Sensitive electronics must meet specific technological specifications and production occurs according to very nuanced processes. On a per-item basis, costs drop significantly and enable the car company to sell finished vehicles at a much lower cost to the end consumer. For example, a large business, such as a car manufacturer, can produce a big quantity of the same parts using a global supply chain and integrate these inputs into a small range of products. Foster collaboration and knowledge sharing among global teams to leverage diverse perspectives and expertise from different markets. Encourage cross-functional collaboration to ensure alignment and synergy across departments and regions.
Is a Global Standardization Strategy the Best Approach for Your Business?
Standards are indispensable to innovation, providing shared platforms for industry participants to work together to bring new technological solutions to the marketplace. Marketing mix can be explained as “the particular combination of marketing variables offered to a market at any point in time” (Cole, 2004, p.xiv), and these marketing variables include product, price, place and promotion. Extended marketing mix also comprises people, process and physical environment along with its four core components mentioned above. Finally, let’s look at Red Bull, the energy drink brand that’s dominated the industry for over three decades. A large part of the brand’s success is thanks to its strategic standardization efforts and widely recognizable image. Adidas also run several localized websites and social media profiles, where they create region and language-specific content.
The tech giant offers a consistent product line across the world, ranging from iPhones to MacBooks. The limitations can range from cultural insensitivity to regulatory challenges—and understanding these can help businesses craft a more effective and adaptable standardization strategy. Nike’s commitment to Global Standardization Strategy extends beyond product design to encompass branding and marketing. With its iconic swoosh logo and compelling advertising campaigns, Nike delivers a consistent brand message that resonates with consumers worldwide.
Economies of scale
In the past few years, the drawbacks of central globalized IT systems have become ever more apparent, while the advantages gained by running multiple national systems are often outweighed by complexity and costs. For a few early adopters, federated models like those described in this article are providing a better solution. Standardisation is mainly a client in relation to industrial types of products because industrial products are purchased from the same reasons all over the world. Moreover, standardisation can prove to be particularly effective for highly sophisticated and complex products from technical viewpoint (Vrontis et al., 2009). For example, many fast-food franchises have detailed processes documented to make sure that a burger is prepared in the same manner, regardless of which establishment in its franchise a consumer visits.
The ultimate goal is to achieve consistency and create a global appeal to a brand and its standardized products. Think standardized packaging, a recognizable image and slight variation in strategy across international markets. A lack of standardization can easily create confusion and misalignment among both your customers and global teams.
Standardisation can focus on core competitive advantage of the brand and it “allows for a consistent and strong brand to be developed across all markets” (Donelly, 2009, p.150). This essay represents a critical analysis of standardisation vs. adaptation in international marketing in the twenty first century. This is followed by critical analysis of adaptation strategy as an effective customer-orientation strategy by referring to relevant real-life business case studies. The essay is completed by drawing conclusions on standardisation vs. adaptation debate and its relevance to the modern marketplace. Standardization can help keep costs low, as you don’t have to invest in a new product or design for every market you want to enter. Plus, the approach is a great way to create an internationally recognizable brand image, which is crucial when expanding into global markets.
- While global standardization offers a host of benefits, it’s not without limitations that can affect a company’s success in various markets.
- A Global Standardization Strategy is a marketing approach adopted by multinational corporations to maintain uniformity across their products, operations, and marketing efforts worldwide.
- As many as 80% of B2B purchasing decisions are based on “direct or indirect customer experience” compared to 20% based on price.
- For example, the wood products industry participates in international standards to maintain consistency of like products.
- As more businesses set their sights on global expansion, a global standardization strategy serves as a double-edged sword, offering both compelling advantages and inherent limitations.
The Importance of International Standards for Innovation
This approach has solidified Apple’s position as a leader in the technology industry, with a reputation for innovation and excellence that transcends geographical boundaries. Coca-Cola epitomizes the Global Standardization Strategy through its consistent branding, packaging, and advertising worldwide. With its signature red cans and timeless logo, Coca-Cola maintains uniformity across diverse markets, ensuring instant recognition and consumer trust. Determine which aspects of your products can be standardized without compromising quality or local relevance. This may include standardizing core product features, specifications, packaging designs, and labeling requirements.
The scope should delineate which products, services, or processes are to be standardized and in which geographical markets. Learn from our expert panel how to prepare for global expansion, overcome common localization obstacles, and drive international growth. Here’s how localization can help businesses navigate the complex waters of global standardization challenges. Incorporating localization tactics as a complementary approach can let companies enjoy the benefits of standardization while effectively addressing its inherent limitations. Since it often relies on a centralized strategy, any regulatory shift in a significant market can necessitate changes that affect the entire global operation.
Its purpose is to provide an abstract overview of individual business domains that use similar business capabilities. Properly done, such a map helps leaders visualize the business dimensions and related IT services of a given capability and determine what level of customization or harmonization is needed for their target system architecture and operating model. Weighing the pros and cons of standardization and differentiation is challenging, not least because people’s views are often shaped by their function. Risk managers often favor centralized controls, for example, while country leaders push for local autonomy. Managing these conflicts requires hard facts, such as the cost implications of a specific decision, and sometimes the willingness of a senior leader, even the CEO, to step in and settle the matter.
A localized user experience that meets or exceeds customer expectations is a potent tool for retaining customers over time. A strategic approach to overcoming standardization obstacles often lies in the art of localization—an adaptable methodology that melds the best of both worlds. While global standardization is an attractive strategy for its efficiencies and uniformities, it’s not without its challenges. Find out how best to connect with customers worldwide and where to focus your money and efforts to ensure that you get the best ROI when going global. In some industries, such as computer chip manufacturing, there is very little room for error and product uniformity is important.
By allowing platform technologies developed by one firm to interface with products designed by other companies, standards mean products can be designed and produced at scale in different locations and marketed worldwide. Moreover, as new service providers or manufacturers enter a defined market with innovative products, standards can stimulate beneficial price and quality competition. In other words, standardisation and adaptation strategies do not have to be mutually exclusive; however, an adequate level of balance needs to be maintained between the two. McDonald’s exercises standardisation to a great extent global standardization is an approach of in supply-chain management, employee relations, service processes, and many other business processes, thus achieving economies of scale in several levels. Adaptation strategy implies changing various aspects of products and services to a considerable extent in order to meet the needs of consumers in international markets taking into account their differences (Chung, 2009).