The objective of this paper is to inform and sensitise the reader in terms of doing sales business in Russia. The reader shall understand the challenges and opportunities the Russian market has to offer as well as the meaningfulness of regarding the cultural aspects in doing business.
Belonging to the rising BRIC states Russia witnessed huge invests of foreign countries within the last years. This does not surprise because this country has enormous potentials: Primary materials, labour force, a large and growing demand of consuming and a great demand of infrastructure and modern industry. Throughout western countries Germany has an advantage in doing business in Russia. Due to history and the geographical situation Germany is traditionally a bit closer to it and there are still people speaking Russian. Anyway some companies fail on the Russian market. The cause of this is often the wrong mindset: A takeover of concepts and approaches from known markets to a new country especially to Russia is very likely to fail.
It is a matter of common knowledge that business strategy is based and adapted from military. Instead of the opponent there is the business partner. Fight is the competition on the market for customers. Thus the author refers to a famous quote describing the intention of the current paper. Sun Tzu, the well-known general, strategist and philosopher of ancient China announced: “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.”
The author applies the following methodology: In the first part the development of the Russian market within the last years is stated. Risks and opportunities are evaluated as a requirement to elaborate the possibilities how to do sales business in Russia within the following part. Each of the two parts are supported by a current case example of German Companies which entered the Russian market. Thereafter the focus is set on cultural aspects. The author approaches the topic by using cultural dimensions of the scientists Geert Hofstede and Edward T. Hall. In the last chapter the gathered knowledge is transformed and concluded to recommendations for doing sales business in Russia.
Table of Contents
1 Introduction
2 Main Part
2.1 The Russian Market
2.1.1 The Russian Economy
2.1.2 The Trading Market
2.2 Opportunities in Doing Sales in Russia
2.3 Understanding the Russians by Understanding Their Culture
2.4 Recommendations for Doing Business in Russia
3 Results and Prospects
4 Conclusion
Objectives and Topics
The objective of this paper is to inform and sensitize the reader regarding the challenges and opportunities of conducting sales business in the Russian market, while emphasizing the critical role of intercultural competence and cultural understanding for business success.
- Analysis of the Russian economic environment and market developments.
- Evaluation of sales opportunities, distribution structures, and market entry strategies.
- Application of cultural dimension models (Hofstede and Hall) to understand Russian business behavior.
- Strategic recommendations for marketing, negotiation, and personnel management in Russia.
Excerpt from the Book
2.3 Understanding the Russians by Understanding Their Culture
The following chapter will analyse the culture of Russian people in order to understand the cultural influence on customer and business behaviour in Russia. Culture is a thing that cannot be defined within some sentences. Culture has so many shades and no clear borders due to different social, economic, political, historical and religious developments, that there is no truth. To handle that topic models and simplifications have to be used. M. Kutschker and S. Schmied described culture as the sum of basic assumption, values, norms, attitudes and beliefs of a social unit. They express themselves in a variety of artefacts, modes of behaviour and as an answer of the variety of challenges to which the social unit is confronted to. Visual elements of culture are clothing, symbols and architecture, which are material and language, customs and habits, which are immaterial. But like an iceberg culture is much more than the visible. Thereto belong values, attitudes, social structures, conventions and stamps of perception. According to D. Luna and S. Gupta values influence the consumer habits the most. On the Russian territory there are many ethnic groups, religions, subcultures, languages and about 190 nationalities. Historically and politically they are united, but partly there are big differences within their values and lifestyles. But in the following the term Russian culture is used, which shall describe the lowest common denominator.
To describe the values of Russian culture the cultural dimensions developed by Geert Hofstede will be used. Hofstede is a Dutch professor of international management and organisational anthropology. For developing his cultural dimensions he did the most comprehensive study in the area of comparing cultures and management research ever. The four dimensions are: power distance, individualism, masculinity and uncertainty avoidance. The dimensions are measured in indices from 0 to 100, meaning 0 the lowest and 100 the highest characteristic.
Summary of Chapters
1 Introduction: This chapter introduces the potential of the Russian market and defines the objective of providing guidance for German companies to avoid failure through improper strategy application.
2 Main Part: This section details the economic landscape, evaluates specific sales opportunities, analyzes cultural dimensions using established models, and provides practical recommendations for business operations in Russia.
3 Results and Prospects: This chapter synthesizes findings, stressing that commercial success in Russia requires more than pure business metrics; it demands deep cultural empathy and flexibility.
4 Conclusion: The conclusion reaffirms the necessity of intercultural competence as a foundation for navigating the challenges of the Russian market.
Keywords
Russia, Sales Business, Market Entry, International Strategy, Cultural Dimensions, Geert Hofstede, Edward T. Hall, Market Analysis, Consumer Behavior, Distribution Channels, Business Negotiations, Human Resource Management, Metro Group, Luxury Goods, Intercultural Competence
Frequently Asked Questions
What is the fundamental focus of this paper?
The paper focuses on the requirements and strategic considerations for foreign companies, particularly those from Germany, to successfully enter and operate within the Russian sales market.
What are the central thematic fields covered?
The core themes include the analysis of the Russian economic environment, the complexities of the legal and distribution systems, and the application of cultural theory to business practice.
What is the primary objective of this study?
The goal is to inform and sensitize potential market entrants to the specific risks and opportunities in Russia, emphasizing that a failure to adapt to local culture is a leading cause of business failure.
Which scientific methods are employed?
The author uses secondary research, analyzing economic data and trade reports, alongside established cultural dimension theories developed by Geert Hofstede and Edward T. Hall to evaluate business behavior.
What core topics are addressed in the main part?
The main part covers the Russian economy, the retail landscape (including a case study on Metro Group), distribution strategies, and detailed recommendations for marketing, negotiation, and personnel management.
Which keywords characterize this work?
Key terms include Russia, Market Entry, Cultural Dimensions, Sales Business, and Intercultural Competence.
Why is the Russian market considered complex for foreign companies?
Complexity arises from a mix of unstable economic growth, significant bureaucracy, corruption, challenging customs laws, and a unique cultural fabric that dictates non-Western approaches to negotiation and time perception.
How does the author suggest approaching negotiations in Russia?
The author advises salesmen to be patient, acknowledge the strict hierarchy (addressing decision-makers), and maintain professionalism even when facing emotional outbursts, as these are not uncommon in the Russian business context.
What role do trade fairs play in the Russian market?
Trade fairs are presented as the essential platform for detailed market research, networking, and building relationships, which are considered fundamental in the relationship-oriented Russian business culture.
What is the "Iceberg Model" in the context of this paper?
The author uses the iceberg analogy to illustrate that visible cultural elements like clothing and language are only the tip, while the most influential factors—values, attitudes, and social conventions—remain hidden and must be proactively studied to avoid misunderstandings.
- Quote paper
- Alexander Liebschner (Author), 2014, Sales Business in Russia. An Analysis of the Russian Market and the Russian Culture, Munich, GRIN Verlag, https://www.grin.com/document/344565
