How Global Brands Are Localizing their Growth Strategy

Category: International Business

It’s one thing to localize your products so they don’t come across as foreign forces of imperial capitalism, but quite another to finesse an approach that fosters real affection and trust with international customers. For some brands, it’s a matter of recognizing the right offering at the right time. For others, it’s about customizing the introduction. IKEA home furnishings, Under Armour athletic wear, and Estée Lauder’s M.A.C. cosmetic line have all managed to take a global product offering and make it local for markets around the world.

IKEA in China

China hosts eight of IKEA’s ten largest stores. The Swedish company’s decision to move into China coincided with the rise of the country’s middle class, and the strategy has paid off well. As middle class wealth lifts millions out of poverty and into the cities, IKEA has positioned itself as an obvious, affordable choice for those looking to furnish their new flats. IKEA reports that China is now the company’s fastest growing market,while other markets have cooled. The Swedish home furnishings giant accommodates the local tendency to make the IKEA shopping experience an all-day affair by adding extra display rooms and encouraging naps.

Under Armour’s European Game

Though 94% of Under Armour’s revenue came from North America in 2013, the company is eager to shift at least 12% to international markets by 2016. An underdog in the athletic shoe and apparel game, Under Armour will need to not only attract international customers, but also broaden its product line in order to appeal to more buyers.

The company has initially set its sights on Europe.While the U.S. play has been largely centered on local sports such as American football, Under Armour made the decision to sponsor European soccer clubs,including England’s Tottenham Hotspur. They’ve also branched out into rugby,scoring a deal with the Welsh national rugby team. While their reputation in these sports is still new, they hope to spread to Latin American markets with the same strategy. Initial reports in Q1 2014 were promising — sales outside of North America rose to $59 million, representing 9% of total sales compared to just over 6% the previous year.

M.A.C.’s Inclusive Look

“All Races, All Sexes, All Ages,” has long been M.A.C.’s mission statement, and it’s a good one if you want to welcome the world to your stores. The company saw an opportunity in catering to under served minority women who couldn’t find cosmetics that worked with their skin tone. This approach made them a natural fit for expansion into Brazilian retailers in 2002. Since then, they’ve had enormous success, and there are now at least 30 stand-alone M.A.C. stores in the country.

Now M.A.C. has moved into West Africa, testing out their entry-level cosmetics in Nigeria. While the country has financial and political challenges to overcome, M.A.C. is eager to open a second store there soon. The cosmetics giant has introduced itself to West African women through the local music and film scene as well as via charitable efforts to raise money to fight HIV.

So how will you tailor your global growth strategy to specific international markets? As IKEA, Under Armour and M.A.C. demonstrate,the approach can vary widely — from capitalizing on local economic trends to investing in entertainment and supporting social causes. Acclaro can help you plan for your first move. Contact us today for more info or a free translation quote.