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Azure Sky Tea Company: Global Business Essay

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Updated: Jul 9th, 2020

Problem statement

The Azure Sky Tea Company’s performance in the US has been admirable. The current score of the nation in the Hofstede ranking places the parameters of individualism, uncertainty, power distance, and masculinity at 91, 46, 40, and 62, respectively. These scores are admirable for a business since they signify a relatively stable business environment. However, there is need to integrate the current market of the Azure Sky Tea with better or similar cultures in two external markets as part of the global marketing strategy. The growth will not only expand its market, but also spread the risks as a result of the dynamics in the tea industry. Thus, this paper proposed the German and Canada markets as the most suitable new markets that the US based Azure Sky Tea should expand into.

Possible Combination of countries: Canada and Germany

Germany has the largest economy in Europe. The current score of Germany in the Hofstede ranking places the parameters of individualism, uncertainty, power distance, and masculinity at 67, 65, 35, and 66, respectively. On the other hand, Canada has a developed economy just like Germany. The current score of Canada in the Hofstede ranking places the parameters of individualism, uncertainty, power distance, and masculinity at 80, 48, 39, and 52, respectively.

The characteristic of masculinity indicates the determinants of success and quality of life. For instance, high masculinity indicates that an economy is driven by the need for success and competition. Apparently, Germany has a high masculinity score of 66 while that of Canada is 52. This is a sign that Germany values performance more than Canada. The social status in Germany is defined by the ability to acquire expensive cars, homes, and other forms of luxury. On the hand, success is reflected in the values of quality life and addressing social welfare in Canada. The two countries have more or less the same score in power distance. The difference is only 3 scores. Therefore, the business environment in the three markets is the same.

Uncertainty avoidance defines the approach that a country may adopt to deal with unpredictable future, which is the power or lack of power to control the unexpected events in the future. Germany has a high score of 65 in uncertainty avoidance. This means that the country has insignificant inclination for uncertainty avoidance. The score also suggests that Germany prefers deductive approach to inductive approach in dealing with unpredictable future (Hofstede 1993).

On the other hand, individualism is defined by scale of interdependence among the citizens of a nation. The score for this country is 67. Generally, the high score of 65 in uncertainty avoidance and 67 in individualism indicate that the Germans rely heavily on the actions of the experts to balance the high uncertainly and relatively depend on each other. In comparison, Canada has a score of 48 in uncertainty avoidance and 80 in individualism. Despite the difference in the score, they fall in the same percentile for the two countries.

Recommendations

The proposed entry into the German and Canadian markets will target users of different tea products of the Azure Sky Tea. The company may choose Berlin and Ottawa as head offices in Germany and Canada, respectively. The company will offer customized tea products that incorporate the cultures of the two countries.

From the gathered data, it is apparent that scores of the US, Germany, Canada on Hofstede scales on the parameters of individualism, uncertainty, power distance, and masculinity fall within the same percentile, with slight variances in the individualism parameter. Therefore, the proposed German and Canadian markets will fit within the current business model the Azure Sky Tea Company used in the US.

The most imperative proportions of the Hofstede representation for the Azure Sky tea, in the new markets, would be balancing the dimension of power/distance to minimize the degree of inequality in managing the new offices and business models. The leadership approach will have to embrace the low power/distance score to make the bridge between the US office and new offices accommodative (Casimir & Waldman, 2007).

The Azure Sky Tea will effectively make an entry into the German and Canadian markets as a company operating on the pillars of affordable, quality, and tasty tea products. Reflectively, to capture the distribution channel, the beneficial interests will be distributed across the commodity pool of the target market. This strategy will facilitate the restructuring of effective sales and public awareness to develop the customized tea product knowledge in Germany and Canada (Keegan & Green, 2013).

The main potential risks inherent would be cross-cultural differences and imbalance in the required skills. It is important to implement strategies that are critical in maintaining a low score in this dimension (Hofstede, 1993). A low score dimension translates into novel ideas and creative expression among the employees, despite the variances in cultures. Besides, it is necessary to roll out skills training program to ensure that the organization has a low score in the masculinity dimension. Therefore, the elements of employee equality, job design, and collectiveness will become ideal for the Azure Sky Tea organizational development in the new markets.

References

Casimir, G., & Waldman, D. A. (2007). A cross cultural comparison of the importance of leadership traits for effective low-level and high-level leaders: Canada and Germany. International Journal of Cross Cultural Management, 7(1), 47-61.

Hofstede, G. (1993). Cultural constraints in management theories. Academy of Management Executive, 7(1), 81-94.

Keegan, J., & Green, M. (2013). Global Marketing (7th ed.). Upper Saddle River, NJ: Prince Hall/Pearson.

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IvyPanda. 2020. "Azure Sky Tea Company: Global Business." July 9, 2020. https://ivypanda.com/essays/azure-sky-tea-company-global-business/.

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IvyPanda. (2020) 'Azure Sky Tea Company: Global Business'. 9 July.

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