Expansion Of An Internet CafÐ"© Business Into China

One of the quickest growing fields in our world today is the realm of technology. People at work want to be technologically advanced, and people want to bring the latest technology into their own homes. In the United States, most families have a computer with Internet access in their home, have access to the Internet at their jobs or schools, and have access to the Internet through various other avenues (e.g. libraries, community centers, or coffee shops).

In countries such as China, there are multitudes of people who do not have the financial means to purchase and maintain an Internet connected computer within their home. Despite the financial inequities, which do not allow some people to own their own computer, access to the Internet, is still sought after. To alleviate these needs, China has seen an influx of public-access Internet sites. The most popular of these is currently the Internet CafÐ"©.

The Internet CafÐ"©Ð²Ð‚™s of China provide a fee-based Internet access to anyone who enters. They also sell beverages, such as coffee and tea, to people while using the Internet. Considering this vastly popular recently emerging market, we have chosen to expand our current Internet CafÐ"© to China, where we hope to diversify our own workforce, and provide China with another venue to access the Internet in a creative and enjoyable setting.

There are approximately 1.3 billion people in China. Of China’s population, about 21% are under the age of 14, and 71% are between the ages of 15 and 64. The median age of the Chinese population is about 33 years of age. About 92% of the Chinese population is of the ethnicity Han; other ethnic minorities include the following: Zhuang, Manchu, Hui, Miao, Uyghur, and Yi. About 59% of China reports they are “non-religious”; the remainder of the Chinese population identify mainly with Confucianism, Taoism, and Buddhism. The main spoken language of China is Mandarin, however there are also known dialects of Wu, Yue, Minbei, Minnan, and others.

The demographic information of China will play a critical role in determining proper advertising and business set-up venues. It is important to consider the entire culture of a country when starting a business in said country.

Currently, we manage a chain of Internet Coffee shops throughout the United States. Our Internet CafÐ"©Ð²Ð‚™s allow people to come in and grab a beverage, pay for usage of the Internet, and/or both. We feel that even though business has been steadily increasing, and profits are up, we may be able to gain a more competitive and innovative edge if we were to expand to another market which is significantly different from our own. In some ways the Chinese market is very similar to the US market, however the Chinese culture differs to a great degree. We believe these differences will help us to discover innovative ways to promote, and expand our business both in the United States and in China.

Our main product of sale is usage of the Internet, and the environment that people receive in our cafÐ"©. We are primarily focused on this, and secondarily focused on the sale of beverages. In terms of beverage sales, we will focus on a variety of coffees and teas. Through market research we have determined that teas will likely be more popular by the average Chinese consumer, therefore we plan to focus more of our beverage expenditures on teas rather than coffees.

One significant consideration that will be undertaken prior to commencement of our Chinese Internet CafÐ"© is legal application to Chinese laws governing Internet CafÐ"©s. In the past few years, the Chinese government has been outwardly strict on mandating adherence to law governing Internet CafÐ"©s. For this reason, a multitude of cafes were shut down, therefore leaving a large gap between Chinese people who desire to use the Internet within Internet Cafes, and the availability of Internet Cafes.

Our Internet CafÐ"© is scheduled to open in Shanghai, China in April of 2008. At this time the ban on new Internet CafÐ"©s will be raised, and we plan to be one of the first new establishments. We would likely also need to hire a Chinese legal consultant to determine continued adherence to Chinese regulations governing our business. From initial research it appears that as a Chinese Internet CafÐ"©, we are required to track and report all Internet usage of consumers, as well as monitor and regulate the sites that are visited.

While expanding business to a vastly different market, such as China, may be an initial strain on business, we believe that the benefits will far outweigh the costs. That being said, we plan to push forth with the re-emerging Internet CafÐ"© market in China’s metropolitan areas, with anticipated great success.

Cultural Analysis of China: Key Cultural Values and Attitudes

In 1972, President Richard Nixon made an unprecedented visit to the People’s Republic of China. The basis of the visit was to begin negotiations with the Chinese Premier, in order to open political relations. In just thirty-five years, not only have political relations been sustained, but markets and trade with China have reached the point where, today, China is the third largest trading partner to the United States. By understanding the fundamental differences in cultures including the Chinese views regarding such things as cultural change, time orientation, acceptance of new technology, work and leisure, as well as significant traits and taboos of the Chinese culture, our coffee house/internet cafÐ"© will be in a better position to engage the competition (Foster, 2006).

Chinese Culture According to Hofstede’s Typology

Geert Hofstede analyzed data collected from IBM employees in several countries in order to understand cultural differences amongst the different countries. The result of this work has led to the development of four distinct dimensions of cultural differences. A fifth was later added. The resulting five cultural dimensions are not only useful in creating and understanding a particular country’s culture, but is also a useful tool in comparing cultures worldwide. Following is an overview of Hofstede’s four original dimensions along with the additional fifth dimension from ITIM International’s website, as well as a discussion of China’s score within these dimensions. It is also important to note where the United States falls in the typology, relative to China, in order to have a better understanding of an American internet cafÐ"©/coffee house trying to enter the Chinese market (Hofstede, 2007).

Power Distance is the first