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.

Franchise Adaptation: Domino's Abroad

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.

Subway's Successful Cultural Flexibility in India

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.

Works Cited

Gibson, R. (2006). Foreign flavors: When going abroad, you should think of franchising as a cookie-cutter business; unless, of course, you want to succeed. Wall Street Journal, September 25, 2006: 8.

Wade, Jared. (2004). "The pitfalls of cross-cultural business." Risk Management, 51: 38–43.