Question 1

a) What is meant by global localization? Is Kentucky Fried Chicken (KFC) a global

product? Explain.
"Global localization" can refer to a broad-reaching or world-wide (global) strategy for the
customization of materials to suit specific languages and locales (localization). Globalization is
becoming increasingly important for businesses all over the world. Not only is it important to
expand into new markets, but it is important to localize enough to be accepted while still keeping
your brand consistent worldwide. Corporations are beginning to see how difficult this balancing
act can be. Expanding into new countries can lead to enormous profits, but it comes at a much
higher risk. Glocalization is the concept of developing a product or service strategy that takes the
benefits of a global product platform and integrates it with the advantages of product
localization.
Just 10 years ago, it was widely believed that the future of global business lay in ever increasing
levels of standardization of products and processes. Business-schools taught future leaders to
globalize the international strategy and assess the speed of internationalization. Countries
neighboring each other were presumed to assimilate each others cultures (Europe treated as a
single culture). Companies would develop a global concept that fit a global customer-base which
was converging, becoming homogeneous.
Even though this strategy has economic advantages and has worked for some companies it
often backfires or hampers growth potential in many markets. Today, many companies are
learning that it pays to have a global product platform to reduce costs married with a local
customization of the products and processes to appeal to a cultural demographic. Globalized but
localized glocalized. Global business is moving towards what has been called mass
customization. New technology will aid in the development, with new production process such
as additive manufacturing which will make mass customization truly economically viable.
Getting the feel for glocalization is now seen as an efficient approach to build brand image and a
way to generate long-term brand loyalty. As global competition grows fiercer, its not enough to
have a product that is at 75% of its full potential due to unsuccessful glocalization. KFC is a
great example of successful glocalization. While KFC retain its core Kentucky fried chicken

concept as a global product platform in China, it has successfully localized its product portfolio
(i.e., its menu). Warren Lui, one of the members of KFCs management team in China outlines
the importance of cultural knowledge and product localization in his book KFC in China: Secret
Recipe for Success. Liu states that you need an understanding of China and the Chinese cultural
context so deep that it is intuitive, to understand the Chinese peoples mixed feelings, of love
and hate about the West, to understand Chinese history, language, the influence of Confucianism,
Buddhism and Taoism, this is especially important if you are in the consumer goods industry.
KFCs menu contains many items tailored to the Chinese consumer palate and it has paid off
the number of KFCs in China has grown to over 3,000, in 650 cities, with one new restaurant
opened a day. KFC has even penetrated smaller cities in the interior of China.

b) A companys global marketing strategy (GMS) is a crucial, competitive tool. Describe

some of the global marketing strategies available to companies. Give examples of
companies that use the different strategies
Global marketing is more than simply selling a product internationally. Rather, it includes the
whole process of planning, producing, placing, and promoting a companys products in a
worldwide market. Large businesses often have offices in the foreign countries they market to;
but with the expansion of the Internet, even small companies can reach customers throughout the
world. Competing successfully in this challenging business environment requires business-tobusiness companies to meet the needs of both low-growth and high-growth markets while
differentiating their offerings from foreign and local competitors. Many formidable rivals from
rapidly developing economies (RDEs) are capitalizing on their low-cost position in these fastgrowing markets and assuming a leading role in some global markets from natural gas and iron
ore to automotive forgings, micromotors, and regional jets.
Global companies face a radically altered business landscape following the recent financial
crisis, most notably a slowdown in world economic growth. Moreover, a two-speed world
economy is emerging, sharply defined by slower growth in the developed economies of the
United States, Europe, and Japan and much faster growth in Southeast Asia and the BRIC
countries (Brazil, Russia, India, and China).

Successful companies are able to adapt their business models to new groups of target customers
in RDEs and develop new ways to integrate these different business models to achieve synergies
and share best practices within the firm. To achieve global leadership, integrated strategies
should incorporate the following elements:

Market access: driving sales growth by reaching new markets and targeting new market
segments;
For example, rising to this challenge, General Electric has delivered on its
promise to create health-care innovations that would substantially lower costs,

increase access, and improve quality.

Network coordination: integrating operations to capitalize on the strength of the
companys global network.
For example, resource advantages developed in different markets can be shared
and diffused to other operating units around the world. Likewise, network
advantage is promoted by sharing successes around the world taking

innovations developed in RDEs back to developed markets.

Resource access: leveraging valuable resources (for example, talent, assets, raw
materials, and knowledge) in RDEs to achieve competitive advantage;
Many companies like General Electric, Microsoft, and Apple are transferring
steps in their value chainlike R&D or manufacturingin order to attract
talented personnel and to enhance design and manufacturing capabilities. Apart
from enhancing global competitiveness, companies are leveraging their sourcing

efforts in RDEs to secure access and penetration in local markets.

Local adaptation: developing and adapting products and services to satisfy the unique
needs of RDE customers;
To unlock the potential, General Electric created a local growth team model to
create new offerings for customers in RDEs, such as China and India, and
empowered them to develop their own strategies, organizations, and products.

References
1. Acevedo, L. 2012. Product Standardization Strategy. [online] Available
from:http://www.ehow.com/way_5379387_product-standardization-strategy.html
2. Holllensen. S, 2004. Global Marketing a decision-oriented approach, 3rd ed. Essex:
Pearson Education Ltd.
3. Rouse, M. 2005. Localization [online] Available
from: http://searchcio.techtarget.com/definition/localization
4. Gala-global.org, (2015). What is Localization? | Globalization and Localization
Association. [online] Available at: http://www.gala-global.org/what-localization
5. Universalconsensus.com, (2015). Glocalization: Global Product Localization Strategy |
Universal Consensus. [online] Available at:
http://www.universalconsensus.com/2012/08/21/glocalization-global-productlocalization-strategy/