Standardized vs localized strategy
Localization (multidomestic) strategy is characterized by customized products for particular market segments. The strategy seeks to adapt products and marketing strategy to the specific characteristics of individual markets. This strategy is effective when there are clear differences between national and regional markets and low pressure for cost reduction. We can choose MTV as an example of a company, which eight TV channels in Western Europe each in a different language.
Advantages:
1. Increased revenue and market share
2. Expedited local business development
3. Responsiveness to local needs and market contexts
Disadvantages:
1. High costs due to the duplication of efforts in multiple countries.
2. Each subsidiary regards its country is so unique that it is difficult to introduce corporate-wide changes.
Global Standardization strategy is characterized by global commonality where corporations sell the standardized products in the same way everywhere. Standardization is built on the premise that, customers will prefer the world standardized products of the company that is able to push costs and prices down while at the same time maintaining suitable concern for suitability. GSS may designate “centers of excellence”. Centers of excellence are often given a worldwide mandate, which is responsible for MNE function throughout the world. For example, HP’s Singapore subsidiary is the center of excellence of the company.
The advantages of GSS include: economies of scale in production and marketing, transfer of experience or know-how, uniform global image and easier control and co-ordination.
The disadvantages of GSS include: standardized products are over designed for some countries and under designed for others, it tends to undermine company networks that already exist.
Advantages:
1. Increased revenue and market share
2. Expedited local business development
3. Responsiveness to local needs and market contexts
Disadvantages:
1. High costs due to the duplication of efforts in multiple countries.
2. Each subsidiary regards its country is so unique that it is difficult to introduce corporate-wide changes.
Global Standardization strategy is characterized by global commonality where corporations sell the standardized products in the same way everywhere. Standardization is built on the premise that, customers will prefer the world standardized products of the company that is able to push costs and prices down while at the same time maintaining suitable concern for suitability. GSS may designate “centers of excellence”. Centers of excellence are often given a worldwide mandate, which is responsible for MNE function throughout the world. For example, HP’s Singapore subsidiary is the center of excellence of the company.
The advantages of GSS include: economies of scale in production and marketing, transfer of experience or know-how, uniform global image and easier control and co-ordination.
The disadvantages of GSS include: standardized products are over designed for some countries and under designed for others, it tends to undermine company networks that already exist.