To ways of looking at culture Factors when entering an international market on the case of Foster’s brewing up it's asian strategy

Prior to the plan to invest in the Chinese market Foster’s had done market research on how they products and brewery’s would develop and sell in the market, the information was gathered in 1930’s and showed that China wasn’t ready economically or technologically at this time for Foster’s to be successful in the market yet but had changed in 1990.

China was seen as large and potential market for the bear market, and future grow of Foster’s 1990. This was because that around quarter of the world population were here at this time and growing, and was having a dynamic economic grow, as well as the Chinese authorities were encouraging Foreign investments with incentives. This was seen by Foster’s as the economic development of China was growing so was the disposable income of the population, and then Demand for beer would grow in the market with a growing young population.

When choose and assessing a foreign market for entry and expanding operations a company must look at, variety of factors including market potential, levels of competition in the market¸ the legal and political environment, socio-cultural influences when assessing a foreign market for entry.  Foster’s choose to do this with a Joint Venture with local production and market agents.

Socio-cultural influences should also be considered to see what cultural differences exist between the firm and host country market, and how this would affect products in the market. Socio-cultural factors are such as religion, customs and beliefs, values, langue and social standings.

Example of these is of Hall’s low-context/ high-context approach, as Australia would been seen as low context and China is high context. Low context cultures is one in which a speaker explicitly convey message to the listener. While high context cultures, is that the context of the conversation occurs is as important as the words spoken, and cultural clues are important in understanding what is being communicated. A society type of culture will have impact on its business behaviour.

Another way of assessing a market for entry is Hofstede’s five dimensions this would have given Foster’s knowledge of how compatible and successful their products and operations would be In the Chinese market.

The first is that of Social orientation which is individualism (the culture belief that the person comes first) that of Australia, and collectivism (the belief that the group comes first) that of China. Foster’s would have been able to see that the Chinese make choices as group, as Australia their home culture makes them as individuals.

The second is power orientation, refers to the beliefs that people in a culture hold about the appropriateness of power and authority in hierarchies such as in business.

 The third is uncertainty orientation is about how people of a culture feel about uncertain and ambiguous situations.

The fourth is goal orientation, how the people are motivated to work towards goals.

The last is time orientation and is extent in which members of a culture adopt long term or short term outlook on goals, life, and concerns of others.

In the case of Foster’s they could see that the Chinese market differed from their home market in Australia because, they made choices base as group or family , the younger members would respect decisions of older members about products, were uncertain about their products, and it would take time for the customers to adopt the new products offered by Foster’s. And that because of the differences in cultural there were problems with the how the products were distributed and made, as their partners did not show the same View on time as fosters did, so lead to problems in production and goal objects. As you can see it is not just how, who and when you are going to market products to new customers but also involves evaluation of new market in size, entry mode, and social and economic factors that play a large role in success of market entry and market growth internationally.