Globalization and localization

Globalizationand

localization12 examples

Source : http://www.pixelio.de/details.php?image_id=130909&mode=search

Example # 1

For the food industry, where cultural sensitivitiesand local tastes are very important, it's absolutelyimperative that we delegate substantial authority to local management .

Helmut Maucher

Source :Interview with John Quelch.http://www.strategy-business.com/article/19753?pg=all

In Brazil, Nestlé engages rural women to operate asdistributors . They travel door-to-door demonstratingproduct benefits and selling directly to consumers.

By creating incentives for local retail entrepreneursrather than hiring salaried employees or franchise holders, the company reduces its need to monitor individual sales performance.

Sourcehttp://www.bcg.com/impact_expertise/publications/files/Next_Billions_Business_Strategies_Enhance_Food_Value_Chains_Jan_2009.pdf

Worldwide, Nestle employs approximate 5000 people in 24 R&D centers and over 250 application groups.

It extends its reach by tapping into the technologies and expertise of more than 1 million researchers around the world .

Source : http://itssaulconnected.com/archives/2009/05/law-of-large-numbers/

”Since World War II, Nestlé's milk has by and large been produced by thousands of small farmers in developing countries.

And their supply chain efforts have gone way beyondjust sourcing.”

Source : V. Kasturi Rangan, Harvard Business School.From the article ”Business and the Global Poor” by Sean Silverthorne.Harvard Business School Working Knowledge, Feb. 5, 2007.http://hbswk.hbs.edu/item/5529.html

Nestlé has provided the technology, training, and supply-chain investments to make it possible for the small farmer to produce good-quality milk, transport it, and sell it to the company.

Source : V. Kasturi Rangan, Harvard Business School.From the article ”Business and the Global Poor” by Sean Silverthorne.Harvard Business School Working Knowledge, Feb. 5, 2007.http://hbswk.hbs.edu/item/5529.html

For excellence today, a bottom-up approach appearsto be more effective in both formulating and implementing customer-satisfaction strategies.

At Nestlé, for example, it is local country managers and their subordinate product and segment managers who regularly make such today-for-todaydecisions, not corporate headquarters management.

Source : Abell, Derek F.: ”Competing Today While Preparing for Tomorrow, p. 78-79.”

Example # 2

Unilever trained 25,000 Indian village womento distribute a laundry detergent door-to-door, reaching 80,000 villages and gaining $250 million in annual revenue.

Source : http://www.booz.com/media/uploads/Roasted_or_Fried.pdf

In 2003, Unilever added rural sales reps (calledboreholers) to distribute products to remotevillages with rotational markets (market days) thatare difficult to put into coverage plans.

Source :Mahajan, Vijay: Africa Rising, p. 90.

In Nigeria, where 3.5 million babies are born everyyear, Unilever distributes a million free samples of products such as Pears baby lotion to mothers in maternity clinics and hospitals.

The company has worked with the nurses and midwives association to educate mothers aboutbaby care .


Example # 3

P&G cut the price of Crest toothpaste more than 50% in China by reducing the cost of packaging, which is less important to consumers than being able to choose from a variety of flavors.

Sourcehttps://www.mckinseyquarterly.com/Think_regionally_act_locally_Four_steps_to_reaching_the_Asian_consumer_2436

Example # 4

Sources :Mahajan, Vijay: Africa Rising, p. 102.

In Morocco, The Coca-Cola Company sponsoredits own university, teaching shopkeepers how to use Excel spreadsheets and training salespeople.

The World Wildlife Fund (WWF) works with Coca-Cola, which operates 39 bottling plants in China, to improve the water quality of the upper reaches of the Yangtze river, which provides China with 35% of its fresh water and is the longest river in Asia.

For example, WWF and Coca-Cola work with rural farmers to reduce the runoff of animal waste into the river by turning pig waste into biogas, a type of fuel that can be used for cooking and heating.

Source : http://knowledge.wharton.upenn.edu/article.cfm?articleid=2568, August 18, 2010.

One innovation that came out of India is the solar-powered coolers. We’re looking to expand that to other markets. There’s great engineering talent in India.

Another product that shows promise is Minute Maid’s Pulpy, an orange juice with pulp that did extremely well in China. We expanded it into many countries.

Source :Interview with Mr. Ahmet C. Bozer.http://www.strategy-business.com/article/00093?pg=all

Example # 5

”For Coartem [antimalarial drug], Novartis has createdextensive educational materials and blister packs withillustrations to encourage proper use of the drugs.

The company has even created comic books in different languages for children to raise awareness of malaria and discuss its prevention and treatment.”

Source : Mahajan, Vijay: Africa Rising, page 93.

SourceA conversation with Eric Schmidt, CEO of Google. Charlie Rose, March 6, 2009.http://www.charlierose.com/view/interview/10131

We’ll have automatic translation .

Example # 6

Designed in emerging markets

Designed in mature markets

Sold inmaturemarkets

Sold inemergingmarkets

Sourcehttp://www.business-strategy-innovation.com/wordpress/2010/06/what-comes-after-reverse-innovation/

Source : https://www.myc4.com/

Dennis Mwangi Gachoki in Kenya no longer irrigates using a bucket. With a loan of £3500, he invested in a water pump, water hoses and fertilizer, which means he increased his yield and quality of its productio n

Sources : http://www.facebook.com/photo.php?fbid=121241324572692&set=a.121241321239359.15968.120902984606526https://www.myc4.com/Invest/Businesses/View/6075

Source : http://www.coop.dk/upload/modul/coop/Coops_ansvarstiltag/index.htm

Source : http://afrika.fdb.dk/forside-farmerne

Example # 7

When BP sought to market a duel-fuel portable stove in India, it set up one such co-creation system with 3 Indian NGOs .

SourceBrugman, Jeb & Prahalad, C.K.: ”Cocreating Business's New Social Compact.”February 1, 2007. Harvard Business Online.

The system allowed BP to bring the innovative stove to a geographically dispersed market through myriad local distributors without incurring distribution costs so high that the product would become unaffordable.


The company sold its stoves profitably, the NGOs gained access to a lucrative revenue stream that could fund other projects, and consumers got more than the ability to sit down to a hot meal -they got the opportunity to earn incomes as the local distributors and thus to gain economic and social influence.


Example # 8

Create entry-level goods for emerging markets and then quickly and cheaply repackage them for sale in rich nations , where customers are increasingly hungry for bargains.

The term for this new approach is trickle-up innovation.

SourceInnovation trickles in a new direction.http://www.businessweek.com/magazine/content/09_12/b4124038287365.htm

Sourceshttp://www.youtube.com/watch?v=8BvPUcZpGK8http://www.vijaygovindarajan.com/2009/09/reverse_innovation_how_ge_is_d.htm

Example # 9

McDonald’s serves vegetarian burgers in India and spicy ones in Mexico.

Source : http://www.economist.com/node/18584204


In crowded cities, delivery is essential for businessesfrom fast food to groceries. The streets are congested, and parking is unavailable. Home delivery has emerged as the most important channel for sales.

McDonald’s and other fast-food restaurants carrymeals through traffic in Cairo on delivery scooters . Delivery accounts for 27% of McDonald’s sales in Egypt, and as much as 80% for some rivals.

McDonald’s serves vegetarian burgers in India and spicy ones in Mexico.

Source :http://www.economist.com/blogs/whichmba%3F/2011/09/pankaj-ghemawat?fsrc=scn/tw/te/bl/promisingtheworld

Example # 10

GlaxoSmithKline has enlisted midwives to distributespecialized vaccines to infants in the Philippines.

Sourcehttps://www.mckinseyquarterly.com/Telecommunications/Strategy_Analysis/Capturing_the_promise_of_mobile_banking_in_emerging_markets_2539

Example # 11

The secret to the success KFC in China can be traced to its use of local ingredients - both in its management team and on its menus.

Sourceshttp://www.bloomberg.com/news/2011-01-26/mcdonald-s-no-match-for-kfc-in-china-where-colonel-sanders-rules-fast-food.htmlhttp://resources.alibaba.com/topic/531563/KFC_s_localization_strategy_in_China_.htmhttps://www.mckinseyquarterly.com/Think_regionally_act_locally_Four_steps_to_reaching_the_Asian_consumer_2436

“We customize our international flavors to suit local preferences, and 20% of our overall menu is localized. World over, the toppings at Pizza Hut are mainly beef and pepperoni.”

But in India, where up to 60% of the people are estimated to be vegetarian, “we have more variety in vegetarian toppings.”

Anup Jain, Pizza Hut India.

Source : http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4358

Example # 12

LG invested heavily in local R&D and staffed its operations with thousands of top-notch Indian designers and engineers.

LG’s product innovation center in Bangalore is the company’s largest outside South Korea.


Noting, for example, that many Indians use their TVs to listen to music , LG introduced new models with better speakers and, to keep prices competitive, less costly displays.


Intensive customer research and feedback determine the kind of adaptations to be made to products - the color of refrigerators, for instance.

The generous use of oil and strong spices such as turmeric in Punjabi cooking can stain pastel-coloredappliances, which is why more intense shades do particularly well in that market.

Source : http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4358

Globalization and localization

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