Photo by Greg Rosenke on Unsplash
January 25, 2024
Will ‘Glocalization’ Put an End to Globalization?
Last week’s World Economic Forum annual meeting in Davos wrapped up with many observers feeling cautiously optimistic but cautious, nonetheless. Global economies outperformed the dour predictions of a year ago, managing to avoid a recession despite sharp interest rate hikes.
On the flip side, central banks worldwide are caught in a precarious balancing act. They must decide between drastically cutting interest rates and potentially reintroducing inflation or keeping them high and possibly pushing economies into recession. As a result, “global capitalism is morphing into something different, [and] has pointed to a new paradigm: some call it de-globalization, others call it — perhaps more accurately — ‘glocalization.’”
Globalization vs. Glocalization
Globalization and glocalization are economic strategies that focus on spreading products, ideas, or services across the globe. Even with all of its cons, Globalization is still very much alive.
However, while living standards have been squeezed and productivity has been low in recent years, capitalism is evolving. After weathering challenges since 2020, it’s transitioning toward glocalization, which, according to VeraContent, “is when global products or services are adapted to fit the customs, laws or preferences of a local market. The word fuses the concepts of ‘globalization’ and ‘localization.’”
Globalization involves a uniform distribution of goods and services internationally without considering regional specificities. It fosters interconnectedness among countries, integrating economic, political, and cultural systems globally, but may cause a loss of local traditions due to homogenization.
On the other hand, glocalization adapts these global strategies to suit the unique needs and preferences of local markets and cultures, valuing cultural diversity and accommodating local traditions. It aims to balance the benefits of globalization while minimizing its negative impacts.
Retail Brands Taking Advantage of Glocalization
Many companies are currently using glocalization strategies when entering new markets across the globe. Here are a few examples:
Disney: Culture Masters
The Walt Disney Company exemplifies successful glocalization. The company, known for theme parks, films, merchandise, and the Disney+ streaming app, has smartly tailored its products to align with local customs and traditions. For instance, each Disney park features a castle unique to its region, and the merchandise, food, drinks, and events honor local culture.
Disney’s approach to glocalization has been particularly noticeable in its theme parks, such as the one in Shanghai. Adopting the slogan “Authentically Disney, Distinctly Chinese,” the park prioritized local traditions and family experiences, which significantly contributed to its success.
McDonald’s: Master of Glocalization
McDonald’s serves 69 million customers across the world. It’s renowned for its successful glocalization strategy, skillfully adapting its menu to align with local cultures and dietary habits. With a broad base in over 100 countries, the California-originated chain has adjusted its offerings from kosher Big Macs in Israel and chicken and vegetarian options in India to McArabia Chicken in Arab countries.
Even in Japan, McDonald’s has intrigued its customers with unique creations like black burgers with charcoal bamboo buns and squid ink burgers. In doing so, it has evolved from a humble burger joint to a global fast-food empire by providing locally appealing products at affordable prices. For instance, it serves Veg Pizza McPuff in India, Samurai Pork Burger in Thailand, Mozzarella Dippers in the U.K., and Poutine in Canada, among other region-specific delicacies.
Furthermore, the fast-food chain switched its traditional red backdrop for a deep hunter green in Europe to promote a more eco-friendly image. Finally, more upscale locations have begun to pop up around the world.
Whirlpool: Customized Appliances for Global Markets
Whirlpool, a leading home appliances manufacturer, has successfully glocalized its products for different markets. In India, it introduced washing machines with specially designed agitators to help wash saris. For the Asian market, Whirlpool offers refrigerators in bright colors like red and blue, as they often serve as a status symbol in living rooms.
Coca-Cola: Flavorful Glocalization
Known for its global value, Coca-Cola uses a strategy based on product diversification and marketing. The company offers unique products tailored to various regions. For example, Mexican consumers enjoy Barrilitos Aguas Frescas, while in France, Coca-Cola Light Santa is a favorite. The company serves Coca-Cola Raspberry in New Zealand, Citra in Japan, Coca-Cola Lime in Romania, and Coca-Cola Ginger in both Australia and New Zealand.
Coca-Cola’s glocalization strategy in the Philippines involved releasing a tailored advertisement called “Pearl of the Orient.” This film showcased Filipino traditions and culture, pairing them with the image of locals enjoying bottles of Coke, portraying it as a wholesome part of their lifestyle.
Starbucks: Catering to Indian Tastes
Starbucks in India offers a menu devoid of beef or pork, with a focus on vegetarian options to respect the dietary preferences of its customers. The stores even have separate ovens and counters for vegetarian and non-vegetarian dishes.
MTV: Fine-Tuning Content for Global Audiences
MTV learned the importance of glocalization when it launched in the U.K. After switching to U.K.-focused music and hiring local employees, MTV was able to see better ratings. The same strategy was implemented in other countries like India, China, South Korea, and Japan.
Mars: Two Names, One Chocolate
Mars offers the same brand of chocolate under different names: “Dove” in the U.S. and “Galaxy” in the U.K. This glocalization strategy allowed the brand to explore different flavors in the U.S. without affecting its universal brand.
The concept of “glocalization” represents a mixed economic model that prioritizes short supply chains, domestic manufacturing, and strategic government involvement over low costs. It aims to make essential goods such as vaccines, PPE, computer chips, and energy easily accessible. Understandably, “it can be a challenging idea for some businesses to grasp as they look at the big picture and assume mass production is the answer. Often, products or services produced in one country may not fit the local population’s desires in another nation,” per WallStreetMojo.
Combined with AI, “glocalization” could pave the way for a more durable and ecologically sustainable global economy, one that has been under tremendous strain from the pandemic and current social and political issues.
Discussion Questions
In light of the shift from globalization to glocalization, what strategies can companies adopt to successfully tailor their products or services to local markets while retaining a global competitive edge?
As advancements in artificial intelligence continue, how might this technology influence the future of glocalization? Moreover, what could be the potential impacts on the resilience and sustainability of the global economy?
Considering the balance between cost-efficient mass production and customer-focused glocalization, how can businesses reconcile these contrasting aspects to guarantee both economic viability and appeal to customers?
Poll
Loading …BrainTrust
Mohamed Amer, PhD
CEO & Strategic Board Advisor, Strategy Doctor
Ananda Chakravarty
Vice President, Research at IDC
David Biernbaum
Founder & President, David Biernbaum & Associates LLC
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No, glocalization will not replace globalization. What’s emerging is a hybrid model which still has elements of globalization but is also a bit less connected as some of the underpinnings of globalization are undone through protectionism, technology, supply chain disruptions, and other factors. For retailers this means flexibility and adaptability are key words, as many leaned during the pandemic. I also think that costs, which were brought down by the early phases of globalization, will rise with a consequence for prices. All of this is on the supply side. On the demand side, retail has always been a local business because consumer nuances and the structure of retailing vary so widely between countries.
The benefits of glocalization are many and transcend business alone. Given the geopolitical tensions and conflict, conducting commerce across countries aids in reducing conflict when the relationships are mutually beneficial. It’s clear that mass globalization, like virtually outsourcing all US manufacturing to China for example, has proven to be suboptimal for both countries. The upside in glocalization to world prosperity, innovation and even peace may be profound. That said, it will take discipline and commitment on the part of businesses to carefully balance the cost-advantages of producing their products in low cost markets – which will be an ever present temptation as businesses try to improve profitability and competitive advantage – with maintaining control of critical process, manufacturing and development in their own countries.
While globalization focuses on products, uniformity and efficiency, glocalization focuses on people, customization and relationships. To go ‘glocal,’ companies can partner with local market experts and supply chains to grasp how cultural nuances affect their strategies.
AI-driven insights can alert companies to regional shifts in consumer demand to distinguish between fads and lasting trends.
Glocalization shortens the supply chain, invigorates local jobs, and makes companies more resilient and agile. It can mitigate global supply chain issues like regional wars and threats to global shipping routes.
I recall when many of Ford’s left-hand-drive American cars, had to be adapted for right-hand-drive markets like Australia and the United Kingdom. That was a necessity, and it worked out wonderfully.
McDonald’s replaced its Ronald McDonald mascot with the more famous French cartoon character Asterix during its expansion into France. That was a win for McDonals.
A successful product can still fail if the local culture is poorly understood. In Germany, Walmart had to close its supermarket operations due to the emphasis it placed on customer service. This type of extraorinary service did not fit into the cultural norms of German consumers, so many stopped shopping at Walmart as a result.
A variety of cultural contexts can be tapped into through localization to generate high and sustained growth. It is possible for multinational companies to earn the trust of consumers by adapting their products to the needs of the market they intend to enter.
Glocalization, in most cases, brings foreign revenue into countries and creates jobs. Economies of scale across large production and distribution networks can also help businesses save money.
Emerging markets are often entered first by companies that conduct successful research. It increases the chances of gaining a competitive advantage unmatched by other companies.
There is no doubt that glocalization takes time and money, but it is not for the faint of heart.
It is possible for businesses engaged in glocalization to fail to establish a presence in new countries despite doing their due diligence. A company often releases a product that isn’t profitable.
Consumers who actively avoid buying from globalized companies due to an anti-globalization stance will always exist.
Overall, I don’t think glocalization replaces gloabalization because the approach will never be a one size fits all. – Db
It’s hard to comment meaningfully on an article that contains so many sweeping – if not, in fact, outright inaccurate – generalizations, but based on the context provided, I would say that yes, glocalization will prevail. Actually, I would go further: there was never such a thing as globalization, in the strictest sense ….I doubt there was ever a product or service offered exactly the same across the world, without some regard to local conditions, be they political, economic, climatic or cultural.
You are so right, Craig. Successful international companies have had what is called a glocalization strategy for years. How many? Since they decided to go sell into a differnet country. If they didn’t, they failed. Green Tea Oreos, anyone?
It depends whether you are looking at supply or demand. On the supply side, there certainly was globalization with the offshoring of manufacturing capability and capacity and the creation of often longer global supply chains. On the demand side, I agree: things have always been global with a local flavor. Especially so for retail, which is a very local business. Even Walmart can’t make its format work everywhere – expansion into Japan, Germany, etc. caused the company no end of problems. Aldi has tweaked its model for the UK and US markets. And so the list goes on.
Globalization and glocalization will coexist. Supply chains were notoriously globalized despite efforts to become more regionally focused. Brands are global, but successful ones adapt consumer-facing interactions to local flavors while maintaining their defining core. Either/or arguments won’t get a company to where it needs to be in the 21st century. Executives must simultaneously hold competing ideas while creating fans one market at a time.
I can’t handle another made-up word. Agreeing with Neil, once again, you must have both, a hybrid. Getting globalization right is important to derive the benefits many established basic business processes bring. Glocalization (choke) is most important to deal with the local culture, economy, infrastructure, and product sourcing.
Yes, a word made up just to describe something that has been happening for decades.
Full disclosure-prior to reading this I had never even heard of Glocalization…I mean, which consultant coined this phrase? All of these examples are cases of global brands adjusting product to meet the needs and wants of consumers in said countries, and that is most certainly NOT a new idea. In fact it has been around awhile. The answer, as always, is just good old understanding your customers. AI can probably help with that, and agile manufacturing can support cost challenges involved with different products.
An example is in order: back in the dark ages McDonalds opened up a store in Beijing. Hugely popular. Long lines, always, which eventually started impacting business. The problem was they had not accounted for the fact that (back then at least) Chinese families lingered over their meal. So you did not have the “eat and go” mindset you have in America. Eventually it was fixed (I forget how) but this is a great example of not completely understanding your market.
The consultant who coined “glocalization” obviously had nothing else to do. If that consultant understood globalization and what makes companies successful, they would know that it is no secret and no eureka.
What nonsense! I have been involved in international business for decades and have taught it for over ten years. The results are simple from the beginning, especially for consumer and food products, without adjustments and changes to the products for each country. You fail.
I have been using most of the examples in today’s discussion since I started teaching. No, Coca-Cola’s secret recipe is not one recipe. It is differnet in various countries. McD’s is quite successful in India, where customers don’t eat meat. Disney knew they could not copy and paste Florida or LA Disney to Shanghai, Hong Kong, or Tokyo. The examples used in today’s discussion I have been using since I started teaching. I teach Peter Drucker’s idiom, “Culture eats strategy for breakfast.” I added “lunch and dinner” as well.
Even in non-consumer products, be assured that the parts are “localized.” Boeing and Airbus often have the same suppliers. However, the tail assemblies made by the same Spanish manufacturer are not identical, except in name.
So the answer to today’s poll is simple. Globalization is Glocalization and always has been.
These strategies were baked into each of the highlighted brands from the get-go. Disney was localizing cartoons for Latin American audiences back during World War II, for crying out loud. Northwest Airlines recruited and trained Asian crews and flight attendants when they entered Japan post-war. P&G figured out new detergent formulations, package sizes, and even payment systems as they entered different countries in the 1950s. They taught us all about this in B-school in the 1990s, as established practice if you go global. Where can a grizzled Gen Xer get a cushy consulting fee for just reading out of an old textbook, because I’d like to sign up!
There are two answers to this question depending on the retail sector/category. I am a firm believer that brands need to take a stance on who they are and what they stand for at a global level, but grocers, restaurants, apparel fits and even homegoods need to be more sensitive to their target audiences. I don’t agree that Disney should change its iconic brand elements like Mickey and the Castle, but I do agree that McDonalds needs to adapt to local food preferences.
This sounds pretty simple to me. Globalize the Brand Promise and localize the product. And the process of executing the localized product will end up being some combination of global efficiencies and local market demand and policies. Meaning it won’t be so simple to execute.
On my first trip abroad (about 40 years ago), I was traveling with a group of about 6 or 7 other buyers. We were in a factory in Hong Kong and somebody mentioned they would be serving lunch soon. “This should be interesting”, somebody muttered. An hour later a guy walked into the conference room carrying two big bags of Big Macs and fries. The room erupted in joy. The McDonald’s experience was exactly what it would have been back home. Exactly. And now in Japan they serve squid ink burgers. Well…of course.
When I lived in China, I occasionally shopped at Uniqlo. To all outward appearances it had the exact same aesthetic and attitude as the stores I shopped in the USA. I bought a shirt and when I went to put it on a couple days later I could barely get my arm in the sleeve. Turns out a size “L” in China is not the same as a “L” in the USA. Well…of course. The Brand Promise was exactly the same, but the nuances of each market are recognized.
Localized product is not some mysterious concept. It lies at the heart of successful retail. I can’t help but wonder what the market would look like today if we still had just one regional department store in every medium to large market. We used to have as many as 4 in some large cities. Some portions of retail can benefit from cookie-cutter execution. And some can’t. Success lies in knowing the difference.
The economies of scale that globalization offers is a value proposition that is challenging to beat. The globalization model has proven very successful and profitable as brands such as Starbucks, Mcdonald’s, Coca-Cola, and others have rolled out their model overseas. However, by no means will “glocalization” replace the proven and resilient globalization model.
Globalization has enabled brands to partner with local suppliers, distributors, manufacturers, and other solution partners to roll out their products and services at scale. What is in play is the fact that there is a hybrid local/global model that allows companies to consider and account for the local, cultural, and unique needs of each market.
Personalization at scale across all local and global markets is now possible with the rich insights powered by GenAI that will help meet and exceed each local market’s expectations and needs. GenAI capabilities will also enable brands to be more prescriptive, with an agile, product and customer-centric operating model for each global/local marketplace.
Glocalization is not new, it was just called something different. McDonalds’ was mentioned in the article opened its first international restaurant in 1967. And the way products are marketed is not always the same. Ever heard of Mexican Coke? This American-branded product is made in Mexico and imported in the US which is extremely popular among Coke superfans.
Being good at “glocalization” is easier than ever before because of the availability of better data management solutions that can enable success around the world. Modern master data management solutions can house all of the data, menus, nutritional information, and technical product data and manage how they are executed at a local level. Companies must have a data strategy, global governance, and a source of truth of the data globally. Once that is set, then the offerings by the market can be translated locally, with topping off of appropriate relevant imagery and copy to appeal to the local customer base. Like others have said, it’s got to be a hybrid approach.
There is no real shift from globalization because both processes are necessary for multinational operations. Companies leverage manufacturing, sourcing, distribution, transportation and storage of products worldwide- globalizing. They offer localized products in stores suited for the local climate, culture, appetite, or demands, hire local employees, conform to local rules-localizing. It’s not a balanced trade off- both are needed to have successful international operations. These are separate functions and calling it something else doesn’t change that it’s been happening for years anyway. Multinationals continue to operate. What may happen is the impact of AI can simplify localization operations, enabling better language translation, honoring local customs, developing new products specific to a region more easily, and automating localization trends.
The notion that glocalization will supplant globalization overlooks the intricate dynamics between local and global forces. Globalization, despite its flaws, has facilitated unprecedented exchange, collaboration, and economic growth across borders. Glocalization, on the other hand, emphasizes localization within a global framework, recognizing the need for cultural sensitivity and market customization.
Rather than viewing glocalization as a threat to globalization, it should be seen as a complementary approach—a means of enhancing global strategies by integrating local nuances. Global brands understand the imperative of tailoring their offerings to diverse markets while maintaining a cohesive global identity.
In essence, the dichotomy between glocalization and globalization is a false one. The two concepts are not mutually exclusive but rather symbiotic, each informing and enriching the other. To dismiss globalization in favor of glocalization is to oversimplify the complexities of contemporary global dynamics. It’s imperative to embrace both paradigms, recognizing their respective strengths and limitations, to navigate the intricacies of our interconnected world effectively.
Learning from examples like Disney’s regional themes and McDonald’s diverse menus, businesses can prioritize cultural sensitivity, diverse offerings, and strategic marketing. Embracing flexibility, staying informed about local markets, and leveraging technology for personalized experiences can help maintain a global competitive edge while respecting unique local needs.
AI could enhance glocalization by analyzing vast data for more personalized products, services, streamline mass production processes, reducing costs and providing insights into local preferences. Companies, like Starbucks or Coca-Cola, might use AI to understand local preferences better. This tailored approach, combined with AI-driven supply chain efficiency, could foster a more resilient global economy. Additionally, businesses must navigate political uncertainties, impacting the delicate balance between global efficiency and local adaptability.
In order to get the concept of “glocalization” right, companies need to strike a balance between standardized global offerings and customized local experiences. If they can find this balance, they’ll succeed in fostering greater relevance and resonance with consumers. This concept goes back to the basic practice of tailoring experiences and offerings to meet the needs and preferences of consumers wherever they are.