The modern world is characterized by a growing degree of globalization and internationalization. Multinational companies have become an integral part of this world. They have branches around the whole world. There are even companies that conduct business in almost every country of the world.
These countries are characterized by different economic and political environments. Also, there are significant cultural differences between the countries. As a result, the business model of a company cannot be similar in every country, since this business model should account for the mental features of every separate market.
Such differences can be analyzed on the example of American Coffee House (direct retail sales in the target market similar to Starbucks). The target countries are Germany, France, and The Netherlands. The task is to define the cultural differences and their potential influence on this business.
First of all, the potential demand for such products and services should be considered. The size of this demand depends on the local citizens’ habits and culture of drinking coffee. Of course, France is a leader in the culture of drinking coffee among the mentioned countries. Thus, the greatest demand can be expected by the company.
On the other hand, drinking coffee for a French man is something more than just taking a meal. It is the whole process. It can be even called a cultural process. Citizens of this country like to spend time with friends and colleagues, while drinking coffee. Coffee is rather an opportunity for them to talk and to solve some problems. Respectively, it is a long-term process.
That is why the business model under consideration is not the most suitable for France. This business model is developed for people that want to drink coffee as quick as possible. Usually, they drink such coffee during the breaks at work, lessons at university etc. This business model can be called a quick coffee. That is why a conclusion can be made that this business is not appropriate for France. It is better to say that it cannot be the most profitable there. New regional business opportunities should be monitored.
Germany and Netherlands are more appropriate options. They do not have such developed culture of drinking coffee. They would happily accept an opportunity to drink a fast coffee. Also, there are some additional supportive business factors.
These countries have large cities with a lot of citizens. These business centers are ready to accept great amount of coffee. Furthermore, there is developed infrastructure for growth of the business under consideration.
Second of all, these countries may propose required demand. The average level of income is among the highest in the world. That is why the company under consideration can expect significant sales and financial results of the branches in these countries. On the other hand, these business projects are going to require significant initial investments. However, potential benefits are going to be much higher.
Finally, there are some negative factors that may affect success of the business. Probably, the most significant is high degree of competition. There is a lot of similar companies in France and Netherlands. The company under consideration will be forced to propose something really new to attract attention of the local customers.
Also, financial crisis is another significant threat. It is supported with economic slowdown. It means decline of income of customers and, respectively, demand on the different projects. Even demand on coffee can be declined. It should be accounted in the process of development of the business strategy.