The impact of culture on international business, has led to the emphasis of the concept of glocalization. The following reasons, highlight the importance of adopting a strategy tailored to a particular culture in international business. This reasons are:
– International marketing scheme is affected by globalisation and cultural differences.
Cultural distinctiveness has affected strategies adopted in international management. A given strategy in a particular culture is unlikely to yield the same result in another cultural background or environment.
– An understanding of the difference between macro and micro environment has been of great help in strategies of international interventions.
– Cultural distinctiveness has a great impact on consumption of goods and services. A clear understanding of this, helps international organisations to properly analyse the market and suggest ways to properly meet consumers needs and demand.
A case study of the global strategy of McDonald’s reveals the concept of ” think global and act local” (glocalization).
McDonald’s was able to attract its French customers by introducing some local menus that suits the French taste bud. When McDonald’s first came into France, it faced lots of oppositions. The difference in food culture between the French and the Americans was very wide. The French preferred home made kind of food rather than fast food meals. Secondly the French were sentimental towards accepting the American life style. The Mistake McDonald’s made was that it positioned it self as an American fast food company, introducing American menus and way of life to the French. As a result, the French were not willing to accept its brand. Based on this, there was need for McDonald’s to restrategise. McDonald’s later discovered the importance of children in influencing family decision, and therefore, positioned itself as a family restaurant rather than a US brand restaurant. This strategy was powerful because it was the only brand at that time that recognised the family.
The moment McDonald’s started positioning itself as a place for the modern French family, it started to experience an increase in growth. This was the turning point for McDonald’s in France.
However, the success of McDonald’s was not completely smooth without hitches. In 1999, an irritated farmer named Jose Bove, began a protest against the insurgence of junk food. He took his tractor along with some other farmers and demolished the McDonald’s branch in his local area. This protest by Jose brought the attention of the French president who openly condemned the role of US within the global food industries.
The opposition by Jose led McDonald’s to adopt a transparency policy campaign with farmers to explain to them what it is doing to improve relations among them.
Secondly, McDonald’s started paying attention to local details. It discovered that the French do not have the habit of snacking. It had to adopt recipes which the French liked to its menu. It added French pastries and cakes to its menu, and this was a big boost to its sales. Also, it had to ensure that French franchise only prepare fries from a particular specie of French potato. This strategies adopted by McDonald’s made the French to accept its global brand because it had a local taste and feel.
Also, the global fast food McDonald’s, survived and grew in India by developing innovative menus to cater to Indian taste bud. When McDonald’s first came to India, it had strong oppositions from nationalist. Despite this opposition, it had a growth plan to double its turnover every three years in the next decade.
The managing director of McDonald’s in India, Vikram Bakshi, said that in order to survive in India, it had to change its strategy. Seventy percent of its product had to be developed to suit the Indian market. In India McDonald’s was very careful not to offer pork or beef based on the country’s sensitivity to these items.
McDonald’s faced a very big challenge on how to reach out to the Indian large vegetarian population, and still maintain its national brand. Hence, in 1999, it came up with a new brand of burger called the “McAloo Tikki Burger”. This burger has never been heard of any where in the world. Today, the McAloo tikki burger is the single highest selling product and one of the first product to be exported to the middle east.
McDonald’s archived its success in India and world wide because it used both global and local strategy in marketing its products. It had different designs for different countries depending on their culture, as in the case of India.
McDonald’s also takes into consideration the laws of the country they find themselves. For example, in Spain beer is sold in McDonald’s outlets, while in Great Britain it can’t because it will need a separate license to sell alcohol.
This case of McDonald’s shows that in order to succeed globally, intercultural differences should be taken into consideration in the strategy adopted by international organisations.
In conclusion, cultures affect the strategy adopted by international organisations. These cultures vary, therefore the strategy adopted in country A should be different from the strategy adopted in country B.
In addition, global brands has been able to evolve cultures to a certain degree, and cultures has in turn, affected the nature of global brands.
In line with this, people hold certain element of their culture in high esteem and are not willing to let go of it. However, they are willing to accept foreign influences only if it is able to portray certain aspect of their culture, making them have a local feel.
As a result, for international organisations to succeed globally, it is important to pay attention to local needs, while maintaining a global brand.
Therefore, as you deploy a market entry strategy into foreign markets, it is important to adopt the concept of “think global and act local”.