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Cross cultural issues in international business - Essay Example

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Introduction Globalization has made it possible for the international organizations to expand at the global level. With fewer barriers to entry, international firms are entering into new markets and expanding their manufacturing as well as customer base. However, expanding into an international market also poses significant challenges as entering into a new market requires significant strategic insights…
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Download file to see previous pages Intense competition at the global level therefore requires that firms should effectively manage their cross cultural team work most efficiently. Failure to do so may create more problems for the firms and may ultimately result into the downfall of the firms. It has been suggested that working in an environment which is diverse in nature pose significant challenges for the firms to overcome those obstacles and operate with same level of efficiency and competitiveness they usually perform with in their local markets. AB Volvo is a Swedish Manufacturer of trucks, buses, construction equipment and cars. It also offers marine systems and financial services in different markets thus diversifying itself at product as well as at market level. Being one of the well-known global brands for trucks, Volvo Track, its brand for trucks, has been setting a manufacturing plant in China. This paper will discuss and explore the cross cultural management issues for Volvo in Chinese market. VOLVO – A Brief Introduction AB Volvo is a Swedish Manufacturer of Trucks, buses and cars and has been operating in European market. It also offers financial services in markets where it operates thus have been diversifying itself into different products and markets. The company was officially formulated in 1927 when it rolled out its first car and since then has really transformed itself as one of the leading manufacturers of trucks in the world. It operates various business including Volvo Trucks, Mack Trucks, Renault, Volvo Construction Equipment, Financial services as well as other business segments. It has been manufacturing and exporting buses and trucks since 1930s and really became successful outside Sweden after the World War II. It has also been manufacturing marine engines and became one of the leading manufacturers of marine engines in the world. Over the period of time, the firm has either acquired new businesses or sold its existing business. Firm sold its car business back in 1999 to Ford Motors. This sell out was considered as necessary to refocus the firm’s business strategy on the production and marketing of commercial vehicles only. It has now proved itself as one of the leading manufacturers of Trucks and Buses at the global level. It has also decided to set up its manufacturing facilities in China with the aim to capture the Chinese market as well as set up the base to serve Asian market. Volvo in China China represents one of the most important markets for Volvo as it anticipates selling more trucks in the future in Chinese market. Though there are already other foreign and local players in the market however, the firm is expecting an increase in its sales of trucks in the Chinese market. Apart from the truck business, Volvo Cars have also been purchased by a Chinese manufacturer from Ford Motors Co however it has been hard for the Chinese firm to establish the factories and start the production on normal footings in order to get a foothold in the Chinese markets. China being culturally and linguistically different country however, also offers significant cross cultural management issues also. From managing employee relations, customer services to having relationship with the government officials, China pose a ...Download file to see next pagesRead More
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