Cultural Adaptation in International Business: Domino's vs Subway

Cross-Cultural Challenges in International Business

Some of the pitfalls of cross-cultural interactions are obvious — the American "okay" sign can be offensive rather than optimistic in Brazil, and showing the soles of the feet is forbidden in Muslim cultures. But these cultural violations regarding body language are often more a source of embarrassment than genuine offence during intercultural encounters. Jared Wade (2004) suggests in his article "The Pitfalls of Cross-Cultural Business," published in Risk Management, that transgressing invisible value systems — such as the uniquely American emphasis on individualism — should be of greater concern when dealing with other cultures. However, the subtleties of cultural norms encompass far more than body language: what constitutes being "on time," the degree to which personal patronage and nepotism affect business dealings (what might be called corruption in some contexts is perfectly acceptable in high-context nations), and the role of women all touch upon profound value systems that shape every aspect of human life. Assumptions about food, body language, and polite conduct are profoundly revealing of deeper cultural values.

As noted in Robert Gibson's Wall Street Journal article on the same topic, business franchises must often overcome particularly entrenched cultural obstacles. Because the way franchises are accustomed to doing business is highly standardized, they must adapt their routines and formulaic products to local ways of doing business and local tastes in order to thrive. Sometimes these adaptations are fairly straightforward. In Aruba, Domino's "soon found that using motorcycles to deliver pizzas was too dangerous because of the island's strong winds." In the Philippines, store locations were at times chosen using feng shui, a Chinese art that positions buildings according to spiritual flows. And because many Icelanders stay up at all hours, the chain had to adapt to a different temporal schedule, shaped by the extreme patterns of light and day in that northern country (Gibson 2006).

Yet some challenges could not be overcome. Domino's faced a cultural resistance to the taste of its product in Italy. The chain's signature bold, sugary tomato sauce was rejected by Italian consumers, whose expectations for pizza were rooted in a fundamentally different culinary tradition.

Franchise Adaptation: Domino's Abroad

In contrast, the Subway franchise was able to make meaningful inroads in India. After navigating local bureaucracies, Subway successfully introduced customers to the concept of bread-based sandwiches, while the religious prohibition against eating beef observed by many Hindus required the chain to significantly expand its vegetarian menu. Practical obstacles like taste preferences can be difficult to predict in terms of how deeply entrenched they are — unlike the more straightforward challenge of learning to bow rather than shake hands on a business trip. Dealing with local customs around food and religion is also harder to fully address in a management seminar than advice about appropriate dress. Subway is perhaps the best example of how to positively adapt to local needs and tastes in international franchise expansion.

By contrast, Domino's as a product was to some degree constrained by the nature of being a chain pizza business. On one hand, it was flexible enough to accommodate some local needs — including daily rhythms of life, a belief in feng shui, and weather conditions that affected delivery logistics. But the Italian conception of pizza differs fundamentally from Domino's cheesy, sweet American approach to the food. There was no straightforward way for Domino's to become acceptable in that market, unless it had chosen to market its product explicitly as an American experience — as distinct from the Neapolitan original — rather than positioning itself as a cousin of a beloved local delicacy.

Subway's Successful Cultural Flexibility in India

Subway had considerably more flexibility as a chain with multiple sandwich offerings when constructing an India-specific menu. Because it offered a foreign product in the form of bread-based subs, it did not have to compete with deeply held local food identities — it simply needed to avoid offending local customs. Domino's, by contrast, was selling a product that Italians felt a direct and personal ownership over, making any deviation from local standards a liability rather than a novelty.

Domino's may have been able to adapt to the Italian market by positioning its product as "all-American pie" in urban centers where American fast food had already established inroads. After all, Domino's heavily promotes its Brooklyn-style pizza — not Neapolitan pizza — even within the United States. But simply advertising itself as a pizza company, particularly at a price point not significantly lower than local Italian offerings, proved ineffective. This strategy failed to account for local pride in the product, or Italian consumers' expectations for a different type of sauce, bread texture, and sauce-to-cheese ratio.