by Mia Hill

Created on: April 03, 2010   Last Updated: April 04, 2010

Good business etiquette is the cornerstone of success when engaging in cross-border trading. The laws that regulate the practices of international trade will vary from one country to the next. Compliance with these trade regulations is a principal aspect of the international business. It may be difficult for managers to thoroughly understand the trade laws of the foreign countries in which they are seeking to do business. An effective way to overcome this obstacle is to enter into a joint venture with a business that already has a presence in that foreign market.  For example, in 2004 the Italian fashion designer Giorgio Armani in Milan, Italy and the Chinese Management Company Panalpina Group located in Shanghai, China entered into a joint venture in order to expand Armani products into China. This collaboration in which “Giorgio Armani relied on Panalpina’s logistics expertise for the opening of his new flagship store in Shanghai, China,” (3) has resulted in a successful international business venture for Armani. Other cross-border agreements exist between the Armani Fashion House and retailers in London, Great Britain and New York, United States. 

Another important aspect of international business etiquette is the need to understand the differences in foreign cultures.  These cultural differences are typically more complex in an international environment than the differences a company will encounter in its domestic market. A demonstration of cultural differences can be seen in McDonald’s restaurant menus in India in comparison to the McDonald’s menus in France. The word burger implies beef in France, but McDonald’s India serves no beef because India “is the only country in the world for sure that does not offer beef at all,” (1) and for this reason the burgers in India contain no beef. Before McDonald’s could sell its products in the international marketplace, the company has to modify its menus to comply with the many different customs in the foreign countries where it operates.

Companies will often use marketing tools such as the PEST analysis to pretest the social and political landscapes of foreign markets in order to determine the proper business etiquette requirements for that country. One of the factors that can be forecast using a PEST analysis is the price sensitivity of the products. There are often requirements for multilingual documentation for products that are traded internationally,

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