- “General Marketing Advice” for Canadian companies who want to enter your assigned country.
Due to globalization’s strength, more and more companies decide to expand their business into foreign markets in today’s business world. However, this could be challenging. Succeeding in the current local market does not guarantee that the company will equally achieve in a new market using the same strategy. Before entering the foreign exchange, marketers must research to gain extensive information on the consumers and the market framework of that country to choose the proper market entry strategy and formulate marketing plans. For Canadian companies that wish to expand their business into Austria, we would like to provide them with the following marketing insights to help them prepare their expansion.
Cultural Insights
When going from the Canadian market to the Austrian market, the first and the most important thing to recognize is the cultural difference between these two groups of consumers. Companies must learn how to deal with that market’s particular culture since it fosters effective communication and understands what people value and how they behave. A country’s culture consists of language, religion, values, and so on. To begin with, Canadian companies who want to expand to Austria must be aware of the language differences. Austria is the only country other than German, where the official language is German, and 98% of the population speaks this language (xxx, 2013). However, in recent years, Austria children start learning English at school from the age of seven (The Local, 2014). Although younger generations are proficient in English, those who are older (65 years plus), representing approximately 20% of the population (CIA The World Factbook, 2020), don’t master it. Therefore, companies should prioritize using German in their product advertising to reach the maximum number of customers. To overcome the language barrier, Canadian companies need to hire specialists to design their advertisements to ensure that their message is appropriate and understandable to Austrians.
International companies will often hire employees from a foreign country to deal with local activities while sending managers from the home country to lead and provide direction to them. In this case, these managers must respect the “business culture” of that country to work well with local employees. Compared to Canada, Austria has a mainly hierarchical business culture, and there is a somewhat old-fashioned sense of politeness and courtesy (World Business Culture, n.d.). Senior managers hold most of the power within an organization and are responsible for making decisions. Not like in Canada, Austrian managers are expected to make decisions without consulting employee opinions. Employees are expected to follow the instructions provided by their managers. In return, these instructions must be specific and direct (Expat, Arrival, n.d.). Canadian companies must take into account the difference in the business culture when selecting managers to send abroad. Managers who are chosen must be competent and experts in their field to make the right decisions.
- Critical policy responses implemented during COVID-19
COVID-19 was reported to have spread to Austria on February 25, 2020, when two people returned from Italy and tested positive. The government’s initial response centered on travel restrictions and self-quarantine for people with symptoms, moving to bans on large public gatherings, and incorporating online schooling. A nationwide lockdown was imposed in mid-March, which lasted until the economy gradually began reopening in mid-April.[1] The reopening process runs through to the end of June. Austria has implemented policy responses during the covid 19 pandemics to help people, small businesses, and the economy.
Support Fund for Small Businesses
“The primary goal from the beginning was to ensure people’s health, save jobs, and make sure that the location came through the crisis as well as possible so that we could start again as quickly as possible. For this purpose, we have put a 38 billion protective shield over Austria already working,” said Finance Minister Gernot Blümel at the press conference noted on securing the location and jobs. The hardship fund has already begun. People can apply for funding in phase 1 to 1,000 euros, and in stage 2 up to 6,000 euros.
In addition to this emergency assistance, the Corona Assistance Fund has 15 billion euros to help all businesses that have significant drops in revenue. Help can be received from the Corona Support Fund as of April 08, 2020.[2] Depending on how affected the business enterprise is, a mortgage up to a quarterly turnover can be implemented. Part of this loan then does not need to be repaid, namely up to 75% of the fixed charges and goods that have become worthless.
The Corona Support Fund has two instruments: one is the guarantee instrument of a republic to secure working capital loans, representing 90 percent of the loan value. The term is up to 5 years, which can be extended up to 5 years. The second method is the subsidy for businesses with profits falling by at least 40%.[3] This grant is the part for which the loan applied for does not have to be paid back anymore. The fixed costs are also replaced, depending on the impact, to return the damaged goods by 25-75 percent or not repayable.[4]Fixed costs include rent, electricity, gas, interest, and perishable and seasonal goods, which, due to the corona crisis, lost at least 50 percent of their value.
The COVID-19 pandemic has introduced confusion and fear in all Canada regions for small businesses and their employees. Such companies are at the heart of communities around the country and are a source of local job growth. Small companies are the strength of Canada’s economy, which is why several practical and measurable steps have been placed in place by the Government of Canada to help them maintain their workers, pay rent, and access capital to cover costs.[5] Building on these steps, the new Regional Relief and Recovery Fund (RRRF) are spending approximately $962 million to support more companies and organizations in manufacturing, telecommunications, tourism, and other essential industries to the regions and local economies.
While some businesses are struggling in Austria, other companies are thriving.[6] This refers to a range of Internet businesses, such as online entertainment, food supply, online shopping, and online education. The COVID-19 outbreak in many industries is likely to trigger bankruptcy for many well-known companies, as customers remain at home, and economies are shut down. Other sectors that are doing well are those related to healthcare and medication, as well as herbs and vitamins. The COVID-19 outbreak is a unique opportunity to explore how markets are created and how they disappear within a minimal period.
- Opportunity Assessment for the specific product category (or industry) after COVID 19 pandemic
During the COVID 19 crisis, technological approaches have been much appreciated by many industries and businesses. Most of the sectors currently thriving in Austria are those using technical means to reach the consumers either while marketing or while delivering services and commodities[7]. On that note, an ecommerce business offering a variety of products including food products, electronic appliances, home-based office equipment, and other products would be profoundly appreciated in Austria[8]. A survey conducted a collaboration of researchers using the IIASA macroeconomic simulation model that prospects that businesses’ probabilities to return to the usual trend may take up to three years after the COVID 19 pandemic. The recovery after the abrupt economic downturn may take time. Therefore, only the industries that are well equipped with technological approaches to comply with the set policy like social distancing and abolition of social gatherings can comfortably survive the crisis[9]. Therefore, Canadian investors should consider setting up businesses in Austria that are technologically driven to ensure that they reach the consumers conveniently while attracting a large number of the consumer population to the market[10].
Specifically, foreign investors to Austria should focus on the food industry following that the Austrian government has an initiative for food security following that the sector has been adversely affected by the onset of COVID 19 crisis[11]. In this sector, it would be prominent for industries to focus on raw foods following that the fast-food industry is not currently thriving due to the COVID 19 control measures. Therefore, a foreign investor to Austria can identify some of the most treasured food products, including the traditional ones like the Tafelspitz. Providing some of these foods while using online platforms for marketing and interacting with customers is beneficial to foreign investors. As depicted earlier in the context, the employment system in Austria is hierarchical. Therefore, foreign investors should focus on implementing strategies that would be directly instructive to the employees and promote productivity.
Many Austrians have bought the internet culture due to its convenience and ease of use. Therefore, using internet-based podiums for marketing and reaching consumers is widely acceptable in Austria[12]. Furthermore, Austrians often appreciate new food products, especially from foreign countries. Therefore, a Canadian investor can consider offering a wider variety of food staff in Austria while focusing on those commonly accepted in the region. Furthermore, a large population of the Austrians is non-vegetarians. Therefore, a foreign investor in the food industry can focus on varieties of meat products, including mutton and fish, due to their high popularity in the region[13]. Therefore, focusing on organic products is widely accepted in Austria, making it a cultural opportunity for foreign investors in that region.
However, most Austrians and generally the government of Austria do not accept foods labeled as bio-tech due to their compound affiliation to organic products. Consequently, a foreign investor to the region is extensively restricted to offer some of these products since the Austrian’s culture do no easily accept the consumption of such products. Therefore, the cultural problem that can affect Austria’s food industry is the provision of biologically and technologically modified products in that region.
Bibliography
Austria. (2013, October 01October 01). Retrieved from
https://businessculture.org/western-europe/business-culture-in-austria/
Entering the Market in Austria. (n.d.). Retrieved from
https://www.startupoverseas.co.uk/expanding-a-business-in-austria/entering-the-market.h
tml
Moshammer, H., Poteser, M., Lemmerer, K., Wallner, P., & Hutter, H. (2020). Time Course of COVID-19 Cases in Austria. International Journal of Environmental Research and Public Health, 17(9). https://doi.org/10.3390/ijerph17093270
Anonymous. (2020). COVID-19 solidarity fund. World Health Organization. Bulletin of the World Health Organization, 98(4), 235–235. http://search.proquest.com/docview/2386941204/
Hanns Moshammer, Michael Poteser, Kathrin Lemmerer, Peter Wallner, & Hans-Peter Hutter. (2020). Time Course of COVID-19 Cases in Austria. International Journal of Environmental Research and Public Health, 17(9). https://doi.org/10.3390/ijerph17093270
Ell, K., Foley, B., & Moin, D. (2020). COVID-19 Retail Store Closures. WWD, 8–11. http://search.proquest.com/docview/2394936357/
FINCA Canada Launches Emergency Fund in Response to the COVID-19 Pandemic. (2020). Medical Letter on the CDC & FDA.
Donthu, N., & Gustafsson, A. (2020). Effects of COVID-19 on business and research. Journal of Business Research, 117, 284–289. https://doi.org/10.1016/j.jbusres.2020.06.008
[1] Moshammer, H., Poteser, M., Lemmerer, K., Wallner, P., & Hutter, H. (2020). Time Course of COVID-19 Cases in Austria. International Journal of Environmental Research and Public Health, 17(9). https://doi.org/10.3390/ijerph17093270
[2] Anonymous. (2020). COVID-19 solidarity fund. World Health Organization. Bulletin of the World Health Organization, 98(4), 235–235. http://search.proquest.com/docview/2386941204/
[3] Hanns Moshammer, Michael Poteser, Kathrin Lemmerer, Peter Wallner, & Hans-Peter Hutter. (2020). Time Course of COVID-19 Cases in Austria. International Journal of Environmental Research and Public Health, 17(9). https://doi.org/10.3390/ijerph17093270
[4] Ell, K., Foley, B., & Moin, D. (2020). COVID-19 Retail Store Closures. WWD, 8–11. http://search.proquest.com/docview/2394936357/
[5] FINCA Canada Launches Emergency Fund in Response to the COVID-19 Pandemic. (2020). Medical Letter on the CDC & FDA.
[6] Donthu, N., & Gustafsson, A. (2020). Effects of COVID-19 on marketing and research. Journal of Business Research, 117, 284–289. https://doi.org/10.1016/j.jbusres.2020.06.008
[7] Donthu, N., & Gustafsson, A. (2020). Effects of COVID-19 on business and research. Journal of Business Research, 117, 284–289. https://doi.org/10.1016/j.jbusres.2020.06.008
[8]Hanns Moshammer, Michael Poteser, Kathrin Lemmerer, Peter Wallner, & Hans-Peter Hutter. (2020). Time Course of COVID-19 Cases in Austria. International Journal of Environmental Research and Public Health, 17(9). https://doi.org/10.3390/ijerph17093270
[11] Austria. (2013, October 01). Retrieved from https://businessculture.org/western-europe/business-culture-in-austria/
[12] Hanns Moshammer, Michael Poteser, Kathrin Lemmerer, Peter Wallner, & Hans-Peter Hutter. (2020). Time Course of COVID-19 Cases in Austria. International Journal of Environmental Research and Public Health, 17(9). https://doi.org/10.3390/ijerph17093270
[13] Hanns Moshammer, Michael Poteser, Kathrin Lemmerer, Peter Wallner, & Hans-Peter Hutter. (2020). Time Course of COVID-19 Cases in Austria. International Journal of Environmental Research and Public Health, 17(9). https://doi.org/10.3390/ijerph17093270