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BUSINESS
Task 01
Introduction
According to the task we were given, we had to answer the following questions.
1. The business practices of these two countries
2. The buying behavior of consumers of these countries
3. The future economic developments of these countries.
We have chosen USA and China as culturally different countries and studied the economic as
well as the business behavior of those two countries.
This report contains the analyzed and studied information in relevant to the above mentioned
questions.
Thinking patterns
Expression of self
Time sense
Conflict results
Win or lose.
Type of logic
Group duty.
We oriented.
Flexible. Does not have to be
on exact time.
Does not have to be win or
lose. No perception of two
states.
More subtle (Spiral).
Even the people who speak the same language fail to understand each other. Like in the story
told by Winston Churchill, about a misunderstanding that happened between the Americans and
British during WWII. The British wanted to table it meaning deal with it now, Americans
thought it meant to delay the matter until later.
Looking at the previous table its clear how diverse these two cultures are. So its best to
understand the cultures before dealing to avoid frustrations and distrusts.
Americans quickly build up business relationships, but are usually shallow and not always long
lasting. Although if developed tends to last very long.
Making a first good impression is essential. Especially when dealing with a foreign country it is
best to understand their basics, and greeting rituals. In china, a first positive impression is not
enough. The Chinese have their own business etiquettes such as gift giving, greeting rituals,
when to display emotions, how to use intermediaries, meeting custons and conduct, & time
perceptions, guest-host relations.
So to sum up about the cultural diversity, there are five principles (5 Ps, by Mark Buchman) one
must keep in mind before dealing with a different culture. These are:
Plan. (There has to be something written which all parties will agree on.)
Persevere. (Hold on to the business. Dont just give up.)
Patience. (Its going to take time. The business wont blooms instantly.)
Personal relationships. (Communicate, build relationships. Its essential in business
especially in Asia.)
Perfection. (Learn from the mistakes.)
Problem
Recognition
Information
Search
Evaluation of
Alternatives
Purchase
Post Purchase
Behavior
Although this method is applicable to any sort of buyer in the world; the method of using this
process could be different from one person to another. Especially if we compare two people from
two countries such as United States of America and China, their methods are different from
another.
Culture, attitudes, principles, beliefs are the main factors which affect to differentiate the buying
behavior of USA and China.
With the globalization; above mentioned Chinese consumer behavioral patterns also have
changed. With the high technology usage people in China are following individualism instead of
collectivism they used to follow earlier. With the birth control introduction in 1979 (Dusheng
generation only one child per a family) Chinese have become more self-centered and
individualism has expanded. Currently; China has the worlds largest e-commerce market with
210 million online shoppers.
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year
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Chinas GDP increased from $1.1 trillion to $1.6 trillion from 2000 to 2004, $3.43 trillion in
2007, $ 4.33trillon in 2008 $ 4.9trillon in 2010.
Chinas foreign exchange reserves more than $ 200 billion in 2004 to reach $609.9 billon, $1.5
trillion at the end of 2007 $2.8 trillion in 2010,$3.2 trillion 0n July 2011.
China had about $4.5trillion during 2010 under personal savings and a saving rate of close to
50%.
In World Bank figures they explained above figures with more explanations. China is the worlds
leading producer of steel, copper, aluminum, cement and coal since several years. And past
decades as a consumer china surpassed Japan in 2005 as the globes second larger petroleum
importer. In 2006 China again surpassed the Japan as the worlds number two auto market with
total sales of 7.2 million vehicles and production of 7.3 million. In 2009 China surpassed US
auto market and also in 2010 Chinas car production and sales reached 18 million respectively.
In 2006, the number of overseas tourists grew by 3.9% to 125 million and foreign exchange
earnings increased by 15.9% to USA dollars 33.9 billion.
According to the world tourism organization china remained 4th most popular tourist destination
in the world. (Behind France, Spain, and USA)
As an owner of the 2nd largest economical country, China now experienced their 12th five-year
plan goals (from 2011 to 2015) since 2011. Their obligatory targets to reduce the use of water
(per unit of value added 30%) environmental protection, energy reduction, and land
conservation.
They achieved 11.2% GDP growth through 2006- 2010 (last five year plan). China plays most
vital role in worlds economy. But also they have experienced problems like corruption,
intelicethal property rights violation, pollution of the environment, contaminated foods and stuff
for example, injecting water into meat to increase its weight, and contaminated baby milk
powder with melamine. Also, they are experiencing other problems as well. Coastal region and
hinterland, the rich and the poor, the urban and the country side Housing price, Education, Social
security (rapid aging of the populations will mean pay as young pension schemes will become
unsustainable)
These type of questions are affected to the Chinese economy. But the economic reform since
1978 is a great success through social system re-organizing, dual wheel driving under the
structural factor, market mechanism: replacing the plan, governmental intervention: human and
institutional capabilities under the transitional and traditionally they changed formal and
informal relations. The prospects for continued rapid growth of the Chinese economy are
excellent. Still there are some trends and challenges to China. They are promoting domestic
consumption, urbanization, financial reform and addressing income disparity. Yet, China has a
long way to go to become really economically powerful country in terms of per capita income.
When considering USA, they have an advanced mixed economy. Which includes a variety of
private freedom, combined with centralized economic planning and government regulations.
USA has a high income and is a developed country. Their top 3 trade partners are Canada, China
and Mexico. Top industries are steel, motor vehicles, telecommunications, chemicals,
electronics, food processing, and consumer goods.
USA recorded current GDP rate of 1.876% in year 2013. GDP country rank is number one. They
achieved this much of GDP per capita with agriculture-1.25%, services-78.6%, industry-20.15%
and manufacturing-12.9%.
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Even USAs economy will face major challenges. There are the pressures built in health care,
monetary, housing problems, immigration policies, and national or international security threats
such as terror of wars affecting the USA.
Because of that, USA invested 3 trillion dollars over 17% of total GDP under the health activities
during the past decade. With immigration they are eventually introduced red card facility, which
is facilitated with two years work permitted. Also the congress and the President introduced
home loan facilitate in USA.
Monetary or the tax reforming is still a major challenge to the USA economy and its
discouraging investments in USA. That is a reason to lower the productivity and reduce wages.
Yet the President has failed to address this problem.
Regardless those mentioned factors, as a country USA is one of globes number one biggest
economy owners.
References
Yan Luo, (2009), Analysis of Culture and Buyer Behavior in Chinese Market
http://www.ccsenet.org/journal/index.php/ach/article/view/361/290 [Accessed on 27th October
2014]
Helen Wang, 2012, Five New Trends of Chinese Consumers
http://www.forbes.com/sites/helenwang/2012/12/17/five-new-trends-of-chinese-consumers/
[Accessed on 27th October 2014]
http://www.chinainternetwatch.com/2186/new-buying-behavior/
http://www.bauer.uh.edu/kacen/documents/kacenlee_impulsebuyingjcp.pdf
http://www.universalconsensus.com/services/private-sector/american-consumer-behavior/
http://www.legacee.com/the-global-leader/chinese-businessculture/#sthash.W1efdypR.XoZ1JRP0.dpbs
http://middlekingdomlife.com/guide/mianzi-guanxi-china.htm
http://www.forbes.com/sites/languatica/2012/03/15/want-to-capitalize-on-china-youbetter-have-good-guanxi/
http://www.tradecommissioner.gc.ca/eng/document.jsp?
did=107932&cid=512&oid=32
I ensure that each group member participated equally as mentioned above, to complete this task.
____________________________
Group Leader