Cross Culture Analysis and Market Entry Strategies for Metersbonwe Group in Saudi Arabia

This report discusses the cross culture analysis and market entry strategies for Metersbonwe Group, a leading Chinese apparel organisation, in Saudi Arabia. It explores the cultural and social differences between the two countries and evaluates how these norms impact customer behavior towards the company's offerings. The report also discusses various market entry strategies and provides recommendations for the chosen company.

MARKETING
ACROSS CULTURES
(PROJECT-CW2)

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Cross culture analysis to denote the understanding of cultural and social differences among
chosen culturally different nations.........................................................................................1
Analyse and evaluate how cultural and social norms of targeted country impacts customer
behaviour towards offering of organisation...........................................................................4
Discuss different strategies of international market entry in context with selected business 6
Provide a recommendation to chosen company about right market entry tactics..................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Cross culture in context with business organisations is related to the efforts of an
organisation to assure that their employees must interact efficiently with people of other cultures
in an appropriate manner. Cross-culture mainly depicts the ethnic, regional and national
differences among two nations on the basis of social and cultural norms (Alghamdi and Urden,
2016). In case of global business, cross-culture has emerged as a big issue as success of an
organisation in international market is based on their relationship with various cultures and
regions. In order to perform work on this project, selected nations are China and Saudi Arabia.
These two are culturally different nations and understanding these cultures will helps the chosen
organisation in dealing with environment of new country in a proper manner.
For this assignment, selected organisation is Metersbonwe Group which is a China based
leading apparel organisation that offers casual-wear to their customers. This company came into
existence in 1995 and operates around 1850 stores within China. This organisation is
headquartered in Shanghai and employees around 5000 workers. This report will mention about
a cross culture analysis framework to acknowledge the distinction among social and cultural
differences in Saudi Arabia and China. Also, analysis of social and cultural norms of targeted
nation to identify consumer behaviour will be carried out. At last, various strategies to enter
international market will be discussed and appropriate recommendation will be given to selected
organisation.
MAIN BODY
Cross culture analysis to denote the understanding of cultural and social differences among
chosen culturally different nations
Metersbonwe Groups is a leading Chinese firm which is operating more than 1800 stores
in China. Due to wide success in China, organisation has decided to increase their business
presence in international markets. In this context, organisation has decided to expand in Saudi
Arabia which is one of most economically stable country around globe. People in Saudi Arabia
has good income due to which they are able to purchase the offerings of Metersbonwe Group
without being price sensitive (Dawkins and et. al., 2016). In order to perform cross-cultural
analysis among China and Saudi Arabia, manager in Metersbonwe Groups can use Hofstede
model. Elements of this model are stated below:
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Hofstede cultural dimension
Hofstede's cultural dimension is a framework which is given by Geert Hofstede to
analyse different kind of cultures. By using this model, divergence in cultures of various
countries can be analysed in a proper manner. According to the work which is carried out in
CW1, most suitable model to analyse analyse culture of two countries is Hofstede cultural
dimension. This model will help Metersbonwe Groups to identify the major differences in
Chinese and Saudi Arabian market so that required changes in existing strategies can be carried
out. By this, people of international market will be served efficiently. Elements of this model are
discussed below:
Masculinity Versus Femininity
It is the first dimension of cross-cultural model given by Hofstede which is concerned
with the preference of society towards aspects like achievement, sexual equality, gender biasses
etc. Countries which are feminine is more favoured toward life quality, modesty, cooperation etc.
whereas masculine societies are tilted towards material rewards, heroism, assertiveness, wealth
building etc. China is a masculine society due to which business organisations are highly
motivated to achieve high success (Del Mar Miras‐Rodríguez, Carrasco‐Gallego and Escobar‐
Pérez, 2015). Hence, companies in China position their high quality products according to
competitive pressure. In case of Metersbonwe Groups, products of firm are priced at less rates so
that maximum people can purchase it and high sales can be gained. Whereas, in Saudi Arabia,
society is balanced. Society considers both competition and quality of life together. For instance,
due to low price of products, people in Saudi Arabia can consider products of company as of low
quality. By this, positioning of Metersbonwe in Saudi Arabia will be disrupted.
Individualism Versus Collectivism:
Individualism defines that a person needs to work hard to achieve their personal goals
rather than considering well- being of other individuals. Collectivism denotes that other than
attainment of goals, well being of entire group is important. Hence, an individual is needed to
achieve their goals while maintaining competence with entire business firm. Chinese society give
more consideration to individualism as they believe that they have capability to decide best for
them. This can be evident for the example of Metersbonwe Group which provide both traditional
and modern wear in China. People in china prefers both kind of clothing as according to their
individual being. In case of Saudi Arabia, society is collectivist as they have give more
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preference to the opinion of groups rather than an individual. This can be comprehended from
the fact that most of the females in Saudi Arabia are not allowed to wear western outfits. Even, a
female wants to wear modern clothes, she is not permitted. This situation can acts as a hindrance
for Metersbonwe Groups in achieving high sales in Saudi Arabian market (Dubis and
Bernadowski, 2015).
Uncertainty Avoidance:
This dimension focuses in the degree up to which uncertainty and ambiguity are tolerated
at a place. This aspects is highly related with the extent to which population of a region feels
inconvenient about aspects like uncertainty and ambiguity. In case of uncertainty avoidance,
China posses a high index. Organisation which are operating in china prefers to take preventive
measure beforehand so that any kind of uncertainty do not impacts their business in negative
manner. Hence, Chinese organisations mainly focuses on environmental investigation and
examination so that uncertainties can be reduced considerably whereas, in case of Saudi Arabia,
society is in favour of following rigid beliefs and codes so that their culture and social norms can
be preserved without any compromise. Also, people in Saudi Arabia are not very tolerant for
new ideas and concepts (Fowler, 2012). This cultural difference can impacts the working of
Metersbonwe Group in negative manner. In China, company gains attention of customer via
innovation and technology advancements but in case of Saudi Arabia, people restricts this kind
of concepts. Also, people in Saudi Arabia are not going to change their perception about modern
cloths which will became a big uncertainty for Metersbonwe Groups.
Thus, in accordance with this analysis, this can be comprehended that social and cultural
beliefs of people in Saudi Arabia are very different from the living perception of China. In
comparison with western countries like USA and UK, China is traditional but it knows the
importance of change, due to which Chinese society is also emerging as a modern society which
favours innovation and technological advancement. But, in case of Saudi Arabia, condition is
very different. Women are given less freedom to express themselves and chose their preference.
They have to follow the orders to groups which are leaded by male community. This Hofstede
analysis helps in acknowledging the cultural difference between both countries i.e. China and
Saudi Arabia. If Chinese company named “ Metersbonwe Groups” want to expand their business
in Saudi Arabia, company is required to fill the gap between cultural aspects which are discussed
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above. Only then, concerned company can perform well in international market in a profitable
manner.
Analyse and evaluate how cultural and social norms of targeted country impacts customer
behaviour towards offering of organisation
Metersbonwe Group is a company which is dealing in apparels and they are highly
influenced by various factors which are prevailing in Saudi Arabia. This is a brand which is
having casual clothing and apparels as their core products and it was strategy with a
differentiation strategy as they opened a museum which offered ancient & ethnic accessories
and costumes to their customers. The Saudi Arabia is a country which has a mix of traditional
and modern elements and this plays a very crucial part while a consumer is making a decision
with regards to the type of clothes a person will prefer. This company was stared from china and
culture of Saudi Arabia is totally different. In China people posses more purchasing power this
can help them in keeping prices of their products a little high (Machado And et. al., 2014).
In Saudi Arabia there is a very wide gap between rich and poor this leads to a situation
for this company that they cannot keep very high prices for their products (Rabia and Hazza,
2017). This can be understood from the present scenario that another difference which can have a
impact on way goods can be purchased by people of Saudi Arabia is behaviour of individuals
with reference to socio-cultural factors present in the external environment of a country. The
culture of Saudi Arabia is influenced by Islamic and Arab culture. The society is into religious,
traditional and is very family oriented which is totally different from chines culture where there
is less of family culture and more of open of culture which leads to a situation of more of
western clothing being preferred. Hence, this become essential for Metersbonwe Group that they
have to make their products according to the prevailing scenario and culture of their target
market (Rabia and Karkouti, 2017). There are lot of changes which have to be adopted by this
brand which can help them in acquiring and attracting more customers in new country that is
Saudi Arabia. China is one of fastest growing economics today and they are having a largest
economy and is a more developed country in comparison with Saudi Arabia This create a
situation that people in china posses more purchasing power a s their disposable income is also
high and in Saudi Arabia they has less purchasing power as GDP growth is also low in this
country.
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This leads to changes in the pricing policy if this brand which has to be modified by
them according to prices of already established clothing brands in Saudi Arabia. Apart from that
there are many social norms also which posses a impact on strategies being adopted by this
company (Alghamdi and Urden, , 2016). There are all the festivals which are related with Islam
culture which leads to a need of creation and designing of clothes according to those festivals
and special occasions only. There is a culture which consists of Islam and all their political
personal and economic lives are influenced by this culture only (Dubis. and Bernadowski,
2015). It can be understood that both the countries china and Saudi Arabia are completely
different from each other and there are lot of changes which have to be make by Metersbonwe
Group so that they can ensure their survival fir a long term in this country (McCreanor and et.
al., 2013).
Marketing mix is based on set of actions and tactics that are utilised by a company to
increase the visibility of their offering. It is a marketing tool which will help Metersbonwe Group
in formulating new strategies and tactics so that customer behaviour of Saudi Arabian people can
be favoured positively for company. In this context, concerned company is needed to change
their marketing mix tactics according to the environment of Saudi Arabia so that
internationalisation of business can be carried out efficiently. Marketing mix for Metersbonwe
Groups in relation to people of Saudi Arabia is discussed below:
Product: Metersbonwe Group is going to target Saudi Arabia population by introducing
Western Wear dresses for both males and females. Earlier, women in Saudi Arabia were
restricted to wear modern clothes but now due to changing time this restriction has been lifted.
This is the reason Metersbonwe Group has decided to target Saudi Arabian market by offering
Western Wear dresses.
Price: Company has decided to use Premium pricing strategy for their product. Main
reason for this is that rich class in Saudi Arabia is majorly influenced by globalisation. Due to
this, majorly high class allow their females to live a modern life style. Premium pricing will help
Metersbonwe Group to earn high profits (Rabia and Hazza, 2017).
Place: Company is operating their business via both online and offline outlets. In Saudi
Arabia also, organisation will provide their products through stores and digital media. If products
of company will be easily available to the people, they will be satisfied to use them. By this,
maximum people will be able to purchase their products and high revenues will be earned.
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Promotion: To promote their Western Wear, company can take the help of traditional
and digital media like TV, radio, social media platforms like Instagram, Facebook etc. By this,
millions of people will acknowledge about the offerings of company in fraction of minutes due
to which high profits can be earned.
Discuss different strategies of international market entry in context with selected business
Market entry strategies is basically a planned way to distribute a service or product to the
targeted market so that high sales and market shares can be earned. If an company wishes to
increase their business presence in international market, there are different methods which will
help them in doing it. Tactics which allow a company to enter a new market is known as market
entry modes. With the help of right market entering strategy, a company can operate in a new
market with minimised risks (Rabia and Karkouti, 2017). As Metersbonwe Group is also
planning to enter Saudi Arabia market, manager of firm is needed to adopt right entry mode so
that expected outcomes can be attained appropriately. In context with Metersbonwe Group,
different strategies of market entering are discussed below:
Joint venture: This kind of market entering strategy is used by an organisation to enter
an international market by sharing an ownership and joining hands with another company. This
entry mode is favourable in those situations where both the firms have common business
objectives. Joint venture will help Metersbonwe Group in entering new market, sharing rewards
and risks as per share, sharing of technology, joint development of product etc.
 Advantage: This strategy leads towards optimal utilisation of resources and sharing of
risks. Also, in this strategy ventured organisations are able to learn new skills and
competences from one another.
 Disadvantages: Asymmetric investments can leads to conflicts among partnered
organisations. Also, political and cultural differences can acts as a barrier in successful
business operations.
Franchising: In this market entering system, business owner which are semi-independent
in nature offers a royalty and fess to the parent organisation to get identification of their
trademark. Semi-independent business owner is called as Franchisee and parent firm became
Franchiser. By offering a fixed fees, franchisee will be able to sold the offerings of Metersbonwe
Group in a legal manner.
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 Advantage: This entering mode is the least risky way to enter a new market as franchisee
is already operating in new market. Hence, offerings of franchiser will enjoy a previously
established customer base without any extra efforts.
 Disadvantage: Wrong franchisee can ruin the good will and name of parent company
due to which business loss will be faced.
Licensing: In this type of method, an organisation grants permission to an individual to
utilise their legally protected offerings and technology so that their business can be expanded in a
new region. This market entry method is valid for an agreed time period and within specific
territory. After agreed time is over, there is not business links between Licensee and licenser. In
this method, less interaction and involvement is needed (Rohm and et. al., 2012).
 Advantage: In this market entry method, less investment is needed and low labour cost is
used.
 Disadvantage: This method to enter a new market is very time consuming and any
decline in product quality can impacts the reputation of the licensor in a negative manner.
Provide a recommendation to chosen company about right market entry tactics
Selection of right market entry mode will help Metersbonwe Group to execute and
perform their business operations in a successful manner. Out of all the methods to enter a new
market, manager in Metersbonwe is recommended to chose Franchising. It is the most feasible
and suitable strategy for the concerned company to internationalise their business in Saudi
Arabia. Under this strategy, business owner of Metersbonwe Group will give all the rights to the
franchisee in Saudi Arabia for using their products and brand name for a specific time period.
Due to this pact, Franchisee will have to give specific amount of revenues to the owner of
Metersbonwe Groups. In this way, company can operate in Saudi Arabia without actually
coming there (Wanick, Ranchhod and Wills, 2015). As franchisee organisations will be already
operating in Saudi Arabia, they will have a loyal customer base. This will helps the Metersbonwe
Group in facing minimum risks of business failure while internationalising in new country.
Hence, franchising is the best method for Metersbonwe Group to operate in Saudi Arabia.
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CONCLUSION
According to the discussed project, this can be comprehended that expanding a business
in international market is the best way to enhance customer base and sales in an exponential
manner. By this, profitability of a firm can be increased in a considerable way. In order to
achieve high results, it is essential for a company to analyse cultural and social values of nation
in which they are planning to operate. In this context, Hofstede culture framework will helps an
organisation is analysing cross-cultural in detailed manner. With the help of marketing mix,
appropriate strategies for a company can be acknowledged so that high revenues can be
achieved. Out of all the available methods to enter a new market, franchising is the best
alternatively as it contains minimal risk of business failure in a new region.
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REFERENCES
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ongoing communication. British Journal of Special Education, 42(2), pp.166-182.
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