Globalization
and
localization
12 examples
Source: http://www.pixelio.de/details.php?image_id=130909&mode=search
Example # 1
For the food industry, where cultural sensitivities
and local tastes are very important, it's absolutely
imperative 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 as
distributors. They travel door-to-door demonstrating
product benefits and selling directly to consumers.
By creating incentives for local retail entrepreneurs
rather than hiring salaried employees or franchise
holders, the company reduces its need to monitor
individual sales performance.
Source
http://www.bcg.com/impact_expertise/publications/files/Next_Billions_Business_Strategies_Enhance_F
ood_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 beyond
just 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 appears
to 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-today
decisions, 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 women
to 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 (called
boreholers) to distribute products to remote
villages with rotational markets (market days) that
are difficult to put into coverage plans.
Source:
Mahajan, Vijay: Africa Rising, p. 90.
In Nigeria, where 3.5 million babies are born every
year, 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 about
baby care.
Source:
Mahajan, Vijay: Africa Rising, p. 135.
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.
Source
https://www.mckinseyquarterly.com/Think_regionally_act_locally_Four_steps_to_reaching_the_Asian_consumer_2436
Example # 4
In Morocco, The Coca-Cola Company sponsored
its own university, teaching shopkeepers how to
use Excel spreadsheets and training salespeople.
Sources:
Mahajan, Vijay: Africa Rising, p. 102.
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 created
extensive educational materials and blister packs with
illustrations 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.
We’ll have automatic translation.
Source
A conversation with Eric Schmidt, CEO of Google. Charlie Rose, March 6, 2009.
http://www.charlierose.com/view/interview/10131
Example # 6
Designed in emerging markets
Sold in Sold in
emerging mature
markets markets
Designed in mature markets
Source
http://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 production
Sources:
http://www.facebook.com/photo.php?fbid=121241324572692&set=a.121241321239359.15968.120902984606526
https://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.
Source
Brugman, 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.
Source
Brugman, Jeb & Prahalad, C.K.: ”Cocreating Business's New Social Compact.”
February 1, 2007. Harvard Business Online.
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.
Source
Brugman, Jeb & Prahalad, C.K.: ”Cocreating Business's New Social Compact.”
February 1, 2007. Harvard Business Online.
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.
Source
Innovation trickles in a new direction.
http://www.businessweek.com/magazine/content/09_12/b4124038287365.htm
Sources
http://www.youtube.com/watch?v=8BvPUcZpGK8
http://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 businesses
from 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 carry
meals 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.
Source:
Mahajan, Vijay: Africa Rising, p. 90.
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 distribute
specialized vaccines to infants in the Philippines.
Source
https://www.mckinseyquarterly.com/Telecommunications/Strategy_Analysis/Capturing_the_pr
omise_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.
Sources
http://www.bloomberg.com/news/2011-01-26/mcdonald-s-no-match-for-kfc-in-china-where-colonel-sanders-rules-fast-food.html
http://resources.alibaba.com/topic/531563/KFC_s_localization_strategy_in_China_.htm
https://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.
Source
https://www.mckinseyquarterly.com/Think_regionally_act_locally_Four_steps_to_reaching_the_Asian_consumer_2436
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.
Source
https://www.mckinseyquarterly.com/Think_regionally_act_locally_Four_steps_to_reaching_the_Asian_consumer_2436
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-colored
appliances, which is why more intense shades do
particularly well in that market.
Source: http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4358