Answer to Question #314322 in Management for NDhar

Question

‘Shanghai Noodle Express’ is a popular fast food company in China. The Business head, Xu Kitang wants to open the company’s subsidiary in India, as it is a popular destination for Chinese cuisine. However, previous attempts of expansion have failed. Therefore, this time they have hired an experienced Market Research Expert like you for suggestions. Keeping the above scenario in mind,

a. Explain which aspects of socio-cultural environment do you think should be kept in mind before venturing into India. Give examples.

b. Briefly explain the different approaches that you would suggest for an effective external environmental analysis of a fast food company

Answer 1

a) The sociocultural environment refers to trends and developments in changes in attitudes, behaviour, and values in society. It is closely related to population, lifestyle, culture, tastes, customs, and traditions. One has to consider the socio cultural dimension of Indian entrepreneurship. The various socio cultural factors influencing entrepreneurship are family background, education, caste, religion, social networks and social background and a set of theories which may be applicable to entrepreneurship. It is identified that: religion, cultural values, caste, education, family background, social networks, values, beliefs may influence Indian entrepreneurship. In general entrepreneurship is conceived as a process that converts business opportunities into wealth creating activities with available resources involving innovation and creativity.

b) Different methods of strategic analysis are considered in this article, namely: SWOT analysis, PEST analysis, STEP analysis, GRID matrix, SNW analysis, EFAS form and others that allow estimating the factors influencing the external environment of the market on the basis of which organizations can make effective. Political and legal factors: stability, taxes, state policy of foreign trade activity regulation, political stability, legislative system, level of judicial system.

Economic factors: GDP, GNP, investment climate, inflation rate, currency stability, market

capacity. Social and cultural factors: religion, education, communication means, language, customs, norms of behaviour. Scientific and technological factors: technological support of production, availability and application of new technologies in business, expenses on R&D.