Standardization and adaptation strategies
As businesses grow, there is a need to enhance the chances of profit-making by expanding the market’s scope of particular products. Mostly, SMEs and domestic businesses face a lot of competition locally, limiting their ability to sell to a broader market within their geographical location. This fact means that the corporation has to venture into international markets, which includes setting base in foreign countries, thus transitioning into a multinational corporation. However, different businesses take various approaches to enable them to grow from a single entity in one country to a massive corporation with subsidiaries across international borders.
Approaches to expansion
One of the most used approaches is standardization. This approach means that the company produces and markets similar products across the borders without making any change to the products whatsoever. Additionally, the company advances its marketing mission by using the same strategies, such as using similar advertising tactics. Also, the company may use a similar culture of organization and management across borders in their different branches. For instance, the coca-cola company, in some cases, has been known to use standardization as an approach by selling the same beverages and packaging in all the countries. Also, his company uses similar advertising strategies, including using the same commercials in various countries where it exists.
Additionally, the culture and norms of the company are similar across borders. For instance, all subsidiaries do not allow the use of children in marketing, which is a norm that does not change in whatever country. Notably, this strategy is a way of creating uniformity in all its market to ensure convenience and efficiency.
Benefits of standardization
This approach has various benefits, which include cost-effectiveness as the company does not spend much in adjusting. The same formula of production is subject to application anywhere without changing the design of products. On the other hand, this approach allows for rationalizing the various products and ensures that products move faster, reducing the risk of dead stock or overstaying of products. On the other hand, there is simplicity in the creation of legal text as a result of the application of similar approaches, even in terms of regulations and ethics. There is the ability. As a result, to create quality, safety, and environmental policies as the view of approach in different countries is the same. However, the most significant advantage of this strategy is that it is easier to establish economies of scale, which involves producing more to earn more.
Adaptation
The other approach that most businesses prefer to use is the adaptation strategy, which involves creating different methods of establishment and operation in different markets. In this case, the companies prefer to develop new products or adjust their packaging to suit the particular market the corporation is targeting. For instance, companies like Toyota produces vehicles that can be used in various markets. However, due to the difference in rules that regulate usage in their different markets, the company has to adjust features like the driver’s side to ensure the product fits the traffic rules and specifications.
Put merely; adaptation ensures that the company focusses on its ability to customize its products to allow its customers to experience what they want. Additionally, the management does not have absolute control of pricing as in the standardization strategy. Different prices are created for the various markets, which points out that the different markets determine how the product is presented to them and at what price through the observation of the business environment. Also, the marketing strategies used are dissimilar according to the culture and the needs of the people in a specific country.
Advantages of adaptation in international marketing
Notably, there is the ability of the company to create and manage a sizeable local image of the company. The company ensures that the market sees the company according to what their culture perceives to be excellent. There is no influence of the native country, which means the local market in various countries sees the company products as relatable. Also, with adaptation, it is easier to manage the specifications of the market as well as learning the expectations according to needs. This fact means it is possible to produce what the market wants, making it easier to sell the products. Additionally, marketing is more efficient as the strategies are more effective and relevant as they are tailor-made for the particular population. It is essential to realize that the main aim of customization is to assure the local market that they are individual as a market catered for. Feeling that they matter, enhances the ability of the business to grow at a faster rate. This advantage can only be realized by applying precision in production and marketing approaches without generalizing as it is done in the standardization strategy of international marketing.
Degree of implementation of the two approaches
Further, it is essential to note that none of the approach9es can be fully implemented on their own without a few adjustments here and there. For instance, it is right to say that the adaptation and standardization strategies are not in themselves an all or nothing proposition. Arguably, these approaches are not cast on stone as they both have advantages and disadvantages where the benefits of one supersede those of the other, and so do the obstacles. Notably, the main aim of any business is profit-making, which ensures that the corporation keeps growing. Therefore, this fact makes it essential to implement the approaches in degree and not as a whole.
The culture of the particular population where the market exists is an excellent determinant of the business’s development. The culture determines what the community views as necessary in terms of usage, and this fact could mean that the market may reject particular products from the company as a result of the product failing to be compatible with their culture. For this reason, heterogeneity is an essential factor of consideration, which hinders the full use of the standardization strategy across borders. Significantly, one culture prefers one product more than another while in another culture, what is least preferred by the others becomes the most relevant product. For instance, in one market, the consumers may fail to favor the use of sugar content in beverages while in another, the consumers may prefer sugar-filled drinks. The unrestricted use of standardization, in this case, could mean that the company and the consumers will be disadvantaged.
On the other hand, the rules differ that is synonymous with culture differ from different markets. For instance, in some countries, the use of plastic materials is banned due to environmental regulations and policies applied in such countries. Therefore, for the company to survive in such a market, there must be full compliance with the rules. In most cases, standardization [demands that the company uses the policies of the native country, which limits the management as it is not possible to work oblivious of local policies that govern the market in the countries where subsidiaries exist. For instance, a company like coca-cola is forced to change the methods and materials of packaging, including avoiding the use of plastic containers. This fact indicates that there is a mixed-use of adaptation and standardization approaches.
Further, heterogeneity affects the strategies of marketing, significantly causing the need for a company to involve different tactics to survive and expand. For instance, different communities have different views on modes of dressing and thus different descriptions of decency. This fact could mean that a commercial done in one country could be viewed as inappropriate in moral terms in another country. This fact could be more relevant in the Middle East countries where the regulating bodies and the local community could resent products that are advertised with the incorporation of sex appeal. The difference in religious and cultural beliefs, in that case, demands that a company must consider the implementation of standardization to a certain degree and not absolutely. It is significant to note that a company may also approach this implemen0tation by being ethnocentric. The management’s ethnocentric orientation means that the company only expands to countries with similar regulations and cultures as the native country. However, this approach denies the company a chance to explore better markets.
On the other hand, the enormous costs of implementation that are characteristic of the adaptation strategy make it only logical to implement to a certain degree and not absolutely. For instance, the creation of new products is an expensive procedure that could cost the business, making it difficult to maintain the production of new products to suit every county. Additionally, the adjustment of these products to satisfy the market demand that the design must be changed. This procedure of adjustment is in itself financially straining as well as time-consuming in most –instances. These funds could be saved by implementing both approaches. For example, where a product design is least likely to be affected by the rules or usage, the company could avoid alteration. For example, even in countries that do not use American traffic rules, car manufacturers still produce cars that have steering wheels on the wrong side. A company like Hyundai sells vehicles regardless of the steering wheel placement, which means that they spend less in adjusting both financially and time-wise.
Importantly, a company could suffer loss more by failing to tap on the advantages that it could gain from the standardization of products and strategies. One of the primary benefits of this approach is the economies of scale. It is risky for a company to produce a large volume of products in different designs than it is for one to mass-produce a standard model for all the subsidiaries. This fact indicates that relying on the adaptation approach alone could cost a company. This fact is connected to the fact that standardization ensures that products move fast, avoiding too many products in the store. This benefit could make it more profitable for a company to use both approaches in prod6uction. Creating different products to suit every culture and population means that it will limit itself to a specific area in which to move each product. In consideration, this fact indicates that while a polycentric orientation would be crucial, the use of global marketing where the world is viewed as a vast market could be more cost-sensitive and more profitable.
The other advantage of standardization, which makes full use of adaptation unnecessary, is the perfect observing of communication. It is much easier to monitor the transmission of information where similar means and channels of communication to the consumers and within the organization is the same. As for the adaptation approach, the various subsidiaries adopt different mechanisms of communication, which is difficult to determine whether one mechanism is valid or not. Additionally, it is significant for the business to establish a brand that is recognized internationally. This consistency can only be achieved by creating one image across borders, which is ensured by the standardization strategy. Also, it’s essential to consider that global integration helps to measure how a company can use similar products and methods in several countries. This fact emphasizes the importance of standardization, even where adaptation is applied.
In conclusion, both standardization and adaptation strategies have their benefits and disadvantages. However, their implementation creates the need for the company to gain more without losing in the market as a result of the approach taken. Arguably, global integration is critical, as it ensures the use of similar methods and products to avoid costly adaptation methods. In both strategies, implementation is a matter of degree.