Opening of Rohan Stores in Iran

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Hence, by investing in Iran, the business will be entering a market with a completely different culture. Adizadeh (2010) states that despite the significant role that franchising has played in all economies. researchers have paid little attention to it in the Iranian market. The author further adds that there are very many barriers facing Iranian firms with considerations of adopting franchising. The barriers include legal, cultural, political, tariff, and economic. However, managers of already existing franchises in Iran affirm cultural barriers as one of the most important hindrances facing franchisors and franchisees in the country (Adizadeh, 2010). Leung et al. (2005) noted that the source of cultural barriers is the variations in cultural variables such as religion, material culture, language, social organization, popular culture, and aesthetics between the resident and foreign nations. The authors continue to point out that an increase in such dissimilarities translates to larger cultural distances between the foreign and home countries. Consequently, an increase in the cultural distances creates challenges in the process of transferring the investment from the resident country. However, Ewah and Ekeng (2009) identify an increase in the levels of saturation and competition in the markets of developed countries. For this reason, Rohan’s most viable solution would be developing strategies to deal with the cultural differences and, subsequently, invest in Iran as an emerging market economy.

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