1.Create a problem statement for the client, Azure Sky Tea, based on the Hofstede model.

Problem Statement

Azure Sky Tea is an herbal tea company located in the Rocky Mountains of the United States. Azure Sky Tea has nine percent of market shares and is looking to increase market share by expanding into different markets. The problem that Azure Sky Tea company is facing is that they are trying to find a market that suitable with their low key culture. In order to find suitable countries one must find the countries on the Hofstede that score similar in all of the four dimensions to the United States scores. It is important to find two countries that are similar to the United States because, Azure Sky Tea wants to operate their office with the same cultures.

2. Classify possible combinations of countries for location of the Azure Sky Tea’s offices based on the Hofstede model. Include a discussion of the home country’s (U.S.) relative position on the Hofstede scales as compared to other countries. Note: Utilize the Hofsetede module to include all parameters (i.e., individualism, uncertainty, power distance, masculinity) for the classification.

The Hofstede Model is a model that gives a score about the culture in terms of four dimensions such as, individualism, power distance, masculinity, and uncertainty avoidance index. A high power distance score indicates that people accept the difference in power between their superior and themselves and power is concentrated within the hands of a few individuals while a lower score indicates that people can’t take the difference in the score and power is well shared among the players in the system. Australia and Great Britain have similar scores to the United States. According to the Hofsetede in the power of distance Australia scored 36, Great Britain 35 and United States 40. Brazil and Argentina scored rather high in power of distance, Brazil 69 and Argentina 49, giving the impression that they would operate differently from the main office in the United States. The individualism score gives us an idea of the relationship and strength between the people in the country in a system. In individualism, Australia and the United States scored similar, Austrailia 90 and United States 91, Great Britain scored slightly less at 89.

3.Choose two (2) countries as potential locations for the Azure Sky Tea’s new international offices. Next, develop a set of specific recommendations for the company. In your recommendations: According to The Hofstede centre, the model shows that the United States, Great Britan and Australia all have similar qualities. I think this is rather important while expanding the Azure Sky Tea company because it will be easy to get use to the culture. As with opening any business, there are many risks. Some of those risks include: political risks, legal, bribery, graft and corruption. Azure Sky Tea could potentially face non payment risks and legal risks. Many exporting business encounter the risk of non payment. Another risk that Azure Sky Tea may face if they open an office in Great Britain is the economic risks, human rights and also terrorism.

a.) Include the preliminary data that you gathered in the previous question.

Australia and Great Britain Azure Sky Tea is looking to expand to different countries. Based on the information collected and after carefully reviewing the score in terms of the four dimensions on the Hofstede Model I would recommend for Azure Sky Tea to open new offices in Australia and Great Britain. Australia and Great Britain best match the United States scores. By opening new offices in these two locations the scores show that business would operate similar to the offices located in the United States.

b.) Demonstrate the most important dimensions of the Hofstede model for Azure Sky Tea to consider as a U.S. company and for the industry that it represents.

The most important dimension for Azure Sky Tea is the uncertainty avoidance index because, it expresses the degree of comfortably of its customers. Uncertainty avoidance Index (UAI) basically shows how society deals with a new product or service. For a U.S. Company that is looking to expand to another country it is very important that the customers and the people that live in these countries feel comfortable with the product so that increase sales. Since the uncertainty avoidance index is at high level for the United States as well as Australia and Great Britain means that they use formality when interacting with others making it a bit easier for Azure Sky Tea company customer service offices to get comfortable with the countries culture.

c. Predict the economic opportunities of your recommendations.

In Great Britain, I predict at least $35,000 increase in sales within the 1st year after opening the Azure Sky Tea office. I would recommend that Azure Sky Tea open an office near the main city. In Australia, I predict at least $40,000 increase in sales within the first and second year after opening in Australia. I would also recommend for Azure Sky Tea to open their main office in Sydney, Australia.

4.Speculate on the main potential risks inherent in relocating to the countries that you are considering. Suggest at least two (2) approaches that the Azure Sky Tea leadership could leverage to mitigate the potential risks that you have identified.

The main potential risks inherent in relocating Azure Sky Tea to Australia and Great Britain are lack of business knowledge within employees and potential partners. Another potential risk is government regulations and different cultures. The Azure Sky Tea could leverage to mitigate the potential risks by sending their own training employees to train potential employees. This could help make sure that the training process goes smooth and quickly. The Azure Sky Tea, should also familiarize themselves with all government rules and regulations and different cultures.

References
1. Protecting your brand: event for FMCG companies. (2014, July 20). FoodProcessing Complete. Retrieved July 26, 2014, from http://www.foodprocessing.com.au/news/68881-Protecting-your-brand-event-for-FMCG-companies
2. THE HOFSTEDE CENTRE. (n.d.). Cultural Insights. Retrieved July 25, 2014, from http://geert-hofstede.com/the-hofstede-centre.html
3. Australia | Economic Forecasts | 2014-2030 Outlook. (n.d.). Australia | Economic Forecasts | 2014-2030 Outlook. Retrieved July 26, 2014, from http://www.tradingeconomics.com/australia/forecast
4. Australia Business Etiquette & Culture. (n.d.). Australia. Retrieved July 26, 2014, from http://www.cyborlink.com/besite/australia.htm

-----------------------
[pic]