Question

In what kind of industries does a localization strategy make sense? When does a global standardization strategy make the most sense? Identify a sample industry for each strategy and explain why this strategy is a fit. please explain in detail

Answer 1

A localization strategy is a strategy in which a company adjusts its service or products based on the area that a particular branch exists in. This strategy works best where there are differences in what customers from different areas want. If a company can identify particular properties of a service or product that would make it suited well for an area, then it is worth considering creating a branch to deliver a tailor-made product. Products like this may succeed even if there are cheaper alternatives. One of the things that change throughout culture is food.   International companies in the food industry have to adjust to the local tastes. Whether due to religion, tastes, or ingredient sourcing, menus will be different.

The localization strategy does miss out in one area, and that is economy of scale. With each branch serving their local area, they cannot take advantage of mass production. Centralizing their production into lower cost areas such as India or China, they miss out on lower labor costs and distributing the overhead costs across more units, lowering the price for customers. This is the strength of a global standardization strategy.

The global standardization strategy makes great use of cost reducing effects. The advantage of this strategy is one of efficiency. Companies are able to offer their products at a lower cost than those who do not use such advantages. The consequence to using such a strategy is the lack of flexibility in their products. There is little concern for local differences using this strategy. Many electronics are the same across the world. There may be differences in the programming for language differences or charging methods, but the devices can be used anywhere.