International Business and Communication: Tesco's China Strategy

This report examines the international business and communication strategies of Tesco, a British retail company, as it plans to enter the Chinese market through a joint venture with Wumart. It identifies various challenges Tesco will face, including cultural differences, intellectual property rights issues, logistics complexities, sales and distribution hurdles, and the highly competitive market. The report applies Hofstede's cultural dimensions to compare the cultures of the UK and China, highlighting significant differences. Based on these findings, the report provides several recommendations for Tesco, such as analyzing Chinese culture, understanding local demands, adhering to rules and regulations, establishing a robust logistics and sales network, and introducing innovative products. The analysis aims to guide Tesco in successfully navigating the complexities of the Chinese market.

International business and communication

Table of Contents
 Introduction
 Challenges to be faced by a company in China
 Hofstede Cultural Dimensions
 Recommendations
 Conclusion
 References

Introduction
International business and communication refers to the targeting of
international markets by the companies and ensuring that they are able
to communicate their requirements highly effectively and efficiently.
For this assignment, Tesco has been chosen. It is a British Company
which deals in groceries and other retail products. It is planning to enter
into a Joint Venture with Wumart which is a Chinese Retailer dealing in
various products and services. In this presentation , focus will be made
on challenges to be faced by the company in China, application
intercultural communication theories. Additionally, focus on
recommendations for the company will be made as a part of this project.

Challenges to be faced by company in China
In China, the foreign companies have to deal with a lot of challenges.
Some of the challenges which will be faced by Tesco in China are as
follows-
Cultural problems- The Chinese Culture is very different from the
culture of different countries in the world.
Adaptation and localization of business- Foreign Companies in China
face issue of adaptation to the changing needs and requirements in the
market.

Continued...
Intellectual Property Rights-
China has strict rules regarding
IPR. Therefore this becomes a
challenge for the foreign
companies who want to do
business here.
Logistics challenges- China has
different rules and regulations
for logistics which makes this
process costly and complicated
for the Chinese companies.

Continued...
Sales & Distribution
challenge- Chinese Distributors
and Western Companies have a
big void between them.
Competitive market- China
has a highly competitive market
with the presence of different
types of competitors.

Continued...
Hofstede Cultural Dimensions-
It is a cultural theory which identifies and compares the culture of two
countries on the basis of various parameters. The parameters under this
theory are explained as follows-
Power distance- This refers to the distribution of power among the
people in a particular country.
Individualism- A higher-level of individualism means that the people
have a preference only for themselves in a society.

Continued...
Masculinity- This refers to the
preference of the society for
achievement, heroism,
assertiveness etc.
Uncertainty Avoidance Index-
This index refers to the level of
comfort of society with
uncertainty and ambiguity.

Continued...
Long-term orientation vs.
Short-term orientation-
This index refers to long-
term approach and short-
term approach of the people.
Indulgence- Indulgence
means that a society allows
more freedom to its
members. Restraint means
that the society imposes
restrictions on the people.

Continued...
Therefore on the basis of this comparison it can be said that there China
and United Kingdom are both vastly different in their cultures. Thus it is
clear that a company from U.K. Will have to face various challenges in
China while expanding business there. Therefore, this acts as a
challenge for Tesco if it wants to enter into a Joint Venture with Wumart
it will need to consider all of these factors and compare the culture of
both the countries to get a fair idea of actions to be taken while setting
up business in the country through a Joint Venture.

Recommendations
Analysis of culture- It is recommended to the companies who want to
enter into the market of China to analyse the culture of the country
closely.
Understanding of Chinese demands- It is recommendable for the
companies entering the Chinese market to understand the Chinese
demands clearly.
Following of rules and regulations- It is important for the foreign
companies to make sure that the rules and regulations of China are
clearly followed by them.

Continued...
Setting a logistics network- Setting up of logistics network is
important for the foreign companies so that they are able to set up a
strong base in China.
Setting up strong Sales & Distribution network- Setting up of strong
Sales & Distribution network is quite important for the companies who
are entering China to do business.
Innovative products- Brining of innovative products is recommended
to the companies entering China because Chinese people are fond of
new products.