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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, Nestl 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, Nestl'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

Nestl 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 Nestl, 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 CocaCola, 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 solarpowered coolers. Were looking to expand that to other
markets. Theres great engineering talent in India.
Another product that shows promise is Minute Maids
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.

Well 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
mature
markets

Sold in
emerging
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

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

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

McDonalds 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.
LGs product innovation center in Bangalore is the
companys 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

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