Globalization vs. localization: Two essentials for market expansion

By Acclaro
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Globalization vs Localization

At first glance, globalization and localization may seem like opposed processes. However, they work together to help businesses reach new international audiences, win over customers, grow, and thrive.  

A closer look at globalization vs. localization

So, what do we mean by these two terms? Simple definitions are:

  • Globalization—The approach an organization takes to expanding beyond the borders of its home country.
  • Localization—The process of tailoring products, services, and content for the specific needs and preferences of customers in a particular market.

While globalization creates a universal framework for doing business across multiple countries, localization focuses on each target market and delivering what those particular customers are looking for.

Globalization: Efficiency, not homogenization

There will always be differences in business conditions and customer needs from one market to the next. An effective globalization strategy isn’t about making everything the same. Think of it as a blueprint for how you’ll build your company’s success across countries and regions. 

There are four primary approaches to globalization:

  • International strategyThis is often the initial approach a company takes when it’s just beginning to expand globally. Businesses following this strategy sell their products or services in new markets without making any significant changes to their offerings, pricing, or operations. They maintain key offices in their home country and standardize how they do business across their markets.
  • Global strategy—This approach focuses on creating efficiencies that lower costs, allowing the company to compete on a price basis rather than by adapting its offerings for local markets. These organizations are typically highly centralized, and their products and services are generally the same in all their markets with very few changes.
  • Multidomestic strategy—These companies pursue the opposite of a global strategy. They build their business by developing a deep understanding of customers in each of their markets and delivering exactly what those customers need and want. Multidomestic companies succeed by tailoring their offerings, operations, and communications to the specific conditions in each country or region.
  • Transnational strategyThis strategy marries aspects of both global and multidomestic approaches. The goal is to be highly responsive to the needs and preferences of local customers while also reaping the benefits of global integration. These companies typically have a central headquarters that coordinates operations internationally and works collaboratively with its teams in each target market. 

Localization: Driving success through customization

Localization is the process of adapting your product or messaging for a particular market. It includes translating text, but goes far beyond that. Localization takes into account everything that’s needed to operate in a specific country—including culture, belief systems, social mores, business conditions, laws, and regulations. 

A well-planned, well-executed localization strategy can unlock significant benefits for your business, including: 

  • Improving the user and customer experience—Adapting software or other products for local customers makes them easier and more efficient to use. When you couple that with high-quality localized content delivered throughout the customer journey, it creates a truly superior purchasing experience that turns first-time purchasers into repeat customers. 

That’s important because customer loyalty is one of your business’s most valuable assets. Your company is 14 times more likely to sell to an existing customer than to a new one, and on average, repeat customers spend 31% more. For most businesses, a mere 20% of their existing customer base drives 80% of their future profits

  • Building brand integrity—When people recognize and trust your brand, that’s good for your bottom line. A reliable, consistent brand experience boosts revenues by 23%. Customers need to understand what your brand stands for and how it’s relevant to them. Investing in localization demonstrates your brand’s commitment to local customers and helps you connect with them in a way that’s both authentic and impactful.
  • Unlocking new revenue potential—Attracting new customers in new markets can open up significant sources of additional revenue. To succeed, you need to meet these prospective customers where they are. That means speaking their language and understanding their culture. In a survey, 76% of consumers said they prefer products with information in their local language, and 66% of B2B buyers would pay up to 30% more for a localized experience. 

Localization connects your brand in a meaningful way to customers everywhere you do business. It’s not surprising then that a strategically focused localization program drives revenue. Companies that invest in localized content are 1.8 times more likely to see year-over-year revenue growth and 2.5 times more likely to experience growth in profits.

3 key differences between globalization and localization

While globalization and localization are both important for international business success, there are some important differences between them, including: 

  • Focus: Globalization aims to create efficiency through international standardization. Localization does the opposite—tailoring products and content to the language, cultural norms, needs, and preferences of a particular audience.
  • Timing: Since globalization is a strategic roadmap, you’ll typically concentrate on it at the beginning of your market expansion. Localization, on the other hand, tends to be an ongoing process. As you launch new products and update your content, you’ll need to tailor them for each market.
  • Adaptability: Localization helps you connect with your audiences by being responsive to their specific needs while globalization, at its simplest, is about reaping the business benefits of uniformity.

Putting both globalization and localization into practice

While globalization and localization differ in many regards, they are each foundational elements for breaking into new markets. A strategically focused team of experts can help you develop a global expansion plan that includes both globalization and localization. Working with a professional localization partner, you’ll start by creating a globalization strategy focused on achieving your expansion goals. Your partner can also help you develop a localization program for customizing your products and messaging to meet the needs of customers everywhere you do business. 

Key takeaways about globalization vs. localization

  • Globalization doesn’t mean delivering the same homogenized products and messaging to all your audiences. When done right, it creates a strategic roadmap, paving the way for your localization efforts to succeed. Working in tandem, globalization and localization can help your company enter new markets, grow, and thrive.
  • While both of these processes are critical for global expansion, they differ in several significant ways, including focus, timing, and adaptability.

A professional translation and localization partner can help you succeed

A fine-tuned globalization strategy and an effective localization program are both crucial for your company’s expansion efforts. Done right, they can help your business unlock new markets, create a superior customer experience that inspires brand loyalty, and boost your revenue potential. An experienced localization partner can help guide the way. 

Our experts work with your company to create a winning globalization strategy and develop a high-performance localization program that will enable you to meet—and even exceed—your expansion goals. Get started today to learn how we can help your business open up new opportunities around the world.

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