Introduction
According to Swart and Kinnie (2003), globalization is closely related to international marketing. Nonetheless, some of the accelerating factors that have led to globalization include increased foreign direct investment and exports. Nonetheless, globalization is widely considered to be an integration of financial markets (Richard & Geoffrey, 2004). In respect to this, globalization in international business is believed to have various facets (Pech & Slade, 2003).
With respect to this, Mintzberg and Lampell (2000) believed that globalization is the merging of separate and distinct national markets to a single enormous global market. On the other hand, it is believed by Mangena and Brent (2006) that product globalization entail sourcing of services and goods from various locations around the world in order to take advantage of differences in terms of their quality and cost factors of production.
On the other hand, localization relates to differentiation where by differences of tastes and preferences of customers are put into consideration in business operations (Krozer, 2008). Nonetheless, glocalization is taken to be the integration of both globalization and localization where by a business entity positions itself both globally and locally.
In respect to this, the paper explores different definitions of globalization, localization and glocalization and thereafter analyzes product as a marketing mix of Disneyland, IKEA and MacDonald in their globalization, localization and glocalization strategies (Brecher &Tim, 2004).
A discussion and debate on global, local and glocal strategies based on Disneyland, IKEA and MacDonald brands
Globalization
According to Yucel (2009), globalization is the relentless integration of markets, nations and technologies in enabling people, organizations and nations to reach the world farther, deeper, faster and cheaper than ever before. This helps in spreading free capitalization of the market to all countries of the world.
From this definition, Barnet (2009) believed that globalization is a process that helps in promoting integration of ideas, culture, goods and services. Yet still, according to Hanna (2010), globalization is a process that is driven by two main macro factors which include reduction of barriers to flow of services and goods and rapid technological change.
This was believed by Gerardo and Wong (2008) to be the major inhibiting factors to global integration of business before the Second World War. However, with the end of the war, global institutions such as United Nations, World Bank, International Monetary Fund among others were formed to help reduce these barriers hence paving way for globalization to take effect (Gerardo & Wong, 2008). By doing so, globalization was boosted.
On the other hand, it was postulated by Fredrickson (2010) that technological development that have been experienced in the recent years in the field of information processing, communication and transportation technologies have been paramount in advancing globalization. This position was also advanced by Eckerson (2006) who believed that modern technologies have enabled products and services to be developed with global standardized features. As a result, consumer preferences and tastes have become global hence contributing to globalization.
Example of globalization
IKEA globalization strategy used technology in designing unassembled furniture that could be easily shipped to any part of the world. This strategy by IKEA was taken so that its products could be easily spread to all corners of the globe as clients were given the option of assembling their own products.
However, globalization strategy applied by Disneyland failed to appeal to other markets in its initial stages as it was designed specifically for the US market. Later, the firm was able to diversify its entertainment products to fit various regional markets hence attaining a global status.
On the other hand, Macdonald’s was successfully in going global as it took advantage of advanced technology which it used in streamlining services and improving its efficiency in its products provision.
Localization
The word localization is given different definitions by different authorities (Ehnert, 2009). According to Drummond and Ruth (2008), localization is defined as a process of adapting a product or a service to a locality. Moreover, it is defined by Burn and Barnett (2008) as an adaptation of a product or a service to an environment that is not native.
Furthermore, location according to Bruijn and Veld (2010) is defined as the business operation in various states while adjusting these products and services to suite their respective states. For that case, Botha and Brink (2007) postulated that localization focuses on reducing differences in provision of products and services in order to suite these local needs in the operating environment.
In addition, localization is defined to be a process that is based on various theoretical foundations (Wariavwalla, 2008). According to Sklair (2010), one of the foundations is the consumer homogeneity. Since business processes is localized, the environment is to a large extent homorganic in nature. As a result, extend of adaptation is limited as compared to globalization (Rostow, 2002).
Besides, localization is defined to be the process of reversing globalization trends in favor of the local community (Robertson, 2002). In this respect, the local community can be a state or a number of states in a regional grouping.
All the same, localization according to Polanyi (2004) is defined as the process of taking products and services and making them culturally and linguistically appropriate to the targeted locale which may be a region or a country. On the other hand, it is believed by Moody (2007) that localization is the customization of product components for a specific target market. This helps in building a strong connection with clients in that particular area.
Example of localization
A good example of localization is the strategy used by Disneyland in entering the Chinese market. It achieved this by making translation of all foreign lyrics to local contents that were well received by its new markets. Moreover, it was well exemplified by IKEA as it continued to use strategies of differentiation which helped it to spread its products globally but with local tastes.
Furthermore, the strategy was applied by Macdonald’s as it provided localized products for specific regions it was expanding to. For instance, meat and pork products were never provided in the Indian market and instead vegetable products were given as per the preferences of this market.
Glocalization
According to McMichael (2006), glocalization is a term that has been developed recently as a result of the difficulties experienced from globalization process. Therefore, it is postulated to mean processes that seek uniformity of tactical strategies that are localized. This was concurred with Kasarda and Edward (2001) when they postulated that glocalization is the act of thinking globally while acting locally.
This was furthered by Kanter (2005) when he believed that although consumers in most cases have similar lifestyles, their traditional values and cultures do not disappear. As a result, marketing approaches need to put these differences into consideration when coming up with products for consumers (Clegg & Hardy, 2009). This kind of process is believed to be glocalization (Lynch, 2006).
On the other hand, it was believed by Kanter (2005) that glocalization in business environment means micro marketing where by marketing of goods and services are tailored on a global basis to increase differentiated local and specific markets. This position was affirmed by Knights and Roberts (2002) when they defined glocalization as the construction of increasing differentiated clients based on their traditions. Nonetheless, Watson (2006) defined glocalization as a combination of two concepts; globalization and localization.
Therefore, it is taken to be the process that advances in marketing a service or a product that is distributed on a global platform but makes them to fit various local market clienteles (Healey, 2007). For instance, if the firm is selling its services on the web, it can specifically advertise these services to a specific target group of customers.
Additionally, Roberts (2004) defined glocalization as developing a product or a service and distributing it globally but it must be fashioned in a manner that accommodates consumers in the local market. This view concurred with that of Foglio and Stanevicius (2007) who defined glocalization as the process of developing a product domestically and redesigning it later to meet local requirements, tastes and preferences and even abiding by the local laws.
Example of glocalization
This approach was used by Macdonald’s in its expansion process in India as it specifically offered vegetarian menu to suit tastes and preferences of the Indian market while maintaining its global standards. Moreover, Macdonald’s was able to maintain local face in all regions of its operation while upholding its standards.
The approach of localization was used by Disneyland in its expansion process in France as it turned shows and settings to reflect the French style so as to suite local environment while retaining its global standards. On the other hand, IKEA was forced to provide a wide variety of products in furniture products with different tastes in respective regions of operation. This ensured their internationalization process as different user needs were met while upholding high standards.
PESTEL Issue – Technological issue affecting Macdonald’s
PESTEL is the analysis of an external macro environmental factors in which a business entity is operating in (Hauchler, 2004). As given by Kotler (2009), it stands for political, economic, social, technological and environmental factors. According to Robert (2008), all these factors affect business processes of a company and it might have no powers to control them but to adapt to them.
For that matter, it is important that organizations continuously analyze their eternal environment in order to understand these macro environmental factors so as to take appropriate measures to adapt to them. For that matter, one of the macro factors that are affecting Macdonald’s is the technological issue as discussed by the paper.
Current technological trends affecting Macdonald’s
Technology is one of the micro environmental factors that are affecting Macdonald’s in its business operations. It works as a benchmark for company’s success. Therefore, it is important to be a head in technology in order to cope with competition with other players in the same industry (Inkeles, 2003).
With respect to that, Macdonald’s has tried to apply various technologies that are available in their operating environment. For instance, in terms of marketing its products, the firm widely applies technological tools such as web 2.0 technologies like facebook, twitter and other social sites in promoting its products (Macdonald, 2012). Moreover, Google advertisements and collaboration with other websites have largely been used to promote sales in specific regions of their operations.
Nonetheless, technologies such as television, hoardings have equally been applied in promoting its products. Furthermore, inventory system in its business operations has been widely used in its business processes. This has been of great importance to its business since it has helped to prevent payment of hidden costs, helped in preventing spoiling of products hence in return, assuring effectiveness and efficiency (Macdonald, 2012).
This has been made possible as some of the operations have been infused with these technologies (Greider, 2007). For instance, the inventory system and value chain management have been integrated and they help easier payment to stakeholders such as vendors and suppliers. This has helped the firm as it has added value to its products. Moreover, there have been some improvements in the inventory system together with its value chain has helped the company to be able to operate on a global platform.
Future trends and forecasts
According to Amsden (2009), technology is vital factors in attaining efficiency and effectiveness in business process. Therefore, since the company has already integrated technology in its business activities, it is expected that it will continue to move and change with these technology as it unfolds. For instance, the company will be forced to acquire wireless internet technologies that is fast growing hence replacing the traditional wired technology.
Moreover, the adoption of wireless internet technology will be able to increase its business processes. In return, efficiency and effectiveness in business processes will be enhanced (Khondker, 2004). Furthermore, the company will be in a position to save its operating costs due to amalgamation of various processes that will help in cutting costs.
Furthermore, it is expected in future that Macdonald will be able to integrate technology in its food production processes. Just like some of the soft drink companies are using expert systems in producing their products, it is also expected that Macdonald will be able to apply the same in its diverse products preparations.
According to Albrow (2002), this will help the company by cutting to a large extent its production and operating costs as manual processes will be automated hence cutting extensively on human labor costs. Moreover, this is likely to guarantee effectiveness and efficiency in its business processes (Evans, 2006).
Conclusion
Globalization forms a very significant aspect in the expansion of business operation in the global market (Hilb, 2008). However, for this process to be successful in the current times, it is relatively important that an organization must consider applying both globalization and localization which converge to achieve glocalization (Hill & Jones, 2009).
By doing so, the business is able to ‘think globally and while acting locally’ hence satisfying needs of all customers in the global market. This is so since products can be tailored in order to maintain the local culture, tastes and preferences which help the firm to maintain its market share both on locally and internationally (Ansoff, 2000).
Nonetheless, it is important to note that customers in the market require both local and global brands since they make them feel part of the wider international community while maintaining their local identity (Berman & Evans, 2006).
Therefore, a glocalization strategy is critical since it helps to integrate localization and globalization (Mintzberg & Quinn, 2003). In relation to this, MacDonald has been very specific as it applies glocalization strategy. This has helped it to achieve effectiveness and efficiency in its business operations as it has excelled in all of its regions of operation.
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