glocalization

Welcome In The Era Of Glocalization

Glocalization is a portmanteau of the words “globalization” and “localization.” It is a concept that describes a globally developed and distributed product or service that is also adjusted to be suitable for sale in the local market. With the rise of the digital economy, brands now can go global by building a local footprint.

Understanding glocalization

Fundamentally, glocalization is the adaptation of products and services to meet a range of global consumer needs – according to various influences in their local environment. 

The concept was popularized by sociologist Roland Robertson who himself borrowed the concept from Japanese economists.

An often-quoted example of glocalization at work can be seen in car manufacturers. Many of Ford’s left-hand drive American cars, for example, had to be adapted to certain right-hand-drive markets like Australia and the United Kingdom.

During its expansion into France, fast-food giant McDonalds dropped its Ronald McDonald mascot with the more celebrated French cartoon character Asterix. 

Coca-Cola also faced significant cultural and geopolitical impediments when they brought their brand to China in 1978. Faced with strong anti-American imperialist sentiment and a consumer base with a preference for healthier drinks, the company was initially unsuccessful.

Eventually, Coca-Cola was able to win favor in China through an aggressive marketing strategy and the lobbying of Chinese government officials. Then, with government support, Chinese citizens deemed it culturally acceptable to consume the beverage and Coca-Cola became a sensation.

Advantages and disadvantages of glocalization

Advantages

  • Global expansion. Glocalization is an effective way for businesses to enjoy high and sustained growth in a variety of cultural settings. Multinational companies, often disliked by consumers, can earn their trust by adapting their products to the needs of the market they intend to enter.
  • Economic benefits. In most cases, glocalization brings foreign revenue into countries and provides employment opportunities for citizens. Businesses themselves are also able to enjoy cost savings through economies of scale across large production and distribution networks.
  • Competitive advantage. Businesses who successfully research emerging markets are often the first to enter them. This increases the chance of gaining an insurmountable competitive advantage.

Disadvantages

  • Resource intensive – glocalization is not for the faint-hearted, requiring a large upfront investment of time and capital. 
  • High risk. Despite doing their due diligence, businesses engaging in glocalization can fail to establish a presence in new countries. Often, a company will release a product that is simply not profitable. 
  • In some cases, a poor understanding of the local culture with a successful product still leads to failure. For example, Walmart had to close its German supermarket operations because of an emphasis on warm and friendly customer service. This level of service was not culturally appropriate for German consumers, and many stopped shopping at Walmart as a result.
  • Negative consumer sentiment. Irrespective of whether a business is successful at glocalization, there will always be consumers with an anti-globalization stance who actively avoid buying from globalized companies.

Key takeaways

  • In the context of marketing, glocalization is the creation of products and services for a global market while adapting them for country-specific cultures, regulations, norms, or practices. 
  • Glocalization is a risky and resource-intensive strategy – but the rewards of successful global expansion are significant.
  • Glocalization has the potential to fail if due diligence on cultural and social impediments to success are not identified and managed accordingly.

Other business tools and frameworks

FourWeekMBA Business Model Framework

business-model
A business model is a framework for finding a systematic way to unlock long-term value for an organization while delivering value to customers and capturing value through monetization strategies. A business model is a holistic framework to understand, design, and test your business assumptions in the marketplace.

Ansoff Matrix

ansoff-matrix
You can use the Ansoff Matrix as a strategic framework to understand what growth strategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growth strategy can be derived by whether the market is new or existing, and the product is new or existing.

Growth Matrix

growth-strategies
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling the whole new problems for new customers (reinvent mode).

Speed-Reversibility Matrix

decision-making-matrix

One-Page Business Plan

one-page-business-plan
A one-page business plan is a simple tool to clear your mind. It focuses on three questions: What core problem am I solving? Who are my potential key customers? Where do I find them? It helps define the problem, profile the key customer, and find the key distribution channel.

AARRR Funnel 

pirate-metrics
Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables us to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.

SWOT Analysis 

A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

PESTEL Analysis 

pestel-analysis
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Comparables Analysis 

comparable-company-analysis
A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

Porter’s Five Forces 

porter-five-forces
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces

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