The debate about standardization and adaptation for international markets has continuously attracted more attention from multinational companies for several years. The case of IKEA has however tried to help me in understanding the argument involving these two marketing strategies as applied in the international markets.
In global marketing strategy, standardization involves selling products or offering services which are similar, with the same advertising and promotional methods, pricing and location strategies in different countries of the world. On the other hand, adaptation involves selling products or providing services that have various features based on the different markets in varying nations to satisfy the human needs or wants
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Despite the measures of ensuring that the business maintains a uniform product approach across the globe, the management has assured that it creates different catalogs with different languages to cater for different market targets. For instance, the company prints 212 million records which are in 32 languages and 67 versions to ensure that they satisfy the needs of consumers who have different cultures. This strategy assists the company to have a more significant market share thus improving its sales volume and profit margins. Moreover, it facilitates the company in analyzing the individual market requirements to cater for consumers thus making the consumers feel recognized (Spielmann &Delvert, 2014).
IKEA has to help me to understand that it would be better for a multinational firm to collaborate the two marketing ways to enjoy many benefits and remain relevant in the ever-changing technological world of business. Cultural differences remain to be one of the critical issues affecting companies that are operating in different countries in the world because marketing strategies that work well for one country may turn to be the worst in a different state. Therefore, multinational firms must undertake an in-depth research to ensure they employ the best business strategies before moving to new markets.
Companies who want to penetrate in the international markets must understand whether the potential
It was in the Fordism era in the early 19th century where standardization was the most widely used strategy across the industrialized countries (Johansson, 2000). Henry Ford when he manufactured Ford Car, the company produced only black Ford. Standardization refers a company providing the same identical product across the globe (Keegon, 2002). Most of the time they are considered to be global brands (Johanson, 2000). Some of the example that could be considered global brands is Coca Cola, McDonalds or Amazon. However, they too have some degree of adaptation in taste or price when it comes to marketing in a different market.
Cultural differences between nations often require a company to have multiple marketing strategies. What may be acceptable in on country may not be acceptable in another country. The cultural differences require companies to develop marketing plans that are suitable for each individual culture. Not being aware of and understanding the cultural differences can create costly and embarrassing errors that may actually offend those in other countries. Cultural differences can affect the colors of products, the graphics used on packaging, and how the product is communicated to the foreign target market.
Standardization, in case of international or multi-national businesses, broadly refers to the process of using the same strategies throughout the business operations in all of the markets. Adaptation, on the other hand, refers to the strategy of fine tuning the brand methods of a business and customizing them to suit each of the markets.
Every country differs in culture which has been there for centuries. The international market is growing rapidly, with more and more multinational organisations entering new markets each day. In this assignment I will evaluate how the difference in cultures affects the performance of international businesses.
Task 2c: Evaluate the impact of cultural differences on international business performance in the international market D2
The article is divided into four parts. First part focuses on the traditional perspective on international marketing strategies focusing on the dichotomy between standardization and adaptation. The second part examines key assumptions underlying the philosophy of global standardization. The third part focuses on the constraints to implementation of global standardization. The last part of the article concludes on the bases of its review that a more general approach is suitable which incorporates various degrees of standardization or adaptation strategies. It is an important article as it concludes that an effective global marketing strategy does not guarantee the marketing of standardized products and global brands worldwide. It might work for some companies but cannot work for all.
Doing business in such different countries ask you to be flexible and need to be able to adapt quickly to the local demand and cultural differences. Your strategy has to be adapted to the ethical standards, cultural norms, but also the way the business is going locally. In others world, the company has to localize its distribution and marketing strategy to the requirements of the local market.
When starting an internationalization process, companies must take into account that they will have to adapt their products and marketing process in order to get the attention of customers in the new market.
The success of the industry was the huge experiences in the product differentiation, cost leadership and retail market. IKEA unique concept is that furniture is sold in kits that are assembled by the customers at home. The company remains one of the world most successful multinational retailing firms, operating globally. This report will explains IKEA internal and external environment using PESTLE, PORTER FIVE FORCE AND SWOT. Furthermore IKEA globalisation and localisation strategy breakdown will be examined, CSR and ethic and recommendation will be also examined.
Making business abroad can be risky, but it can also be profitable for a company as well; thus the necessity to study in deep the country where the company will bring the business to. International companies are faced with many cultural challenges, when doing business across and inside of different borders. Identifying the significant cultural issues involved when evaluating the attractiveness of a particular location as a place for doing business can be crucial for a business. Aspects to consider when studying culture in a new place
The progress of humanity and human beings can be attributed to one important factor and that is the strong capability of human beings to understand and adapt to cultural differences. Respecting cultural differences has brought the human beings close together and has tied them in a strong bond. The conquering of the cultural differences has also introduced us to a new terminology, global economy, which is a global system of production, distribution and consumption. The world has become a singular unit because the pace of economic development has accelerated due to an increase in marketing not only at a local level, but also at a global level. Global
The Coca-Cola Company is the world’s leading beverage company, with markets in over 200 countries and over 1,100 brands under their portfolio. The company was founded in 1886 and is currently headquartered in Atlanta, Georgia, USA. This paper seeks to explain the impact of globalization on the standardization versus adaptation decision using examples from the Coca-Cola Company’s performance and strategies since their inception as a company.
Cultural issues different customers in the global market have different culture and this calls for a different strategy to handle their needs
The literature on international marketing presents a confrontation between two mainstream schools of thought regarding international marketing. The one supports the standardization approach and argues that multinational companies’ behavior should be uniform to minimize total costs and promote a global corporate image. The other argues for the need for adaptation to fit the unique dimensions of each local market. This research investigates companies’ practical level of adaptation and standardization in international markets. It identifies
According to the works of Chaney & Martin (2011) and Harris & Moran (2000), they agree that international management skills are in need for the increasing scope of international trades and investments. A large number of multinational companies have expanded their businesses through both developed and developing countries. Some of the business invest directly and others are partnership arrangements and strategic alliances with domestic operations. Their studies show that independent entrepreneurs and small businesses have started investing and competing in the world marketplace. Thus, to acquire corporations’ objectives, there is exceedingly a necessity for the development of strategic framework for cross-cultural management and communication in the current competitive global market. Chaney & Martin (2011) also noted that, cultural awareness and cultural differences are strongly important to the multinational corporations’ success. A good understanding of the culture where business is implemented can make international managers productive and effective.