OLA's Business Expansion in China: A Cultural Analysis

This assignment analyzes the challenges OLA faces while expanding its car rental services into the Chinese market. It identifies country-specific issues such as regulatory environments, competition, and technological differences, as well as cultural aspects like language, consumer behavior, and the importance of a Chinese identity. The report utilizes Hofstede's cultural dimensions to compare India and China. Key challenges include language barriers, cultural purchasing behaviors, and the technological landscape. The assignment recommends training programs, effective technology utilization, and brand positioning to succeed in China. The analysis offers insights into navigating cross-cultural business expansion, providing valuable strategies for companies aiming to enter the Chinese market.

Working across culture
OLA expansion in China

Introduction
• OLA is one of the biggest
transportation network
company that aims to
expand its business in China.
• OLA will have to face cross
cultural challenges while
expanding into china.
• China has a unique culture
which has a direct impact on
the way operations are being
performed in the companies.

Country specific challenges
• People approach towards Indian companies: People
feel in a different way about India companies
• Regulatory environment: China have made strict
regulations in the market
• Complex bureaucracy: Bureaucracy is corrupt.
• Cyber-attacks: There is increase in the numbers of
Cyber attacks.
• Trade war: Increasing trade between United States
and China

Industry specific factors having impact on
business
• Competition: The competition in the Chinese
transportation industry is very high hence it is creating
challenges for companies like OLA to expand in the
nation.
• China specific technology: Many of the technologies that
operates at global levels are not operational in China and
this will have impact on OLA management of operations.
• Labour cost: There is increase in the labour cost in China
which will have impact on the overall strategies and cost
of the company.

Cultural aspects that needs to be given
attention
• Language and literature: Chinese language and literature
is different.
• Chinese identity: People in China love their own identity
and hence it is critical for the companies to portray
themselves into the Chinese identity.
• Reward oriented society: The society of China is reward
lover.
• Safety regulation: The safety regulations in China is strict
• Staffing consideration: More Chinese employee needs to
be hired.

Cross-cultural factors
According to the hofstede cultural
dimensions:
• China is more collectivist society
while India is individualist.
• Power distance index in China
and India is same.
• On the score of masculinity it
stands with India.
• In uncertainty avoidance China
has lower score.
• Higher score on long term
orientation.
• On indulgence also both the
countries are almost similar.

Three main challenges
Among all the three main cultural challenges that
OLA will have to face are:
• Language: There is huge difference in the
language of India and China.
• Cultural purchasing behaviour: People love to
buy from the companies that have Chinese
touch.
• Technology oriented culture: Technology has
taken deeper routes in the Chinese society.

Recommendation
Some of the recommendation
are:
Training: It is critical that
company has a training
mechanism that allows them
to provide all the knowledge
about the technological skills
that is to be used by the
company without failing to
address threats that are
brought by higher use of
technology.

Continue
• Effective utilisation of
technology: It is critical
that this firm uses most
advanced technologies
within the industry. This
will allow the firm to
make operations in an
effective manner and
with more security.

Continue
• Brand positioning: It is
critical that firm positions
and portrays itself as the
company that looks more
Chinese company rather
than an Indian firm.
Better brand positioning
will allow the firms to
attract more customers
towards their business.

Conclusion
• There are several types of cultural challenges
faced by OLA while expanding in China.
• Language, Cultural purchasing behaviour and
Technology oriented culture are the three major
challenges faced by OLA.
• In order to deal with these challenges it is
recommended to provide advanced technological
training to employees, brand positioning as
Chinese employees and higher use of technology.

References
• Nicholson, R. R., & Salaber, J. (2013). The motives and
performance of cross-border acquirers from emerging
economies: Comparison between Chinese and Indian
firms. International Business Review, 22(6), 963-980.
• Podoshen, J.S., Li, L. and Zhang, J., 2011. Materialism and
conspicuous consumption in China: A cross cultural‐
examination. International journal of consumer studies, 35(1),
pp.17-25.
• Liu, Y. and Woywode, M., 2013. Light Touch Integration of‐
Chinese Cross Border M&A: The Influences of Culture and‐
Absorptive Capacity. Thunderbird international business
review, 55(4), pp.469-483.