Sanctuary Soft, a young started up security software company in United Stated is planning to expand to overseas due to the need of providing the worldwide service to its client and the pressure by its shareholder. After the meeting between the company’s CEO and larger shareholders, they are distressed in whether stay in the US market or expand overseas. The four potential countries favour by Sanctuary Soft in its expansion plan included China, India, Germany and United Kingdom. In order to select a proper country for Sanctuary Soft’s first foreign expansion, this report will provide a detail explanation regard to the motivation of the first internationalization of Sanctuary Soft; the market opportunity of four …show more content…
Gradual internationalization strategy can defines as the company gradually increases its international involvement through enter to the business systems that are close to one another tend to have stronger commonalities in terms of the nature of the dominate institutions and culture similarity first (Edwards & Rees ,2011,77), and then move to other culture difference countries when its internationalization strategy become mature. It is riskier to operate in a culturally and linguistically difference market due to the misunderstanding and difficult communication between the HQ and the subsidiary. Therefore choosing similar culture country for Sanctuary Soft to set up its first overseas subsidiary can overcome some disadvantages which inherent in the culture and linguistic difference.
Hofstede cultural dimensions is use to compare the culture of four potential countries to the USA. As the chart shows above, the culture between United States, United Kingdom and Germany are slightly the same. But compare to the Asian countries, China and India, the culture of these countries are much difference in terms of power distance, individualism and long-term orientation. Therefore enter to the cultural similarity country, United Kingdom and Germany seems more suitable than China and India.
Besides the cultural