A Restaurant in Australia

A Restaurant in Australia

The New Hampshire Business Review comments that Australia is a dynamic, advanced economy wholly integrated into world trade. The article adds that Australia has a modern and diversified economy, along with high gross domestic product per capita supporting a broad industrial base. The language and to a large extent, the cultural environment and business practices are similar to those in the United States. In addition, customer expectations concerning price, quality and service for industrial and consumer goods are similar to those in the U.S.A. (Doing Business in Australia and Doing Business in the Netherlands, 1996, 15).

W. Chan Kim and R.A. Mauborgne in Journal of Business Strategy suggest that multi-national companies must recognize and address six major barriers to market entry. The barriers are: the need for product differentiation, economies of scale enjoyed by existing local competitors, switching costs for customers as well as a reluctance to switch, local capital requirements, access to local distribution channels, and cost disadvantages to the multi-national company that are independent of the scale of the operation. Even a decision to acquire an existing company through a stock purchase may result in a backlash among local customers. American companies must always be cautious of anti-American sentiment or strong feelings of nationalism or bias on the basis of national origin (Kim, Mauborgne 33).

Brenda Sunoo in Workforce (1998) suggests that Americans doing business in Australia should not assume that they will not have to make significant adjustments just because the two countries share the same language and a belief in democracy. While Americans and Australians have many similarities, they also have numerous differences. Failure on the part of a company attempting to expand into Australia to make allowances for the differences between the two cultures would be a serious miscalculation and could place the fore…

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