Almost every business organization – big and small – wants a share of the global pie. Although there remain obstacles and challenges to successful worldwide expansion, advances in globalization and localization strategies make it less complicated for companies to navigate these loopholes.
However, devising a comprehensive and results-oriented global strategy is necessary for any business that wants its brand recognized and appreciated globally. If your company aims to make its presence known and felt worldwide or at least in several parts of the globe, these ten tips for building a successful globalization strategy are your ticket.
1. Link Global Growth to Your Organization’s Mission and Vision
All organizations require a solid theoretical foundation for their existence to hold amidst adversity and the changing times. That’s why the first thing that business owners create is the company’s vision and mission.
These organizational foundations serve as guideposts for the business as it devises and refines its business philosophies and strategic objectives. They are the lighthouse at the peninsula’s tip, guiding ships safely into the bay.
Your company’s globalization strategy must stem from your organization’s vision and mission. It will be wise to revisit these fundamentals and tweak them as necessary. It’s crucial to link your global growth to the company’s vision and mission because it stabilizes everything. It offers consistency across organizational turmoils and challenges.
For example, a change in corporate leadership might occur suddenly. You’ll never have to worry because the global initiatives, programs, and resources stay the same. After all, the global growth strategy is an integral component of your organization’s vision and mission.
2. Determine the Global Strategy Your Company Wants to Pursue
Although companies can develop their respective globalization strategies that align with their organization’s vision and mission, experts identify four principal globalization strategies. Understanding each will help you determine which model to use for your business.
· Export Strategy
Most start-ups and small businesses adhere to an export globalization strategy. As the term implies, the company only ships its offerings to customers worldwide. It doesn’t have a physical presence in other countries.
For example, an Alaskan company can export its world-class Dungeness Crabs to restaurants, hotels, and other establishments worldwide. It doesn’t have a facility in Europe, Asia, or the Middle East. Instead, the business relies on international opportunities, logistics technologies, and relaxed trade regulations in countries importing the product. The organization doesn’t worry about investing in a physical plant in these regions, making the strategy more feasible.
· Standardization Strategy
Many of the world’s most recognizable brands adhere to a standardization globalization strategy. For example, Apple uses standardization to appeal to and wow its loyal followers worldwide. The iPhone you buy in Mumbai has the same looks, features, and specifications as the iPhones elsewhere. The same is true with the brand’s iPads, iPods, Macs, and MacBooks.
Domino’s Pizza also adheres to a standardization strategy. Although toppings might vary to meet local taste preferences, the basic recipe remains the same. Mexico-based CEMEX also follows a standardization strategy to expand globally. The cement and aggregate building materials it manufactures in different locations are the same worldwide.
Standardization strategies are also suitable for business-to-business (B2B) companies. They can create information technologies, equipment, machines, and tools with a universal design that other businesses worldwide can leverage. These offerings require little to no customizations for local markets.
So, how does this strategy work? Standardization strategies are ideal for companies that view the world as a single marketplace with minimal variations. They assume that a single product is enough to meet customer needs everywhere. It’s a more efficient methodology because it centralizes product design, simplifies the supply chain, gains manufacturing scale economies, and reduces marketing costs.
· Multidomestic Strategy
Retailers love using a multidomestic globalization strategy because they can customize their processes or products to meet specific local market conditions. Overall management rests in the home country where global decisions emanate.
On the other hand, country managers adopt the policies and adapt them to their respective markets. They rely on their extensive knowledge of local laws, regulations, culture, tastes, and customs to make the most appropriate localization strategies to meet the global objectives.
An example of a company that uses a multidomestic globalization approach is 7-Eleven. Although the global convenience store has its headquarters in Dallas, Texas, it has 19 country and territory managers. These regional decision-makers apply the head office’s globalization strategies and tweak them to meet local requirements across 78,000-plus stores worldwide.
For example, Japanese 7-Eleven stores have processes and products localized for the Japanese market. Their product selection reflects the tastes and preferences of the Nipponese, and their marketing activities embody traditional Japanese values, traditions, and customs.
· Transnational Strategy
Few global brands use a transnational globalization strategy because of many challenges. This methodology requires a combination of standardization’s economies of scale and a multidomestic approach’s robust localization measures. It’s a tightrope to achieve and maintain the balance between these two strategies.
Ford is one of the few corporations that adhere to a transnational strategy. It provides a standard “blueprint” for its automobiles, which different country branches can modify to meet local laws and regulations.
Each country with a Ford manufacturing facility can customize the vehicles and design marketing strategies that adhere to local laws and standards. Although Ford automobiles have a recognizable form anywhere, they have subtle customizations that meet local preferences.
Most businesses adhere to either standardization or multidomestic global strategy. It will be wise to examine your organizational fundamentals to determine which of these four globalization strategies is the most appropriate for your company.
3. Ensure a Strong Leadership, Management, and Organizational Buy-in
No globalization strategy is effective if it doesn’t have the full backing of the company’s top-level executives and senior management. Unfortunately, influencing the CEO, Board of Directors, and other key decision-makers is never a walk in the park. Organizational politics and vested interests can derail any efforts to go global.
Careful planning is necessary to present your global strategy to the organization’s leadership and executive management. They must see the long-term benefits of globalization, enabling them to embrace the methodology as theirs. Some globalization experts recommend showing the industry’s general direction and how the chosen global business strategy fits into the equation.
It will be wise to prepare all the resources you’ll need to persuade the leadership to support the globalization initiative. Otherwise, your efforts will fail even before they have the chance to start.
You must recognize that the organization’s leaders must have your back in going global. After all, you’ll need money, materials, and human resources to operationalize the globalization and localization strategies. These decisions and the flow of cash emanate from the higher-ups.
Brush up on your diplomatic skills. Learn to negotiate with these bigwigs so your company will take off to a stellar start on the global stage.
4. Engage Executive Leaders with Global Experience
Are you knowledgeable about the ins and outs of globalization? How about localization? Do you have competent people who can drive a business into the global era? If your company doesn’t have any of these professionals, can you hire one even on a consultancy basis?
An often overlooked globalization strategy is engaging senior management and top-level executives with extensive global experience. They are former country managers or regional representatives with excellent knowledge of the inner workings of local markets.
Unfortunately, not all businesses have globally experienced leaders on their Boards. Nevertheless, this should not stop them from pursuing their globalization efforts. They can always hire a consultant with extensive knowledge and experience on the global stage. This professional might cost the organization, but the dividends are worth it.
Engaging executive leaders with global experience is essential if you want to expand globally. They can guide you in crucial globalization steps, leveraging their knowledge of local markets and global economies. These consultants can offer insights on how a global strategy can benefit your business, expanding your negotiation arsenal to ensure a strong buy-in from your top-level executives.
5. Define Key Performance Indicators to Measure Globalization Progress
You don’t want to implement your globalization strategy without an in-depth understanding of what you intend to measure. In other words, how do you know your methodologies, activities, and techniques are working or meeting the organization’s globalization objectives?
You might want to check your strategic objectives to define the measurable elements. For example, most companies want to evaluate their relationship management efforts. This performance area might have several attributes, such as acceptance, communication, trust, mutual respect, and shared values and goals.
Measuring these elements requires dissecting them further into their parts, allowing you to quantify them. Quantification enables businesses to objectively measure the different KPI parameters, leading to evidence-based decision-making.
Other areas worth measuring in a globalization approach include human resource compliance and banking and financial close-out procedures. It’s always a sound idea to document all results, including successes and failures.
Companies must also measure scalability to other countries and regions, giving them opportunities to grab. They must communicate these efforts to everyone in the organization, including top-level executives, stakeholders, managers, supervisors, staff, members, and volunteers.
6. Integrate Localization Strategies within Each Product Life Cycle
Most people think that globalization only occurs towards the end of a product’s life cycle. Unfortunately, it isn’t the case. A successful globalization strategy requires localization techniques and methodologies integrated into each product life cycle’s stages.
For example, products and services start with market introduction and development, where the company invests in marketing and advertising campaigns to drum up interest for its offerings. Your business can work with local experts to optimize your localization strategies, especially if you adhere to the multidomestic globalization approach.
Integrating localization strategies at this stage will hasten the speed of product growth, allowing local customers to seek more of your products. However, product development must be in tune with local customs, traditions, tastes, and preferences.
Translating your marketing information and advertising materials into the local language can improve the success of your localization efforts. Hence, you also guarantee globalization success.
Localization strategies persist through the growth, maturity, and decline stages of the product life cycle. After all, change is everywhere. Geopolitical shake ups can rattle a global business within a local market. Hence, organizations must adapt to these social and political disruptions to remain relevant in their respective communities.
7. Localize Early and Start with the Organization
Small business owners and start-up organizations believe globalization isn’t for them. After all, how can you compete with well-established brands on the global market made more competitive by local industry players?
Many organizations recognize that it’s not only big-name brands with a local presence they must go up against. Local and native players with an excellent understanding of the marketplace also pose a threat to new entrants.
This assumption might have been true in the past. However, recent advances in artificial intelligence (AI) and more robust and efficient workflows allow new companies to go global even without a sound globalization strategy. They only need a rudimentary grasp of globalization’s value in advancing the company’s vision, mission, and strategic objectives. Hence, it’s never too early to start localizing for globalization.
However, small businesses must advocate localization within their respective organizations. It’s unwise to think global when one cannot adhere to simple localization strategies. For example, an American software company wanting to expand into Japanese and German markets might want to localize by speaking in Japanese and German in the respective local offices.
8. Embrace Collaboration
A successful globalization strategy hinges on effective collaboration and mutually beneficial partnerships. After all, no company can produce and deliver a product or service by itself. It needs third-party organizations, vendors, and players with distinct roles to play.
For example, Apple’s supply chain network involves nine major companies supplying the tech giant’s products worldwide. They include Foxconn, Samsung, Murata, Intel, Qualcomm, Luxshare, Goertek, Pegatron, and Wistron.
However, globalization doesn’t only require inter-business collaboration but also intra-organizational teamwork. Different units and departments within the company must also work together to make globalization and localization work. It’s insufficient to gain the upper management and leadership’s support. Middle managers and their respective teams must also be in the same boat.
Determining the best globalization and localization strategies requires everyone to brainstorm. If this is not feasible, your company can create a team for the purpose. It can include the web team, language translation team, brand or product management group, and the sales/marketing department. You can pick the ablest or most competent representative from each group to collaborate on the globalization task.
9. Keep Interactions and Engagements Concise
A globalization strategy isn’t a one-off thing. It entails tens of core elements, each requiring hundreds of activities, methods, and techniques. Time is never your friend when you’re attempting to reach out to local domestic markets across the globe. You’ll want to squeeze every second you get to focus on the various tasks required to get your globalization efforts running.
Hence, it’s always an excellent idea to keep engagements, interactions, and communications simple and concise. You don’t want to spend more time chit-chatting and doing small talks than focusing your energies on globalization and localization activities.
Experts recommend keeping slide decks, emails, and meetings to the point. You can outline your agenda with a clear purpose, measurable objectives, actionable strategies, and specific time requirements. Although some people might find this technique impersonal, it can shave off precious hours from less-productive meetings.
10. Invest in Staff Training
We cannot emphasize this enough. It’s one thing to profess your well-planned globalization strategy to the whole organization. It’s a different matter to equip everyone with the competencies for making globalization and localization happen.
Training and seminars about globalization and localization principles, methodologies, and techniques can prepare your team for the task. You can hire competent trainers from the industry and consultants who can drop by your company periodically to check on things.
The best way your employees will appreciate and imbibe the principles of globalization is by sending them to your overseas branch. It’s a form of motivation while promoting a deeper understanding of the company’s need for globalization. Upon their return, they can provide invaluable insights into how else you can improve your globalization and localization strategies.
If you don’t have the budget to send your staff overseas, you can use other methods for connecting and interacting with your global market. Videoconferencing platforms can be indispensable tools in facilitating learning across international borders without leaving your respective offices.
Building an effective globalization strategy is no easy feat. Companies must exert their best efforts and utilize every available resource to integrate globalization as one of the organization’s pillars.
Everything follows strong business fundamentals, from the top of the board to the last person on the ground. Globalization requires businesses to think, act, and breathe “global” every waking minute. Infusing localization strategies into the company’s lifeline can also guarantee a successful globalization program.
Partnerships with third-party organizations can help strengthen your global strategy. For instance, a reputable translation company can deliver accurate and quality materials specific to a target market without undermining your brand image. We can be your dependable partner in building a successful globalization and localization strategy.