Terms Related to International Business - What is Glocalization?

McDonald's in India

Maharaja Mac
Maharaja Mac | Source

Glocalization - An Introduction

Glocalization can be defined as the adaptation of a product or service to the tastes and preferences of locals in foreign markets.


In the age of globalization, large American corporations like McDonalds and Disney expanded their operations to other regional markets outside of the United States. In doing so, these corporations found that the peoples of those foreign markets were not receptive to American products wrapped in American packaging. In fact, they ran into obstacles due to long-established "national habits, local brands, and distinctive regional tastes" (Satterlee, 2009, p. 5). In light of this situation, American corporations learned they had to adapt their products and services in order to be accepted by locals in foreign markets.


This hub answers the question: what is glocalization and how does it relate to international business?



KFC in China

Source

Glocalization - Think Globally, Act Locally

In the age of global expansion, large corporations such McDonalds, Starbucks, KFC, Tesco of the UK, Nokia of Finland came to realize that if they wanted to succeed in their expansions to foreign markets they had to think locally. This means that global business managers had to research the potential markets to gain a thorough understanding of the cultural norms of the dominate culture of each region of local market. (Casestudyinc.com, 2013). From their research cultural research, these organizations renamed their stores or added menu items that were appealing to the members of their host cultures; while at the same eliminating potentially offensive items or décor. The lessons of glocalization opened up greater opportunities for these corporations in terms of international trade.

Source

Adaptation in International Trade - Examples of Glocalization

McDonald's


McDonald's is perhaps the most often cited case of adaptation to local favorites in order to establish their restaurants in foreign markets. The global business leaders at McDonald' devised a strategy to seek out the preferences of local consumers and then set up operations and devise products and services accordingly. Julia Werdigier of the New York Times (2007) noted how McDonald's shifted its interior designs to appeal to consumers in Europe. They also produced menu items relevant to markets such as India where they offer a Maharaja Mac formulated to the preferences of Hindus who do not eat beef.


Coca-Cola

Coca-Cola has also taken up the mantel of localizing its operations in order to appeal to a wider audience in foreign markets. For instance, Coca-Cola has learned to incorporate their trademark design within cultural, aesthetically appealing marketing as can be observed on their various websites: such as: cocacola.co.za (South Africa), coca-cola.com.cn (China), coca-cola.de
(Germany). (Nahai, 2012).


KFC

Kentucky Fried Chicken also tailors its menus to local markets. Maggie Starvish (Harvard Business Review, 2011) noted KFC's explosive growth in China.


In doing so, Starvish highlighted the following key concepts that contributed to the recent success, including:

  • In China, KFC's strategy was to be part of the local community, not be seen as a foreign presence.
  • China division chairman and CEO Sam Su combined the best ideas from the US fast-food model and adapted them to serve the needs of the Chinese consumer.
  • Only a small number of menu items would be familiar to Western visitors—the Chinese KFC offerings include fried dough sticks, egg tarts, and foods tailored to the tastes of specific regions within the country.
  • To counter concerns about fast food and obesity, Su offered a healthier menu and supports exercise and youth events.


Thus, the key to successful expansion in international trade and foreign markets is to study the local culture and offer products and services that are relevant to the local consumers.

References

Satterlee, Brian. (2009). Cross Borders Commerce.

Casestudyinc. (2013). Globalization Examples - Think Globally aand Act Locally. Casestudyinc.com

Starvish, M. (2011). KFC's explosive growth in China. Harvard Business School - Working Knowledge. hbswk.hbs.edu/item/6704.html

Werdigier, J. (2007). To Woo Europeans, McDonald's Goes Upscale. New York Times.

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Comments 2 comments

Dennis AuBuchon profile image

Dennis AuBuchon 3 years ago

Thanks for sharing this information. I voted up and interesting. In the global economy of today many businesses if they want to compete throughout the world will need to adapt to the local culture. Adjustments by companies you identified helped to explain actions required in specific countries for American companies.


ecoggins profile image

ecoggins 3 years ago from Corona, California Author

Thank you Dennis, for kind, encouraging, and affirming words. I know some of these companies learned these lessons the hard way. My understanding is: Disney (mentioned but not highlighted) went through quite a learning curve in France and Hong Kong as well.

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