Standardisation Versus Adaptation in a Globalisation Context

2468 WordsOct 8, 201210 Pages
Standardisation versus Adaptation in a Globalisation context Challenge This is the challenge facing primarily multinational firms whether to standardise their local offering or adapt/localise it for the market they are selling into. According to De Wit and Meyer (2010), the question facing managers is whether they should anticipate and encourage global convergence by emphasising global standardisation, centralisation and coordination or should managers acknowledge and exploit international diversity by emphasising local adaptation, decentralisation and autonomy. In other words as St Augustine (534-430) put it “when I am in Milan, I do as they do in Milan; but when I go to Rome, I do as Rome does”. Technology influencing standardisation…show more content…
Getting cross border synergies on a large scale can be a way a firm gains competitive advantage over its rivals. Firms can achieve this by leveraging activities, integrating activities and/or aligning positions. This can be seen in the below figure as argued by De Wit and Meyer. Cross Border Synergies Know your Market However, for the success of a firm operating in a global environment, they must remain aware of the specific demands of the local market and equally important be in a position to respond to these configurations in a timely manner. A company must know the differences in market structure, differences in customer needs, differences in buying behaviour, differences in alternative products, government regulations etc. If a firm is not responsive to the nuances of the local market then there is a risk of failure despite taking a standardised approach. According to Levitt’s article “The Globalisation of Markets, increased standardisation is in essence the world moving towards a converging commonality. Everything is becoming more similar or homogenised. This is where technology is coming to an increasing importance. Levitt argues that Standardisation decimates competitors that live in the old way of doing things. Multinationals and
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