Chicago Style Pizza in the Chzech Republic

Introduction

Steve Kafka is an American born citizen of Czech origin and a franchisor for Chicago Style Pizza. Steve has decided to open a franchise in the Czech Republic, a place where he has family and friends. Steve has visited the Czech Republic several times and speaks the language very fluently. Even though he has some basic knowledge about the Czech Republic, he still anticipates some difficulties at the new location in Prague. He knows his decision is not without risk but is ready to meet the challenge. Steve will have to conduct a great deal of research in order to succeed. This paper will cover some of the major cultural differences between the United States and Czech Republic and the risks associated with these differences. This paper will also analyze the comparative advantages in the Czech Republic and what if any, Steve can take advantage of. The use of Greet Hofstede’s five dimensional model of cultural dimensions and how they can be used to help Steve to evaluate the environment in the Czech Republic. This paper will conclude with an analysis of the cost structure and demand for Pizza in Prague.

Understanding The Cultural of the Czech Republic

Several differences exist in the cultures of the United States and Czech Republic. Religion in the Czech Republic was influenced by 4 decades of communist atheism and therefore, adherence is sometimes the result of heritage rather than actual belief. (CultureGrams, 2008) In fact, the Czech Republic is the least religious country in Europe. Spending time with the family is one of the highest priorities for the Czechs therefore, Czechs are less likely to be willing to spend time away from their family for increased recognition at work. (The Prague Post, 2008) Mothers and fathers both may receive several months paid leave when a child is born. Because of a shortage of affordable housing, young couples tend to live with their parents after marriage.

Czechs value education, cleverness, social standing, modesty and humor. Czechs are considered to be individualistic and may be stubborn when it comes to stating opinions or wishes. They emphasizes conformity and cooperation and hold community leaders in high esteem. To show respect Czechs use a person’s title and last name. Maintaining eye contact is also important to Czechs when in conversation.

When it comes to eating habits, Czechs eat three meals a day and on Sundays the main meal is lunch with just a snack for dinner. Plates are usually prepared in the kitchen and brought to the table, serving the head of the household first unless guests are present. Conversation is limited unless the head of the household speaks or guests are present. Czechs generally do not dine out often and during the day they eat at work. Foods like hot dogs and pizza are considered to be snacks and are quite popular on street corners and sidewalks.

Steve will face some major difficulties in opening a successful pizza franchise in the Czech Republic do to eating habits and the fact that pizza is considered a snack food. The fact that most business don’t stay open late and that Czechs don’t dine out much increases the risks involved. Choosing Prague for the location however, offers some advantages that will be needed. Prague is the capital city with a significant international population and mix of culture. Other restaurant chains, such as McDonalds, Kentucky Fried Chicken and Pizza Hut have already proven that a market does exist in Prague. (Andrea Fennesz-Berka, 2006) Steve will need to locate the pizzeria in proximity to an international community or perhaps a university for the greatest opportunity for success. In addition, Steve can market his business as a family oriented establishment and offer beer as well as soft drinks. He could offer specials for Sunday evening meals since this meal is typically considered a snack.

Comparative Advantages in the Czech Republic

The Czech Republic has a high intellectual capital, good language skills, geographic advantages, cultural proximity to Western Europe and the United States, modern telecommunication systems, first-class office premises and a growth-stimulating climate. The agricultural sector consists of wheat, hops, sugar beets, potatoes, onions and fruits, but overall imports of vegetables exceed exports. Actual comparative advantages are limited for Steve to take advantage of other than the fact that the Czech Republic is a rapidly developing country and getting a business established early will have its advantages over those that come later. (The official Web Site of the Czech Republic, 2008)

Hofstede’s Cultural Dimensions

Using Hofstede’s five dimensions model