International Management: Strategies for Cultural Difference Management in Amazon

Running head: INTERNATIONAL MANAGEMENT
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International Management
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
1.0 Introduction................................................................................................................................3
2.0 Current Performance of Amazon and Success in Internationalization......................................3
3.0 Identification and Strategies of Cultural Difference Management............................................8
3.1 Identification of Cultural Difference.....................................................................................8
3.1.1 Hofstede's Fifth Dimension and Value Dimension........................................................8
3.1.2 Trompenaars Seven Dimensions....................................................................................9
3.1.3 4 Stage of Culture Shock..............................................................................................11
3.2 Strategies for Cultural Management....................................................................................12
3.2.1 Complete Knowledge of Foreign Culture.....................................................................12
3.2.2 Open Communication...................................................................................................13
3.2.3 Respecting Cultural Difference....................................................................................14
3.2.4 Cultural Training..........................................................................................................14
4.0 Strategies for Corporate Social Responsibility........................................................................15
4.1 Helping in Community Development..................................................................................15
4.2 Empowerment to Employees...............................................................................................15
4.3 Investing in Country’s Economy.........................................................................................16
4.4 Fostering Environmental Sustainability..............................................................................16
5.0 Strategies for Entry Mode Choices..........................................................................................17
5.1 Acquisition...........................................................................................................................17

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5.2 Partnership...........................................................................................................................17
5.3 Greenfield Investment.........................................................................................................18
6.0 Balance Tension between Globalization and Localization......................................................18
7.0 Recommendation for Sustainable Development.....................................................................19
7.1 Harnessing the Power of Cultural Diversity........................................................................19
7.2 Community Engagement.....................................................................................................20
7.3 Joint Venture Relationship..................................................................................................20
7.4 Proper Localization..............................................................................................................21
8.0 Conclusion...............................................................................................................................21
Reference List................................................................................................................................23

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1.0 Introduction
International management involves proper knowledge of international economies, leading
changes in International Corporation for creating global business strategies (Beugelsdijk et al.
2015). The study is concerned with discussing the international business management of
Amazon. Moreover, focus of the study is majorly given on United Kingdom. The study will
discuss the current international performance of Amazon for demonstrating the success of
internationalization. Apart from that, the study will majorly focus of the strategies adopted by
Amazon towards managing the cultural differences in international market.
2.0 Current Performance of Amazon and Success in Internationalization
Amazon’s international expansion has demonstrated a rapid growth in the last several
years. For the last few years, the organization has moved to more 13 countries for increasing its
international revenues. Amazon has so far kept its focus on large countries having developed
economic condition. With high level of international expansion, the tech giant has become the
largest internet retailer in the world in terms of its revenue and market capitalization.
Furthermore, the organization has been considered as the largest provider of cloud infrastructure
services. The organization has separate retail websites for United State, United Kingdom,
Ireland, Canada, Spain, Australia, Japan, India, China, Netherlands and Mexico (Ritala, Golnam
and Wegmann 2014). Amazon has recently released its 1st quarter revenue growth of 2017. This
quarter has demonstrated a stronger revenue growth. Moreover, net sales of the organization
have been raised by 23% year-over-year. In the 2nd quarter, the sales volume of organization is
expected to grow by 24%, which is between $35 billion and $37 billion (Clancy 2017).

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Figure 1: Revenue Growth of Amazon
(Source: Ritala, Golnam and Wegmann 2014)
In the year 2014, more than 37% sales revenue of Amazon has been generated from it
international business (Jeffrey Dastin 2017). In this year, the North American sales of the
organization have been increased by 25%, whereas the international sales have also been
increased by 12%. The operating loss of Amazon’s international business has been expanded
from $699 million to $1.283 billion between the years 2015 to 2016. However, the net sales for
international segment have been grown from $35.418 billion to $43.983 billion for the same
period (Jeffrey Dastin 2017).

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Figure 2: International Revenue Growth of Amazon
(Source: Panagiotelis, Smith and Danaher 2014)
Amazon has gained almost 43% market share in US market (Intelligence 2017).
Furthermore, international market share of Amazon has also been increased by 4.6% in the
recent year. Moreover, the organization has gained 13.29% market share in overall international
market (BBC News 2015). While considering the international market in United Kingdom, it can
be seen that Amazon has posted a strong market performance. The overall takings of Amazon in
UK market have been raised by more than 14%.The UK based Amazon has recorded a profit of
£34.4 million (BBC News 2015). In this way, internationalization of Amazon in United
Kingdom has reached great success.