Compare How Cultural Differences and Foreign Business Environments Affect Multinational Corporations

M2-Comp atomic number 18 how heathen differences and foreign commerce environments affect multinational corporations In this report I will be stating the differences of how Tesco depart in s discloseherly Korea compargond to how they function in the get together Kingdom. Tesco lease to fit to the local destination, traditions and tastes and sustain to whet an environment in which shoppers will obtain at home. Tescos local changeion scheme in southernmost Korea involves selling products and services based non on the UK experience, but on Korean customer demand.Tesco in conspiracy Korea provides live octopus, pet iguanas, seek sliced up alive sushi-style, and dental services as a mode of their adaption strategy to appeal to southeastward Koreans culture. Hofstedes Un truety avoidance (UA) theory, states deals with the degree to which members of a particular society feel uncomfortable with uncertainty. The theory relates to the fact that the future fuck never be kno wn. Countries that exhibit strong UA , much(prenominal)(prenominal) as mho Korea, maintain strict codes of whim and behaviour. They are intolerant of unorthodox ideas.By adopting the admittance Tesco set out chosen, they are appropriateing for a society such as southbound Koreas to be more than(prenominal) turn in to the arrival of the company, which in turn invites a greater scope of custom. Tesco was helped in developing this approach by entering the sustenance marketplace through a control stick venture with Samsung, a powerful brand comprise in its own right and one of the jumper lead conglomerates in randomness Korea. This will help signifier the recognition for Tesco in South Korea and pulp a relationship with new customers. As per the Hofstede theory referred to earlier, Samsung represents pencil eraser and security within the South Korean market.Therefore, UA is apt(predicate) to be severely reduced when partnered with such an dedicateed brand withi n the direct community. The localised approach means a dower more warm sustenance than in the UK to recreate a market atmosphere, as well as fast food outlets, coffee shops and toddler play areas. However, the Tesco home stores in South Korea occupy been located as culture centres where m otherwises and customers contribute take classes learn new skills and fill access to the internet cafe. This is because Tesco are aware that the mass of South Korean mothers prefer to look later their children rather than work.Having this available will attract more customers and help be more suitable for South Korean customers. Overall the Tesco in South Koreas aim is to create value to build and persist in store feminism and collectivism. Tesco in South Korea in the main sell products that will appeal to South Korean customers, which will include branded products and live animals including fish and octopus. As South Koreans are recognised as not having a great deal of metre to shop payable(p) to heavy workloads, they employ a register system.This allows customers to scan products off posters on their phones, so they can get the products delivered to them by the time they are home from work. The posters mainly appear in guide stations, as this will get the most usage via people travelling to and from work. Tesco use many strategies to adapt to the culture they are working in, which will progress more customers to shop from their and beat their local competitors. However, Tesco in the UK provide many divergent products to appeal to dissimilar ethnicities and cultures including their own branded food.Tesco operates contraryly in twain South Korea and the UK as twain countries are rattling antithetic. However they have the same aim, which is to create value, to build loyalty among their customers. Tesco in South Korea has a very(prenominal) different infrastructure compared with the UK, as in South Korea they assign the scan system. This is very diffe rent to the UK because they have many Tesco supermarkets many being 24 hours where customers can go to buy their products. They do also bid online shopping, where they can place their magnitude online and get it delivered.Also in the UK they have self-scanner which has become very popular and other big branded supermarkets are now using. This is where customers scan their products and make the payment by themselves. To conclude, after conducting inquiry on how Tesco functions in both South Korea and the UK, in that respect are many more differences than similarities. Due to the different cultures, Tesco have to adapt their shop to reach the ineluctably of the customer, so their strategies are very different in each country. Tesco is a happy company and due to the changes they make to adapt to different cultures it has made them a well-known international brand.D2-Evaluate the impact of cultural differences on international business performance in the market In this report I wi ll be evaluating the impact of cultural differences on international business performance in the market. This includes evaluating the strategies Tesco use in both South Korea and the UK, which are very different. If Tesco did not adapt their strategies in different countries they wouldnt fit in with their cultures, then people will be little likely to shop there. Tesco need to provide certain foods that will appeal to the country they are in.For example, Tesco in South Korea have branded products, and a lot of meat including octopus and sushi-like fish. Tesco in the UK provide products for widely range of cultures and offer many branded foods including Tescos own. If Tesco did not adapt to different cultures they could lose out on business and potential customers might go to their local competitors. This may also give Tesco a bad reputation for their supermarket, and their recognition as a company could be negative. Going into a new market can be difficult due to the local compet itors and getting people to change where they soon shop.If Tesco did not come up with such erratic ideas in South Korea, they wouldnt get the customers they do today, and they would struggle to make enough money to nourishment a Tesco running there. However, due to such laughable ideas that local competitors do not offer, they are a very well-known international brand. In the UK Tesco have three other main supermarkets that they have to make do with Asda, Morrisons, and Sainsburys. Surrounded by such strong competitors, Tesco are always thinking of new strategies to gain more recognition and greater market share than their rivals.Tesco offer a Clubcard which is where customers can collect points from the products they purchase. These Clubcard points will allow customers to get money off future shops, and fix vouchers after saving up a certain amount. In South Korea Tesco have established their way of sustenance and learnt to adapt their strategies to appeal in South Korea. Te sco have had to assay much research, in order to find out more about South Korea. It is regarded as the second denseest working country in the world, which means that many people do not have time to go food shopping.Tesco have thought of a solution which is for customers to shop at Tesco, and get their food delivered to them. If Tesco did not offer such a unique strategy it would be hard to get people to change where they get their food from. However, this appeals to many people in South Korea, and therefore Tesco have become a very successful company. In South Korea, Tesco has defined research to establish that mothers prefer to look after their children rather than working, and so they have adapted their Tesco to culture centres, which gives the opportunity for mothers to add their children in-store, and have access to the internet cafe.They also have the opportunity to take classes and learn new skills. This strategy shows the quality of how well Tesco have learnt to adapt to different cultures, as they know most of their customers will be mothers, thus giving more appeal to the target audience. Time would suggest that the business model pick out by Tesco, has been largely successful. The first Tesco store in South Korea opened in 1999, and they have since bygone on to open a further 457, with 59 opened in 2011/12 alone. They are briefly the second largest retailer in all of South Korea, just behind the Shinsegae Group.These figures point to a passing successful campaign in Asia proving that they were right to undertake a project based on cut UA. (ref Wikipedia) Over the years, many different companies have been defeated in trying to launch their various brands in certain countries. Most of these failures have been the result of scurvy product naming, but they still give an keenness into the importance of research, and implementing strategies that conform with normal ways of life in those countries. For example, American Motors tried to market it s car, the Matador, in Puerto Rico based on an image of dominance and courage.However, in Puerto Rico the word, literally translated, means killer. The unconnected name is linked to the cars lose of popularity because of the many hazardous roads in the country, and the correlational statistics with death made by consumers. (ref www. worldpress. com) To conclude, after evaluating the strategies Tesco grow in both South Korea and the UK, it is clear that Tesco are an adaptable business that can appeal to different cultures. Without changing their strategies they wouldnt be such a successful well-known international brand.