Running head: EGT1 Task 4

Element A. Cross-Cultural Difference Intentions of expanding a company into an Asian country such as Thailand certain cultural difference should be considered. There are multiple areas of differences between Western and Eastern cultures that should be researched such as: language, communication, religion, political structures, social structures, aesthetics, material culture, attitudes, and beliefs. Most of these areas overlap and can impact cultural interactions. The primary spoken and written language in Thailand is Thai. Consideration of the language written and spoken would require a translator to ensure what is said or written is understood appropriately. Simple United States terminology could be translated incorrectly causing major misunderstanding causing conflict with expansion. In addition, Thailand natives are personable desiring established relationships other than “business” relationships as in the United States.
Another aspect of language and communication is body language. Understanding the unspoken language and how it is received in Thailand can greatly impact relations and businesses. In Thailand a simple smile can have one or more meaning as well as the action of not smiling. The United States has a tendency to not socially interact with strangers much less smile back. Other unspoken gestures regarding parts of the body such as the head and feet have symbolic meaning in Thailand and no value in the United States. The head in Thailand should be respected and not touched. The feet can show disrespect if one uses their feet to point in Thailand. For example, when sitting with others generally at floor level ensure that you do not point the bottoms of your feet at others or it will be considered an insult.
Greetings are significantly different between the two cultures. In the United States it is customary to shake hands or even hug with no regard to personal space. If you were to shake someone’s hand in Thailand especially with the left hand it would greatly offend the native. The customary greeting in Thailand is the “Wai” performed within a safe distance by placing the palms of your hands together in the upright position with finger placed in front of your chin and lips and slightly bow your head towards your fingers. The “Wai” can be used to apologize and show a level of respect based on the height of one’s hand placement where in the United States a firm handshake shows a sign of respect. (Mundo Exchange Organisation, 2014)
The social structure in Thailand is hierarchal with upmost respect for the elders, monks, and leadership to whom are greeted first or it will show disrespect. Age or elders are not a consideration of immediate respect in the United States many of the U.S. leaders may be younger than subordinates. Authority figures in Thailand expect certain level of respect from others by maintaining a lower head height contrary to the United States there is no consideration of head height. For example, in the United States when a member enters a meeting where everyone is seated they may remain standing or walk around the room introducing themselves, but in Thailand it is customary for that person entering a room of seated members to quickly take a seat to not show or assert any misunderstood authority. In addition, the social structure in Thailand is a collectivism valuing relationships, entire families, and even providing for the weak. However, the social structure in the United States is individualism providing more value to material success and personal assertiveness than family and personal relationships. (Ball, Geringer, Minor and McNett, 2010)
The Religion of Thailand is Buddhist a significant part of the Thai culture. Buddhism believes that their actions today impact reincarnation. Understanding the bases of believes provides an understanding of their avoidance of conflict, smiling nature, hospitality, and politeness. Certain American mannerism can be offensive in Thailand such as conveying too much emotions by speaking loudly. American’s should attempt to control emotions within their speech in order to not provoke any miscommunication or disrespect would be beneficial to entrepreneurs. (mundoexchange.org, 2014)
Any form of miscommunication, misinformation, or disrespect would eliminate the possibility of expansion into the market of Thailand. Study, understand, and apply small cross-cultural differences will greatly assist with acceptance.
Element B1. Product Expansion into Thailand careful consideration of the product being introduced into the foreign market requires evaluation of the demand of the “total product” to include: physical product, brand name, accessories, after sale service, warranties, instructions, company image, and packaging. Other factors to consider are foreign environmental forces, sociocultural forces, economic forces, and physical forces. First demand, if the product is not going to be demanded in the foreign market of Thailand then why expand. The product/service being expanded is the Hotel Chain “Embassy Suites” is there a demand for hotels in Thailand? The economy is booming in Thailand specifically around the capital Bangkok providing ample opportunity for expanding of the hotel service. Introduction of the total product should consider marketing mix to meet the demands of local consumers. The physical name brand hotel structures in the United States contain large and luxuries rooms with modern conveniences, but is that necessary in Thailand? Would there be any changes to the structure to meet the local consumer’s needs? Consideration of efficient space saving qualities plus aesthetically appealing designs reflecting the Buddhism belief will meet the demand of local consumers. In addition, construction would need to be similar to the temples incorporating Buddha images/icons for aesthetic appeal. Construction should also consider using local textiles and resources to avoid any export/import laws. Next, consideration of the brand name, Embassy Suites, and the Thai translations. For example, the word embassy means consular office or envoy extraordinary, and suites translates to followers’ apartment or rooms. The question is would local consumers believe that this building is only for government officials? Changing the brand name from Embassy Suites to Royal Suites translates to grand or excellent rooms. Another consideration is the service quality should respect the beliefs of Buddhism by respecting individual space and the social hierarchy. By offering service positions to natives would provide the immediate cultural demands for local consumers. Warranties and guarantees are another area of consideration to promote the quality of service such as money back guarantees, but ensuring not to discount prices that may result in a misunderstanding of poorer quality. By creating the market mix that incorporates both cultures will greatly assist packaging the total product to ensure profit maximization.
Element B2. Price In the United States the average rate for suites depends on location averaging $80.00-$200.00 per night. Expanding into Thailand consideration of the current economy is a requirement. As of 2012 Thailand’s economy is well developed with a free enterprise economy containing strong exports surrounded by industrial and agricultural commodities. Currently Thailand has less than 1% unemployment rate with a government enforced $10.00 a day minimum wage policy. Consideration of the $10.00 a day minimum wage verses a $7.25 hourly minimum wage policy as in the U.S. will offset the price or rate of the room per night. Therefore the suite nightly rate would need to be reduced. The nightly rate reduction of the room could be compensated by employing 50% Thai natives adhering to the country’s minimum wage policy of $10.00 per day making up the loss of discounting room rate from $80.00-$200.00 to $20.00-$50.00 per night achieving profit maximization. The rate reductions also takes in consideration of foreign national price and local taxation. In addition, to ensure profit maximization through Thailand’s tourism income by increasing the nightly rates during peak tourist season. (www.cia.gov, 2014)
Element B3. Promotion Advertising in Thailand would be different than in the United States. Consideration for Thailand’s culture, religion, monarchy, and superstitions have to be applied. In the United States the only advertisement consideration is what age group or market the industry is trying to dominate. The main medium used for advertising in Thailand is the television similar in the United States. For increased advertisement opportunities the use of billboards since the country is still developing and only cable television is authorized to show marketing commercials. All commercials in Thailand should use direct communication verses United States where sometimes one is left trying to figure out what the commercial is actually selling. Another consideration is respecting the Thai culture. For instance the hotel commercial showing the hotel with a likeness to a Buddhist temple having the King and Queen checking in would represent the Thai culture. Furthermore, the commercial shows a fully local staff adhering to all social structures. Then after entering the room the King ask the Queen to accompany him on business but she would politely declines. The next phase of the commercial the Queen ensures she is alone looks around the room while letting her hair down, and then jump up and down on the bed. This would type of commercial contains a slight sense of humor while showing the hotel honors the main religion and their government. The United States would not consider taking this simple approach for a hotel commercial instead loud parties, famous people, and even scandalous events would be implemented for advertisement purposes. (Startupoverseas, 2014)
Element B4. Placement Placement or distribution considers geography, business strategies, and environmental factors. Thailand is located in Southeastern Asia bordering Andamen Sea and the Gulf of Thailand. Thailand controls all land export/import routes for the bordering countries gaining major economic control and promoting continued economic growth of free enterprise and pro-investment ideas. Currently the capital of Bangkok is a booming industrial location attracting migrant workers as well as tourism providing an ample labor force. The geographical location with economic control is a great asset towards expansion in Thailand specifically Bangkok. In the United States placement or distribution would consider alternative factors without much emphasis towards geography. Instead, the United States expansion of hotel placement or distribution considers federal and state laws, local taxation, competitor marketing and pricing, cost of labor and materials, and tourism traffic for hotel expansion. Business strategies greatly differ from Thailand considering Thai businesses prefer partnerships valuing personal relationships where the United States prefer individual owners with investors known as silent partners with no interaction other than financial. The final consideration is the weather. A specific example is Thailand’s historic flooding of 2011 similar to the flooding of Hurricane Katrina in Louisiana. Unlike the United States delayed recovery by relocating the flood victims the Thai government was proactive by immediately approving flood mitigation projects encouraging the economy to continue. The placement or distribution decision of Thailand’s capital Bangkok the hub of the industrial district fits the level of economic growth encouraged by the government. (Central Intelligence Agency, 2014)
Element C. Ethical Issues Ethical judgment lies in the cultural beliefs that is reflected in individual or collective behaviors. These beliefs impact language, work days, habits, and values. Two different countries with two different cultures will perceive ethics differently. A major ethical consideration is business interactions. Thai interaction with business associates vary greatly from United States business associates. For instance, in Thailand it is customary to provide gifts upon first meetings just to be nice promoting personal relationships. In the United States when business partners provide gifts at a first meeting it would be considered bribery or an attempt to “buy-out” loyalty. A second ethical consideration is patents, copy rights, and trademarks. In the U.S. any filed patent, copy right, or trademark is legally protected preventing anyone utilizing the items that are officially protected. However, in Thailand patents, copyrights, and trademarks are not protected and can be utilized and copied loosely without penalty. When a company expands into Thailand the company should take extra steps to protect any patents, copyrights, or trademarks. It is apparent that ethical issues can arise from small situations leaving a significant impact positive or negative on any prospective business expansion internationally. (Ball et al., 2010)

References
Ball, B.A., Geringer J.M., Minor, M.S., & McNett, J.M. (2010). International business the challenge of global competition (12th ed.). New York, NY: McGraw-Hill/Irwin.
Central Intelligence Agency. (2014) The Worldfact Book: East & Southeast Asia:: Thailand.
(2014, February 11). Retrieved February 15, 2014 from https://www.cia.gov/library/publications/the-world-factbook/geos/th.html
Mundo Exchange Organisation. (2014). Cultural ways do’s & don’t’s of Thailand. Portland, OR: mundoexchange.org. Retrieved on February 15, 2014 from http://mundoexchange.org/2011/02/cultural-ways-and-do%E2%80%99s-and-don%E2%80%99ts%E2%80%99-of-thailand/
Startupoverseas. (2014). Marketing a business in thailand. England and Wales. Retrieved on
February 18, 2014 from http://www.startupoverseas.co.uk/starting-a-business-in-thailand/marketing-a-business.html