What is Glocalization?

A few decades ago, when businesses sought to expand into new markets, it was difficult for overseas enterprises to comply with a country's commercial norms and regulations. However, they quickly recognized that if they wanted to break into the Market, they must learn the local language. As a result, corporations translated product information and websites into local languages.

The corporate change, on the other hand, did not end with the adoption of the local language. To expand their consumer base in foreign regions, international enterprises required to adapt to localization. As a result, the word Globalization was coined.

When global products or services are altered to match the customs, regulations, or tastes of a local market, this is known as glocalization. It is the result of combining the terms globalization and localization. Glocalization makes a product become a worldwide, universal product that anybody may use, and localization makes it simple to meet specific needs and requirements.

Importance of Glocalization

As the home market in industrialized nations matures, the necessity for international growth grows. Foreign markets provide a more substantial potential for long-term expansion. In this instance, a glocalization plan is critical for enhancing the likelihood of successful growth. The success of this technique is due to a high level of sensitivity to the preferences, requirements, and habits of local consumers.

For destination nations: Glocalization brings up the new competition. It drives local businesses to change in order to be more competitive. As a result, it helps to improve product creativity, diversity, quality, and cost.

Pros and Cons of Glocalization

Globalization is a contentious topic. Some people believe it has a positive impact on the Economy or society as a whole, while others just disagree. Here are the pros and cons listed below for better understanding.

Pros

• Beneficial in expanding business in international markets
• Increase sales resulting in more portion of profits
• Brand reach increases resulting in worldwide recognition
• More employment opportunities for local people
• Encourages innovation in the target country
• Access to a cheaper and diverse Range of products

Cons

• Requires lots of investments and resources
• Threat to local companies
• Resistance faced by local public
• High chances of failure of not being recognized by locals

Examples of Glocalization

Starbucks, KFC and McDonald's can be found all over the world, which is an example of globalization. Glocalization, on the other hand, can be seen in the alterations made to its restaurant chain menus in an attempt to cater to local preferences. These are just a few examples of well-known global corporations that use this technique.

The Bottom Line

The core concept behind glocalization is to enter new markets while tailoring services to the requirements and tastes of local customers. As a result, the company's products are more appealing to consumers in target countries.

Glocalization is not appropriate for all businesses. When a company's management structure is decentralized, this technique typically works well. As a result, business units have more freedom to make decisions and create strategies in response to local market conditions and competition.