Managing Opportunities and Risks in High vs Low Context Cultural Environment

INTERNATIONAL
BUSINESS

Contents
INTRODUCTION................................................................................................................................3
Literature Review-& Critical Analysis..........................................................................................3
How the potential opportunities and risks of doing business in a high context vs low
context cultural environment can be effectively managed.........................................................3
3. Objectives and Strategies.........................................................................................................7
4. Implementation (Marketing Mix).............................................................................................11
5. Control and Evaluation............................................................................................................12
Conclusions & Recommendations.............................................................................................12
REFERENCES..................................................................................................................................14

INTRODUCTION
International business includes several activities that take place to promote
several business practices as resources management, transfer of goods and
services, management of technology and ideas across national boundaries. In this
process, cross culture management take place in order to promote universalism all
around the world. Some of the organisations also provide their contribution in these
kind of activities by promoting employees who belongs to diverse culture. These kind
of business activities assist in managing equality and diversity at workplace. Cross
culture management practices can be beneficial for those organisations who wants
to expand their business globally. This report is based on The Coffee Bean & Tea
Leaf which is an American coffee chain which was founded in the year of 1963. This
organisation has around 1000 self-owned as well as franchised stores in USA and
approx. 31 other countries. In order to analyse area of market expansion, firm needs
to implement cross culture management practices through which they can analyse
potential opportunities. This report is going to determine hoe an organisation can
grab potential opportunities and risk by doing business in high and low context
business environment. Furthermore, it also determine how organisation can achieve
cultural proficiency by implementing different business strategies.
Literature Review-& Critical Analysis
How the potential opportunities and risks of doing business in a high context vs low
context cultural environment can be effectively managed
There are many risks that a business faces during the course of operations
that can be analysed through PESTEL analysis. It can be defined as a framework
which is used to analyse the impact of various macro environmental factors on an
organization. PESTEL stands for Political, Economic, Social, Technological,
Environmental and Legal Factors. It also helps in examining various changes that
place in these various factors.The Coffee Bean & Tea Leaf is a coffee chain that is
headquartered in California, United States and offers a variety of tea and coffee
beverages/drinks to the customers. The PESTEL analysis of The Coffee Bean & Tea
Leaf, which is an American coffee chain, is described below-
Political Factors – These are the factors that determine the extent to which
the government of a nation can impact an organization. These factors can include

the political stability and instability of a country, trade policy, fiscal policy etc. The
Coffee Bean & Tea Leaf, the company is one of the oldest coffee chains and the
political condition of America is also stable. The company’s operations re carried out
smoothly and it is not required to change its policies according to changes in the
political condition.
Economic Factors – These are the factors that can impact the overall
economy of a country. This further leads to an impact on the organization as well as
its overall profitability. Different economic factors are inflation rate, employment or
unemployment, exchange rates etc. The company has decided to expand its
operations in a developing nation where the people will be able to afford its products
and services. On the other hand, for example if the company would have decided to
expand its business in UK, people would not have been able to afford the same
because of Brexit.
Social Factors – These are the factors that focus on the socio-cultural
environment of a country and include demographics, education levels, levels of
disposable incomes of people, cultural trends etc. The Coffee Bean & Tea Leaf
knows the preferences and potential changes in them through the market research
that is conducted from time to time. This helps in getting a better insight about their
expectations as well and this is how the company can provide better experiences to
customers.
Technological Factors – These factors analyse the rate at which technology
and innovation are advancing and what is the level of impact they can cause on a
particular business. Factors included in this are automation, research and
development etc. Although, The Coffee Bean & Tea Leaf has incorporated decent
technology in its system, it still needs to level up the same. This will help it in making
the various business operations effective as well as efficient.
Environmental Factors – Environmental factors can also impact a business
and its operations significantly. The different environmental factors are climate,
sustainability, carbon emissions, waste disposal etc. Also, customers are
increasingly becoming aware and concerned about the environment which has led to
companies practicing Corporate Social Responsibility or CSR. The Coffee Bean &