Question

In what kind of industries does a localization strategy make sense?

When does a global standardization strategy make most sense?

Please give examples and explain your answers

Answer 1

The answer:

Localization strategy refers to the international strategy in which the organization offers the products as per the requirements of customers. In this type of strategy, the pressure to reduce the cost is negligible, while the focus is on catering to the needs of customers. Localization strategy makes sense in industries such as food and beverages, fashion retail (readymade garments and accessories), and supermarket. In these industries, the companies can source the local material to cater needs of customers. For instance, Pepsi has the products as per the tastes of customers. McDonald’s started selling veg burgers in India due to low preference for chicken and bacon.

Global standardization refers to the strategy where the companies have less pressure to make customized (the product or service as per the tastes and preferences of customers), and high pressure to reduce cost. Global standardization strategy makes sense in electronic goods-producing companies (Smartphones, TVs, Laptops), automobile manufacturing, steel manufacturing, and other business to business product manufacturing industry.

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