What do localization, internationalization, and globalization mean? What are the differences between those terms? Why do we need to understand them? Are they important?
Before the widespread use of the internet, the world seemed so big. Then, communication between people from different countries was difficult, time-consuming, and very expensive. Because of that, markets were very inefficient, and products were very costly. Compared to the present, the world seemed slow, and everything was expensive.
Today, businesses and consumers better understand each other, and things have greatly improved. In addition, people, businesses, and governments continuously take significant steps to further strengthen the global trading climate. Economies are now moving fast, and companies must see and realize what is happening to keep up with the market and competition.
What is Localization?
In simple terms, localization means adapting to the local markets. It is the process of redesigning business ways, from using local language in brands and labels to reengineering products & services to serve the needs of a locality better, use of local endorsers, etc.
One example is the automobile industry. For many years now, they have been changing their auto designs to adapt to the needs of every market. Visible examples include:
-Selling Right or Left Hand Drive vehicles to comply with local road rules.
-Using local language in the meters, dashboards, car manuals, etc.
-In Sweden, car headlights automatically switch on when you turn the ignition key. However, this is a feature that is not available with the same cars being sold in most countries.
-Companies create country or language-specific versions of their websites to explain their products better and communicate with their clients.
Another example is the restaurant industry, where global franchises provide a local experience through localized menus.
-You look at McDonald’s, for instance. They have country-specific dishes on their menu, such as alcohol (France), macaroni soup & milk (Hong Kong), McSpaghetti (Philippines).
-In the Philippines, KFC, McDonald’s and most international franchises serve rice.
Internationalization is increasing a company’s reach from one to multiple countries. It can be as simple as changing a company name and logo or as complex as establishing overseas production facilities. All those processes are undertaken to make their goods and services appealing and accessible to clients in other countries.
One more example of an internationalization effort is the massive rebranding that Korean conglomerates did in the 1990s. That was when they started to sell to the international market aggressively. They renamed Lucky Goldstar to LG, SunKyong became SK Global, and many Korean businesses were registered with names deemed appealing to the international market. They even redesigned Korean corporate logos to appeal to the eyes of their foreign markets.
Simply put, Internationalization is the conscious rebranding/reengineering effort to make a company appealing to people from more than one country.
What is Globalization?
Globalization is the resulting phenomenon when consumers, businesses, and governments, from all over interact. Globalization creates a single marketplace where people from all countries can transact. It decreases trade barriers, making transactions smoother.
Globalization gives rise to a single inclusive culture. It encompasses business interests and governs how humankind thinks and deals with each other. When businesses and governments interact in a single marketplace, they create and follow universally accepted laws designed to smoothen every transaction. At present, 168 countries are members of the World Trade Organization (WTO). This institute drafts enforceable trade rules for all member states.
There are also significant trade agreements like the ASEAN-China Free Trade Area (ACTFA). ASEAN stands for the Association of South-East Asian Nations. ACTFA mandates zero tariffs on almost all goods sold to members of the ASEAN and China.
Why Localize, Internationalize, and Globalize
- Success in every market- Localization allows your business to provide the products and services your clients in every country need/wants.
- More Clients/Increased Profits- When you provide your clients with what they want/need, they will come to you. More clients should translate to more profits.
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You live in a fast-changing world. Adapt and overcome fast. If you will not serve your customers well, others will.