Localization

In a general sense, localization is the process of customizing a product or  strategy so that it meets the needs of customers in specific foreign countries.   Differences in culture, language or legal regulations often require companies to make changes to their products in order to better reach potential customers abroad and to avoid cultural blunders. Click here for a brief introduction to the localization concept.

The GLOBE Center defines localization as the process of adapting language, products, marketing, operations, organization or strategies based on a thorough understanding of foreign markets and the global competitive landscape.  GLOBE activities are based on the philosophy that companies which proactively research the needs of foreign markets and make adaptations based on this understanding will be more successful in international ventures.

Today's international marketplace is becoming more globally integrated, yet companies are becoming more aware of national differences, such as language, cultural tastes, legal requirements, and distribution channels. Firms that ignore these differences and over-standardize their products are at risk of cultural blunders and failed ventures.  In recent years, there has been a dramatic increase in the number of companies providing localization services, and more companies are establishing globalization/localization units.

The key process of localization is obtaining information about foreign markets and applying this knowledge to the development of strategy for global competition. Companies leverage information on foreign markets by making adaptations to various business elements, such as product design, marketing communications, or operations. As companies cater to local differences, they must also explore potential global scale or scope economies in order to succeed in today's competition. To achieve both objectives requires advanced strategies, methods, and technologies.

International Marketing

The trade-off between standardardization and adaptation has been an ongoing debate in international marketing. Globalization (standardization) is having a uniform product and marketing strategy throughout the world. The benefits are economies of scale and brand consistency.  Ted Levitt's 1983 HBR article "The Globalization of Markets" is the most notable argument in favor of standardization.  However, many people believe that a policy of localization or adaptation is more effective in reaching potential markets.

Marketing scholars and practitioners have sought to answer questions such as: Which is the most effective strategy? How can a company choose the appropriate strategy?  How can companies choose a balancing point between globalization and localization? Is it possible to pursue a mix and match strategy, or to pursue both simultaneously so as to achieve transnational status?

Multilingual Communication

Over the past 15 years, the language service sector has grown into a multi-billion-dollar industry.  As the IT industry developed, translation agencies began offering a service known as 'localization', which involves adjusting a software package or website so it can release in multiple countries/languages. Many companies outsource this work to localization service providers.  This industry continues to develop and to offer an increasing variety of linguistic, technological, and other services to help companies expand globally.  This sector will continue to play in important role, as information technology expands and multilingual communication becomes more and more of an imperative.

Global New Product Development 

Global New Product Development is the process of designing or re-engineering products for global markets.  This issue of Global New Product Development is an important topic in the PDMA (Product Development and Management Association).  Important issues for Global NPD are sources of innovation, composition of design teams, and manufacturing process. Some innovative methods for designing global products include quality function deployment and modularity.

Globalization, Localization and International Policy

The process of globalization has had marked effect as companies expand and trade across borders.  While globalization has the potential to improve the well-being of all parties involved, it often has undesirable consquences.  Some groups have called for the re-localization of the world economy.  Effective international policy is needed to handle the complexities of capital flows, trade regulations, energy supply, environmental impact and political relations.