You are on page 1of 4

Question 1

a) What is meant by “global localization?” Is Kentucky Fried Chicken (KFC) a global
product? Explain.
"Global localization" can refer to a broad-reaching or world-wide (global) strategy for the
customization of materials to suit specific languages and locales (localization). Globalization is
becoming increasingly important for businesses all over the world. Not only is it important to
expand into new markets, but it is important to localize enough to be accepted while still keeping
your brand consistent worldwide. Corporations are beginning to see how difficult this balancing
act can be. Expanding into new countries can lead to enormous profits, but it comes at a much
higher risk. Glocalization is the concept of developing a product or service strategy that takes the
benefits of a global product platform and integrates it with the advantages of product
localization.
Just 10 years ago, it was widely believed that the future of global business lay in ever increasing
levels of standardization of products and processes. Business-schools taught future leaders to
‘globalize the international strategy and assess the speed of internationalization’. Countries
neighboring each other were presumed to assimilate each other’s cultures (Europe treated as a
single culture). Companies would develop a global concept that fit a global customer-base which
was converging, becoming homogeneous.
Even though this strategy has economic advantages and has worked for some companies – it
often backfires or hampers growth potential in many markets. Today, many companies are
learning that it pays to have a global product platform to reduce costs married with a local
customization of the products and processes to appeal to a cultural demographic. Globalized but
localized – glocalized. Global business is moving towards what has been called “mass
customization”. New technology will aid in the development, with new production process such
as additive manufacturing which will make mass customization truly economically viable.
Getting the feel for glocalization is now seen as an efficient approach to build brand image and a
way to generate long-term brand loyalty. As global competition grows fiercer, it’s not enough to
have a product that is at 75% of its full potential due to unsuccessful glocalization. KFC is a
great example of successful glocalization. While KFC retain its core Kentucky fried chicken

Europe. competitive tool. Moreover. in 650 cities. Russia. producing. sharply defined by slower growth in the developed economies of the United States. this is especially important if you are in the consumer goods industry. . with one new restaurant opened a day. Global companies face a radically altered business landscape following the recent financial crisis. Warren Lui. it has successfully localized its product portfolio (i. KFC has even penetrated smaller cities in the interior of China.. and promoting a company’s products in a worldwide market. Liu states that you need an understanding of China and the Chinese cultural context “so deep that it is intuitive. the influence of Confucianism.concept as a global product platform – in China. of love and hate about the West. most notably a slowdown in world economic growth.” to understand the Chinese peoples’ “mixed feelings. and Japan and much faster growth in Southeast Asia and the BRIC countries (Brazil. micromotors. to understand Chinese history. Buddhism and Taoism. and regional jets.000. Large businesses often have offices in the foreign countries they market to. b) A company’s global marketing strategy (GMS) is a crucial.” KFC’s menu contains many items tailored to the Chinese consumer palate and it has paid off – the number of KFCs in China has grown to over 3. Describe some of the global marketing strategies available to companies. and China). Rather. but with the expansion of the Internet. Many formidable rivals from rapidly developing economies (RDEs) are capitalizing on their low-cost position in these fastgrowing markets and assuming a leading role in some global markets from natural gas and iron ore to automotive forgings. Competing successfully in this challenging business environment requires business-tobusiness companies to meet the needs of both low-growth and high-growth markets while differentiating their offerings from foreign and local competitors. India.e. it includes the whole process of planning. one of the members of KFC’s management team in China outlines the importance of cultural knowledge and product localization in his book KFC in China: Secret Recipe for Success. a two-speed world economy is emerging. placing. even small companies can reach customers throughout the world. Give examples of companies that use the different strategies Global marketing is more than simply selling a product internationally. language. its menu).

and knowledge) in RDEs to achieve competitive advantage. talent. Microsoft.Successful companies are able to adapt their business models to new groups of target customers in RDEs and develop new ways to integrate these different business models to achieve synergies and share best practices within the firm.  increase access. Network coordination: integrating operations to capitalize on the strength of the company’s global network. and empowered them to develop their own strategies. organizations. General Electric created a local growth team model to create new offerings for customers in RDEs. assets. General Electric has delivered on its promise to create health-care innovations that would substantially lower costs. raw materials. Apart from enhancing global competitiveness. and improve quality. integrated strategies should incorporate the following elements:  Market access: driving sales growth by reaching new markets and targeting new market segments. For example. and Apple are transferring steps in their value chain—like R&D or manufacturing—in order to attract talented personnel and to enhance design and manufacturing capabilities. companies are leveraging their sourcing  efforts in RDEs to secure access and penetration in local markets. Likewise. network advantage is promoted by sharing successes around the world— taking  innovations developed in RDEs back to developed markets. For example. To achieve global leadership. rising to this challenge. Resource access: leveraging valuable resources (for example. resource advantages developed in different markets can be shared and diffused to other operating units around the world. and products. Local adaptation: developing and adapting products and services to satisfy the unique needs of RDE customers. . Many companies like General Electric. such as China and India. To unlock the potential.

[online] Available at: http://www. Global Marketing a decision-oriented approach.gala-global. [online] Available from:http://www. [online] Available at: http://www.universalconsensus. Acevedo. Localization [online] Available from: http://searchcio.com/2012/08/21/glocalization-global-productlocalization-strategy/ . Universalconsensus. L. What is Localization? | Globalization and Localization Association. (2015). Rouse. Holllensen.org/what-localization 5. 2012.ehow.com/way_5379387_product-standardization-strategy.org. M.techtarget. 3rd ed. S. Gala-global. Essex: Pearson Education Ltd.html 2. Glocalization: Global Product Localization Strategy | Universal Consensus.com. Product Standardization Strategy.com/definition/localization 4. 2005. 3.References 1. (2015). 2004.