Managing Cross-Cultural Differences in International Business: A Case Study of Tesco's Entry into Pakistan

International business

EXECUTIVE SUMMARY
The entire report is based upon Tesco who wants to enter into new foreign country i.e.
Pakistan. Also, for that the company needs to identify the culture of a company so that effective
results can be generated. Along with this, there are many key elements needs to be determined
where Tesco should understand the internal and external environment so that effective outcome
can be generated. Further, by analysing culture of different country will help to examine the
overall performance of a company in order to generate better outcomes. Also, there are many
opportunities and risk identified within a country which is related to managing cross-cultural
differences and this in turn help to meet the defined aim of a company. Further, it can be stated
that due to expansion in foreign country, company should understand about the foreign entry
mode and that is why, Tesco opt joint venture in which it will tie up with small firm in order to
understand the country’s background and culture.

INTRODUCTION
International business (IB) refers to trade of goods, services and technology from one
country to another. The present study also shed a light upon different ways through which
international business can be managed and effectively used by the company. Further, with the
help of IB, company sustain an effective brand at global level and also improve the business
performance. Through IB, company take an advantage of specialized expertise and uses range of
factors that assists to deliver the goods and services into international marketplace. The chosen
firm for this report is Tesco which is one of the op international firm who is operated at global
level by offering range of products to their customers and sustain the brand image as well.
The report will critically evaluate how potential opportunities and risk of doing business
in a cross-cultural environment can be effectively managed. Further, it will evaluate the
management responses that need to be taken by the chosen company to improve the overall
performance. Moreover, it will justify the recommendation in order to attain cross-cultural
proficiency that is essential to attain success.
LITERATURE REVIEW
Importance of cross-cultural analysis to enter into new market
According to Shenkar and et.al (2020) if a business wants to enter into new market, there
is a need to have a proper study on cross-cultural because it assists to expand knowledge beyond
the confinement and also assists to meet the requirement of a company. This in turn also assist a
business to determine the cultural beliefs and values for the country so that effective action can
be taken. As per the view of Hofestde, who assist business to identify the culture of country, so
that further steps can be taken accordingly. Also, in order to enter into new country, company
should train their employees that assists to handle the conflicts across culture and this in turn
contribute to improve the performance of a company (Shenkar, 2021). Therefore, with effective
knowledge of cross-culture company ascertain the differences and similarities which in turn
cause positive impact over the business and determine importance of entering into new market.

Elements of the international environment which have an impact on the activities of international
firms.
There are factors several should be consider in order to expand the business in the new
territory. The culture difference is major factor that should be considers in order to know about
the desire and want of local market because there are different perception of people in order to
think about the value and desire of local people. In Pakistan people are very possessive about
their and culture so that they consider the product accordingly. That is why it is not possible that
the product will going to run in the market at high demand. The legal and regulatory issues are
also play important role in business because there are different rules and regulation that are
followed by company (Goldstone, 2018). The range of the product will decided according to
consider all this factor There are local laws and regulation guidelines can be achievable in order
to reviewing some aspects. When the business expanded overseas there are so hazards are faced
by company because it can be barrier for the company as well as change in tax rate are affect the
business. So to overcome this issue it is necessary to collect the relevant information from legal
counsel so it can be help the business for further expanding.
Moreover, another factor is foreign government consideration for reviewing overseas
option for business such as exchange rates of currency because there are different currency of all
the countries and it important to consider the currency rates. The access that are need for material
and resources in order to consider the communication of that country. People have different
perception in order to use their own language and the local people are not going to use another
language so it can be the challenge for business for suppliers and buyers because they are not
going to communicate at one direction (Alonso, Solis and Santoni, 2020). Also, the customer
satisfaction is important to get their feedback and run the business by considering all these
factor. The role of government also played important role in order to program the business
because there are different policies are followed by the owner of the company while expanding
that is why it can be impacted negative on the organisation. Also, employment laws are different
and it important to consider because when the firm hire local employees it can be benefit for the
company because they all know about the regional place and market demand.
That is why there are necessary to follow those laws that are in favour of employees so
that it can help to improve the productive of the company. The psychological factor are need to