense competition and rapidly changing customer preferences. Tesco entered Japan in 2003 and invested approximately 100 billion pound. It opened small stores, convenience stores and supermarkets. The fact that the company’s format did not suit the taste of the Japanese consumers can be pointed out that they seek convenience and the market is dominated this way. Commuters preferred the local convenience store over Tesco’s stores. Tesco sold 50% of Tesco japan to Aeon Co. which is the largest retail group in Japan. One of the prime reasons for Tesco’s failure in the international market is because it failed to understand the retail industry elsewhere in the world.
The online auctioning giant San Jose decided to enter the China market in 2004 and bought a local company in china. They changed to the eBay platform, and planned to sweep China in short time frame. After all, they had dominated other countries’ markets. Why not China's?
Two years later, eBay shut down their portal, and the Chinese auction space too was abandoned. Taobao, a local competitor take over 95 percent of the china’s market share.
There was no mechanism for eBay to simulate guanxi. According to a study conducted by researchers in the United States and Hong Kong, this was a crucial error. While Taobao allowed sellers and buyers to chat over IM, eBay did not. This gave them a chance to establish a personal contact.
In China, business is not just business. It’s social. And they quickly learn the power of social connections or "guanxi," when you spend some time in China,. Guanxi drives business deals and government contracts. It’s the invisible glue that ties people together. This may seem like a trivial detail for a powerful corporation. It’s not. It’s a mutual obligation and connection that Chinese respect in personal relationships.