Why is it important to understand the social context when doing business abroad?

Social context is the set of elements, material and immaterial, that shape life in society and the culture of a given region.

In Brazil, the instability of several social factors is a constant topic of debate among organizations. It is not by chance that, of companies that aim to internationalize, 61.3% are motivated by protection against domestic market volatility.

Want to ensure your organization’s success and prevent it from running into a problem for not observing the social elements? In this article, we list some aspects that prove the importance of studying the context of the country. Be sure to check it out!

Understand if the country is experiencing a political crisis

Especially during 2016, investment in Brazilian companies was reduced due to several events that triggered a period of intense political and economic instability.

The withdrawal of resources happens because the social context directly interferes in the success of the business and, therefore, in its income. During the aforementioned year, a 10.2% drop in investment was estimated, triggering a 3.6% retraction in the country’s economy.

If you intend to internationalize, this example demonstrates the importance of researching every recent event in the country you want to migrate to. It is also essential to check the short-term and long-term market expectations of the place.

Avoid making a gaffe or act offensive to the culture

Regardless of the country in which you want to open a business, it is interesting to look for information about the habits of the region. In certain cultures, there are acts that can represent disrespect, causing a bad impression on the consumer public.

In a predominantly Muslim country, for example, showing up with a bottle of wine at a dinner party you’ve been invited to can sound offensive, ending the business meeting. This is due to the fact that most practitioners of this religion do not ingest alcoholic substances.

Analyze if the market supports the product offered

Several external factors can interfere in the planning established to internationalize the companyThe country’s per capita incomelocal supply and demand and the cost of manufacturing the product are just some of the obstacles that can hamper the institution’s development abroad.

An industry can succumb over time if consolidated competition manages to produce the same good at a lower cost, for example.

For this reason, it is important to carry out an extensive and anticipated study of the market condition in the region. Only in this way will it be possible to see if he is able to receive your product.

Many organizations have been looking to establish trade abroad looking for a new growth opportunity. However, for internationalization to bring a good result and meet expectations, it is important to understand that some elements must be observed.

The detailed study of the social context is the basis for the company’s success. Only through it will it be possible to understand the risks and challenges that the institution will face, in order to prepare an efficient plan.

About Hassan Hassan

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