Internationalization in Culturally Dissimilar Markets: Analysis of Traditional and Modern Retailing Formats in Egypt

Abstract

Contrasting views on the influence of host country culture as a key determinant in foreign market selection and entry mode of U.S. retailers remains an area for discussion. This study identifies common trends in foreign retail environments to determine if culture is a significant factor in internationalization. Data were generated from observations of retail environments in Cairo, Egypt for three months. A Semantic Differential Scale and field notes were utilized to collect descriptions of traditional formats with informal retailing systems, and modern formats with formal retailing systems in Egypt compared to U.S. markets. Results show cultural differences inherent to traditional formats in Egypt, but no significant differences were found in modern formats compared to the U.S. Findings indicate host country culture is an insignificant factor in foreign market selection and entry mode in modern retailing formats, and that cultural differences can be managed with a strategic entry approach.