405: Global Strategic

Management

Introduction
What Is Glocalization?

• Glocalization is a combination of the words "globalization" and

"localization." The term is used to describe a product or service
that is developed and distributed globally but is also adjusted to
accommodate the user or consumer in a local market.
• A common example would be cars that are sold worldwide but
adjusted to meet local criteria such as emissions standards or
what side the steering wheel is located. It could also focus on
more cultural aspects, such as a global fast-food chain offering
geographically-specific menu items that cater to local tastes.
• Often, glocalization campaigns involve culturally friendly media
and ad campaigns to encourage the acceptance of foreign
products among a local audience.
Understanding Glocalization

• Glocalization is the adaptation of global and international products, into

the local contexts they're used and sold in. The term was coined in the
Harvard Business Review, in 1980, by sociologist Roland Robertson, who
wrote that glocalization meant "the simultaneity—the co-presence—of
both universalizing and particularizing tendencies."
• In regards to a particular product or service, this means the adaptation
of globally marketed products and services into local markets. A global
product or service, something everyone needs and can get used out of,
may be tailored to conform with local laws, customs, or consumer
preferences. Products that are "glocalized" are, by definition, going to be of
much greater interest to the end user, the person who ends up using the
product. This is because while it's something that everyone can use and
has use for, as a global product, it's localization makes it more specific to an
individual, their context, and their needs.
• Glocalization works for companies with 
decentralized authority structures, and for companies that
exist and compete in multiple, different cultural contexts. The
process can be expensive, and resource intensive, but it often
pays off for companies that practice it, as it allows for greater
access to a larger, more culturally varied target market. It also
makes those countries more effective competitors in those
markets.
• If globalization was charged with cultural homogenization,
glocalization is something of an answer to it. Glocalization can
be thought of as the opposite, or the inverse,
of Americanization, too, which is the influence that American
culture and business has on another country's culture. 
Key Takeaways
• Glocalization is a combination of the words
"globalization" and "localization." The term is used to
describe a product or service that is developed and
distributed globally but is also adjusted to
accommodate the user or consumer in a local market.
• The process can be expensive and resource-intensive,
but it often pays off for companies that practice it.
• Often, glocalization campaigns involve culturally
friendly media and ad campaigns to encourage the
acceptance of foreign products among a local
audience.
 Glocalization and Local Economies
• This has mixed results for the larger economy. In making these
companies more effective competitors, it should increase the quality
of competition and drive down prices, making goods more accessible.
• However, since glocalization is generally the practice of
large multinational corporations, driving the price down and taking a
big share of the market, the process can hurt smaller, local
businesses, struggling to compete with these corporations low costs
of production. This can result in less competition, and end up driving
prices up.
• Glocal, an adjective, by definition, is "reflecting or characterized by
both local and global considerations." The term “glocal management”
in a sense of “think globally, act locally” is used in the business
strategies of companies, in particular, by Japanese companies that
are expanding overseas.
History of the concept

• The concept comes from the Japanese word dochakuka, which means

global localization. It had referred to the adaptation of farming
techniques to local conditions. It became a buzzword when Japanese
business adopted it in the 1980s. The word stems from Manfred
Lange, head of the German National Global Change Secretariat, who
used "glocal" in reference to Heiner Benking's exhibit Blackbox
Nature: Rubik's Cube of Ecology at an international science and policy
conference.
• "Glocalization" first appeared in a late 1980s publication of the 
Harvard Business Review. At a 1997 conference on "Globalization and
Indigenous Culture", sociologist Roland Robertson stated that
glocalization "means the simultaneity – the co-presence – of both
universalizing and particularizing tendencies."
Sociology

• The concept of glocalization is included in the discourse on social theory. This is first
demonstrated in the way it challenges the notion that globalization overrides
locality by describing how the concept of local is said to be constructed on a trans-
or uper-local basis or is promoted from the outside. There is also the position that
the association of temporal and spatial dimensions to human life, which emerge in
globalization, exert little impact. Glocalization is also said to capture the emergence
of unique new indigenous realities that result in the interpenetration of the global
and local spheres. The term ‘glocklization’, combining the glocal concept with a 
Glock pistol, was coined in 2018 to indicate forms of glocalization that are
perceived as unbalanced and destructive to local cultural heritage.
• Glocalization of education has been proposed in the specific areas of politics,
economics, culture, teaching, information, organization, morality, spirituality,
religion and "temporal" literacy. The recommended approach is for local educators
to consult global resources for materials and techniques and then adapt them for
local use. For example, in information, it involves advancing computer and media
understanding to allow students and educators to look beyond their local context.
The important factors are:
(1) Historical: The trade routes were made over the years so that goods
from one kingdom or country moved to another. The well known silk-
route from east to west is an example of historical factor.
(2) Economy: The cost of goods and values to the end user determine
the movement of goods and value addition. The overall economics of
a particular industry or trade is an important factor in globalisation.
(3) Resources and Markets: The natural resources like minerals, coal, oil,
gas, human resources, water, etc. make an important contribution in
globalisation.
(4) Production Issues: Utilisation of built up capacities of production,
sluggishness in domestic market and over production makes a
manufacturing company look outward and go global. The
development of overseas markets and manufacturing plants in autos,
four wheelers and two wheelers is a classical example.
(5) Political: The political issues of a country make globalisation channelised
as per political bosses. The regional trade understandings or agreements
determine the scope of globalization. Trading in European Union and
special agreement in the erstwhile Soviet block and SAARC are examples.
(6) Industrial Organisation: The technological development in the areas of
production, product mix and firms are helping organisations to expand
their operations. The hiring of services and procurement of sub-
assemblies and components have a strong influence in the globalisation
process.
(7) Technologies: The stage of technology in a particular field gives rise to
import or export of products or services from or to the country. European
countries like England and Germany exported their chemical, electrical,
mechanical plants in 50s and 60s and exports high tech (then) goods to
under developed countries. Today India is exporting computer / software
related services to advanced counties like UK, USA, etc.
Key Aspects of Globalisation

• Containerisation
• The costs of ocean shipping have come down, due to containerisation, bulk
shipping, and other efficiencies. The lower unit cost of shipping products around
the global economy helps to bring prices in the country of manufacture closer to
those in export markets, and it makes markets more contestable globally.
• Technological change
• Rapid and sustained technological change has reduced the cost of transmitting
and communicating information – sometimes known as “the death of distance” –
a key factor behind trade in knowledge products using web technology.
• Economies of scale
• Many economists believe that there has been an increase in the minimum
efficient scale (MES) associated with some industries. If the MES is rising, a
domestic market may be regarded as too small to satisfy the selling needs of
these industries. Many emerging countries have their own transnational
corporations.
• Differences in tax systems
The desire of businesses to benefit from lower unit labour costs and other favourable
production factors abroad has encouraged countries to adjust their tax systems to
attract foreign direct investment (FDI). Many countries have become engaged in tax
competition between each other in a bid to win lucrative foreign investment projects.
• Less protectionism
Old forms of non-tariff protection such as import licensing and foreign exchange
controls have gradually been dismantled. Borders have opened and average import
tariff levels have fallen.
That said, it is worth knowing that, in the last few years, there has been a rise in non-
tariff barriers such as import quotas as countries have struggled to achieve real
economic growth and as a response to persistent trade and current account deficits.
• Growth Strategies of Transnational and Multinational Companies
In their pursuit of revenue and profit growth, increasingly global businesses and
brands have invested significantly in expanding internationally. This is particularly the
case for businesses owning brands that have proved they have the potential to be
successfully globally, particularly in faster-growing economies fuelled by growing
numbers of middle class consumers.
Eight barriers in economic activities:

• Many countries in Particular developing ones impose

restrictions to globalisations by:
• i. Imposing high taxes and duties for capital goods,
spares and materials,
• ii. Licensing restrictions,
• iii. Foreign exchange restrictions,
• iv. Investment restrictions,
• v. Incentives and prioritisation to specific domestic industries,
and
• vi. Banning / restricting products of foreign origin.
• vii. Procedural hassles, bureaucracy
• viii. Closed mind-set
What Are the Benefits of Globalization?

Globalization impacts businesses in many different ways. But those who decide to take on international
expansion find several benefits, including:
 
1. Access to New Cultures
Globalization makes it easier than ever to access foreign culture, including food, movies, music, and art.
This free flow of people, goods, art, and information is the reason you can have Thai food delivered to
your apartment as you listen to your favorite UK-based artist or stream a Bollywood movie.
2. The Spread of Technology and Innovation
Many countries around the world remain constantly connected, so knowledge and technological advances
travel quickly. Because knowledge also transfers so fast, this means that scientific advances made in Asia
can be at work in the United States in a matter of days.
3. Lower Costs for Products
Globalization allows companies to find lower-cost ways to produce their products. It also increases global
competition, which drives prices down and creates a larger variety of choices for consumers. Lowered
costs help people in both developing and already-developed countries live better on less money.
4. Higher Standards of Living Across the Globe
Developing nations experience an improved standard of living—thanks to globalization. 
According to the World Bank, extreme poverty decreased by 35% since 1990. Further, the target of the
first Millennium Development Goal was to cut the 1990 poverty rate in half by 2015. This was achieved
five years ahead of schedule, in 2010. Across the globe, nearly 1.1 billion people have moved out of
extreme poverty since that time.
5. Access to New Markets
Businesses gain a great deal from globalization, including new customers
and diverse revenue streams. Companies interested in these benefits look
for flexible and innovative ways to grow their business overseas. 
International Professional Employer Organizations (PEOs) make it easier than
ever to employ workers in other countries quickly and compliantly. This
means that, for many companies, there is no longer the need to establish a
foreign entity to expand overseas.
6. Access to New Talent
In addition to new markets, globalization allows companies to find new,
specialized talent that is not available in their current market. For example,
globalization gives companies the opportunity to explore tech talent in
booming markets such as Berlin or Stockholm, rather than Silicon Valley.
Again, International PEO allows companies to compliantly employ workers
overseas, without having to establish a legal entity, making global hiring
easier than ever.
What are the Challenges of Globalization?

1. International Recruiting- It’s not surprising that 30% of U.S. and UK tech leaders cited 
international recruiting as their most common challenge. Recruiting across borders creates
unknowns for HR teams. First, companies create a plan for how they will interview and
thoroughly vet candidates to make sure they are qualified when thousands of miles separate
them from headquarters. Next, companies need to know the market’s demands for salaries
and benefits to make competitive offers. To ensure successful hires, HR teams must factor in
challenges like time zones, cultural differences, and language barriers to find a good fit for the
company.
2. Managing Employee Immigration- Immigration challenges cause a lot of headaches internally,
which is why 28% of U.S. and UK tech leaders agreed it was one of their top challenges.
Immigration laws change often, and in some countries, it is extremely difficult to secure visas
for employees that are foreign nationals. The U.S., for example, is getting stricter with 
granting H-1B visas, and Brexit makes the future of immigration to the UK uncertain.
3.  Incurring Tariffs and Export Fees- Another challenge both U.S and UK tech leaders said they
face in the report is incurring tariffs and export fees—29% agreed this is a challenge for their
global businesses. For companies looking to sell products abroad, getting those items overseas
can be expensive, depending on the market.
4. Payroll and Compliance Challenges- Another common global expansion obstacle is 
managing overseas payroll and maintaining compliance with changing employment and tax
laws. This management task gets even more difficult if you’re trying to manage operations in
multiple markets.
5. Loss of Cultural Identity- While globalization has made foreign countries easier to access, it has also
begun to meld unique societies together. The success of certain cultures throughout the world
caused other countries to emulate them. But when cultures begin to lose their distinctive features,
we lose our global diversity.
6. Foreign Worker Exploitation- Lower costs do benefit many consumers, but it also creates tough
competition that leads some companies to search for cheap labor sources. Some western companies
ship their production overseas to countries like China and Malaysia, where lax regulations make it
easier to exploit workers.
7. Global Expansion Difficulties- For businesses that want to go global and discover the benefits of
globalization, setting up a compliant overseas presence is difficult. If companies take the traditional
route of setting up an entity, they need substantial upfront capital, sometimes up to 
$20,000, and costs of $200,000 annually to maintain the business. Additionally, global businesses
must keep up with different and ever-changing labor laws in new countries. When expanding into
new countries, companies must be aware of how to navigate new legal systems. Otherwise, missteps
lead to impediments and severe financial and legal consequences.
8. 8. Immigration Challenges and Local Job Loss- The political climates in the United States and Europe
show that there are different viewpoints on the results of globalization. Many countries around the
globe are tightening their immigration rules, and it is harder for immigrants to find jobs in new
countries. This rise in nationalism is mainly due to anger from the perception that foreigners fill
domestic jobs or at companies moving their operations abroad to save money on labor costs. For
example, the Economic Policy Institute reports that the U.S. trade deficit with China (or the amount
by which our imports exceed our exports) cost Americans 3.4 million jobs since 2001.
 Five advantages of using marketing localization

1. Marketing localization decreases barrier to entry:

When introducing your company to a new market, there are several barriers to entry that may be observed. It
could be government monopoly; limited or scarce channels of delivery of goods; tight competition; or lack of
product or brand awareness.
Market adaptation is mandatory in many countries and so it makes perfect sense to localize marketing. This could
be the translation of product packaging, removing/altering product ingredients or packaging, changing brand
names and so on.
One classic example for this would be Coca Cola in China. Coca Cola is currently known as Kekoukele in China. This
is because its original brand name, when translated into Chinese, means “bite the wax tadpole” or “female horse
fastened with wax,” which are unusual and inappropriate.
It would have been incredibly unappetizing to buy a drink thus named, so Coca Cola had to do a change to their
brand name to adapt to the Chinese market.
They chose the brand name Kekoukele because it means “tasty fun” and it is close to the original brand name.
This dramatically changed Coca Cola’s image in China, and it helped them connect to locals in a more language-
appropriate and personalized way.
2. Localization customizes customer experience:
• In many first-world countries, products are often sold in larger-container quantities, which is done based on both
consumption and convenience.
• On the other hand, the same products sold in third-world countries may not be affordable for the majority of
consumers and that would greatly affect their sales. Due to these pricing constraints, companies may create
products in different and smaller packaging, such as sachets or pouches, for the greater market to be able to
afford it.
3. Localization breeds cultural respect and appropriation:
It’s no secret that cultural patterns, religions and norms affect people’s habits, outlook in life, the media
they choose and even the products they buy.
Advertising or identifying your brand with a Christmas or Christmas-related promotions, for example, in a
largely non-Catholic or non-Christian country may not be accepted by the target market. On the other
hand, advertising your brand with a Christmas theme in Christian and Catholic countries will be largely
appreciated and remembered.
Outsourcing experts from bradfordjacobs.com have seen how hiring local marketing executives in Europe,
where every border is a new country and culture, played a big role in providing contextually correct
translations and preventing conflicts with the target market’s culture.
4. Localization results to better brand identification:
Marketing localization “personifies” a brand, which helps it connect to its target market on a deeper level.
Some brands become an extension or expression of culture in some countries by integrating culture into
their brand message and active storytelling.
It’s even been argued that Coca Cola created the modern image of Santa Claus because of its advertising.
5. Localization hastens local business development:
To sum it all up, marketing localization accelerates business development. Creating a demand for your
products or services is not your ticket to success.
Knowing your target market deeply and seeing their needs from their perspective is the key to providing
products or services that are in demand.
You won’t be able to achieve this if you use the same standards for all your target markets all over the
globe. This can only be done with marketing localization based on in-depth market research.