Gene One
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Intro
Steve Kafka, an American of Czech origin and franchisor for Chicago Style Pizza, has decided to expand his business into the Czech Republic. Steve anticipates he will face some difficulties at the new location. This paper will define the major differences, and major business risks because of these differences between, the United States and the Czech Republic.
Cultural Differences
The culture in the Czech emphasizes traditional values and cooperation. The economy has transitioned from a planned to a free market economy after the split of Czechoslovakia in 1993. The workdays begin between 7am and 8am and end between 3pm and 4pm not like the long hours in the U.S. Most stores in the Czech dont stay open late and many people dont dine out very often. While in the United States most Americans are overweight because all they do is dine out. The Czech women usually prepare the meals and a healthier diet that is easier to prepare. The meals are usually eaten with utensils and not with their hands. Pizza and hotdogs are considered a snack food and can be found at local corner vendors.
Opening a pizzeria in the Czech Republic will be difficult because of the eating habits and because Pizza is considered a snack food. Because meals are usually prepared at home or eaten at work most businesses do not stay open late so there wont be much business for a pizzeria. But since Steve is opening this business in the capital and eating habits are trending towards dining out business may be slow at first and should grow. Steve can mitigate these risks by positioning his business as a family orientated business. Beer is consumed commonly so Steve can also serve this in his restaurant.
Comparative Advantages in the Czech
The Czech Republic grows most of its own wheat, sugar, potatoes, barley, rye, onions and fruit; however, it imports more vegetables that it exports. There may be an advantage in pizza dough and beer, but no other advantages are there. Steve cannot take advantage of any comparative advantages.
Trade Barriers
The Czech is a member of the European Union and a member of the World Trade Organization. This can limit the trade barriers that can affect Steves attempt to open a pizzeria in the Czech.
Assessment of the Demand of Pizza
To assess the demand of pizza at different prices, Steve would have to research any current restaurants selling pizza. He would survey the vendors that sell pizza on the street to determine their price and the demand for the product. Steve would have to analyze the cost of ingredients, labor, and overhead for the restaurant. Once all this data was concluded then