Globalization and Localization Quiz
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Questions and Answers

ESET was recognized as the 'IT company of the year' in Slovakia in the years 2002 and 2006.

True

ESET's revenue for 2015 was reported as €1 billion.

False

The concept of local adaptation refers to modifying products and services based on global standards.

False

ESET is recognized worldwide, with half a billion people knowing its brand by 2012.

<p>True</p> Signup and view all the answers

The motto 'Think GLOBAL, act LOCAL' describes a glocal strategy.

<p>True</p> Signup and view all the answers

Globalization refers to the integration of goods, technology, and labor on an international scale.

<p>True</p> Signup and view all the answers

Localization involves the creation of a standardized product that suits all local markets.

<p>False</p> Signup and view all the answers

Glocalization is about integrating both global and local considerations in marketing strategies.

<p>True</p> Signup and view all the answers

McDonald's uses a global strategy for its menus across all countries without making any adaptations.

<p>False</p> Signup and view all the answers

In glocal strategies, products are standardized while promotions are customized to suit local markets.

<p>True</p> Signup and view all the answers

Multinational corporations (MNC) have only a local reach and limited influence.

<p>False</p> Signup and view all the answers

Traveling across the Atlantic used to take about two months in the 1800s.

<p>True</p> Signup and view all the answers

Governments have increased tariffs and regulations on international trade.

<p>False</p> Signup and view all the answers

The globalization of markets enables the merging of separate national markets into a unified global marketplace.

<p>True</p> Signup and view all the answers

The globalization of production refers to sourcing goods solely from the home country.

<p>False</p> Signup and view all the answers

In the production of Boeing's 777, a significant portion of its components is made by foreign suppliers.

<p>True</p> Signup and view all the answers

Walmart's focus on the Asian market is primarily designed to counter insufficient finances.

<p>False</p> Signup and view all the answers

Coca-Cola and PepsiCo are examples of companies that frequently compete in global markets.

<p>True</p> Signup and view all the answers

Globalization has led to a decrease in economic interdependence among nations.

<p>False</p> Signup and view all the answers

The Uppsala model suggests that companies should establish foreign production units before any export activities.

<p>False</p> Signup and view all the answers

Stopford's model recommends analyzing foreign market advantages before establishing a manufacturing branch.

<p>True</p> Signup and view all the answers

ESET is headquartered in Montreal, Canada.

<p>False</p> Signup and view all the answers

One of the early viruses that ESET developers tackled was called 'Vienna'.

<p>True</p> Signup and view all the answers

ESET provides security software in over 300 countries and territories worldwide.

<p>False</p> Signup and view all the answers

The Dunning eclectic approach is one of the internationalization theories mentioned.

<p>True</p> Signup and view all the answers

The price range of the Boeing 777 is between 258 and 316 Million USD.

<p>True</p> Signup and view all the answers

ESET's software is available in more than 30 languages.

<p>True</p> Signup and view all the answers

Globalization refers exclusively to the reduction of international trade barriers.

<p>False</p> Signup and view all the answers

Technological change plays a critical role in the globalization of production.

<p>True</p> Signup and view all the answers

International business refers only to companies that operate domestically.

<p>False</p> Signup and view all the answers

One of the cons of globalization is the creation of social polarization between rich and poor individuals.

<p>True</p> Signup and view all the answers

Walmart's global expansion has been achieved through strategic entry modes.

<p>True</p> Signup and view all the answers

The sharing of technology is a benefit of globalization.

<p>True</p> Signup and view all the answers

Ecological disasters are considered a benefit of globalization.

<p>False</p> Signup and view all the answers

The weight of BONO cookies was reduced from 200 g to 149 g in Brazil.

<p>True</p> Signup and view all the answers

After reducing the weight of BONO cookies, Nestlé Company experienced a 20% decrease in sales.

<p>False</p> Signup and view all the answers

Avast Free Antivirus operates under a premium-only pricing model.

<p>False</p> Signup and view all the answers

Adapting marketing strategies locally can help increase brand relevance to consumers.

<p>True</p> Signup and view all the answers

The glocal strategy only focuses on global marketing without any local adaptations.

<p>False</p> Signup and view all the answers

In Brazil, Avast adopted local currency and payment methods in its market strategy.

<p>True</p> Signup and view all the answers

The conversion rate for Avast in Brazil increased from 2% to 3% after local adaptations.

<p>False</p> Signup and view all the answers

Word-of-mouth advertising is considered unpaid promotion.

<p>True</p> Signup and view all the answers

Study Notes

Globalization

  • Globalization is a process of interaction and integration among people, companies, and governments of different nations.
  • It is characterized by worldwide interdependence.
  • It involves politics, the economy, culture, society, ecology, trade, and communication.
  • Globalization is worldwide.
  • Multinational corporations (MNCs) have increasing global reach.
  • Travel and shipping have become cheaper and safer, significantly faster than in the past (two months to cross the Atlantic in 1800 vs. 5 hours by plane and less than a week by ship today).
  • Governments have reduced tariffs and regulations on international trade resulting in free trade.
  • Globalization of markets refers to the merging of historically distinct and separate national markets into a single huge global marketplace, facilitated by falling barriers to cross-border trade.
  • Global consumers equal a global market.
  • In many global markets, the same firms frequently compete in nation after nation (eg. Coca-Cola vs. PepsiCo, Boeing vs. Airbus, Sony vs. Nintendo vs. Microsoft).
  • Globalization of production is the sourcing of goods and services from various locations around the globe to take advantage of national differences in cost and quality of factors of production (labor, energy, land, capital).

Globalization – Pros

  • Free trade, new jobs, and increased competition among companies results in lower prices for customers.
  • Sharing technology, the development of technologies, and research and development (R&D).
  • Easier travel and mass communication.
  • Easy to sell and buy products and services.
  • Influx of information between countries.

Globalization – Cons

  • Rich versus poor people (social polarization).
  • Multinational corporations are accused of social injustice, unfair working conditions, including slave-labor wages and poor living conditions.
  • Developed countries lose jobs to lower-cost countries.
  • Terrorism and data protection.
  • Ecological disasters.

Globalization of Production

  • Japanese suppliers make parts for the fuselage, door, and wings of the Boeing 777.
  • A supplier in Singapore makes the doors for the nose landing gear
  • Three suppliers in Italy manufacture wing flaps.
  • In total, 30% of a Boeing 777, by value, is built by foreign companies.
  • Price of Boeing 777: $258 – $316 million USD.

Internationalization

  • Doing business in many countries of the world, but often limited to a certain region (e.g., Europe).
  • International business: any company that engages in international trade or investment.
  • Should the company stay at home or go abroad?

Internationalization Theories

  • The Uppsala internationalization model involves small, incremental commitments to new markets, choosing entry modes with few risks and avoiding large distances.

  • Stopford's model of internationalization describes gradually entering foreign markets, starting with exports and eventually creating owned subsidiaries abroad.

  • Dunning's eclectic approach: a framework for analyzing foreign direct investment.

  • Uppsala Model Stages*

  • Stage 1: no regular export activities (sporadic export).

  • Stage 2: export via independent representatives (export modes).

  • Stage 3: establishment of a foreign sales subsidiary.

  • Stage 4: foreign production/manufacturing units.

How to Build a Global Business-ESET

  • ESET is an IT security company that develops leading-edge security solutions against cyber threats.

  • Headquartered in Bratislava, Slovakia.

  • Branches/research centers around the world (San Diego, California, Prague, Buenos Aires, Singapore, Jena, Sydney).

  • Research centers: Krakov, Montreal, Moscow.

  • Founded in 1987.

  • One of the first PC viruses: "Vienna" (M. Trnka + P. Paško).

  • Later NOD 32 – one of the most famous and most used antivirus software, selling solutions worldwide in over 200 countries and territories, localized into more than 30 languages.

Competitors of ESET Worldwide

  • Symantec
  • McAfee (An Intel Company)
  • Avast!
  • AVG
  • Kaspersky

Strategic Years

  • 2002, 2006: "IT company of the year" in Slovakia
  • "Fast 50 CE" and "Fast 500 EMEA" (Deloitte).
  • 2008, 2009, 2010, 2016: Trend magazine "Company of the year."
  • 2012-2015: one of the top 10 employers of the year in Slovakia
  • 2012: half a billion people worldwide recognize the brand ESET
  • 2014: San Diego, Slovak American Innovation Centre.

ESET Today

  • Richard Marko: Slovak CEO 2015 (Forbes).
  • Company revenue: €526 million.
  • 22 branches worldwide (2019 – Italy, Milan).

Critical Thinking and Discussion

  • What kind of famous global products are possible to buy in your home country?
  • Prepare a list of companies from your home country that run their business worldwide and are adapted around the world.
  • How does the Internet affect international business activity and the globalization of the world economy?

Global vs. Local

  • Coca-Cola vs. KOLA.
  • Coca-Cola global advertising (using standardized products) vs. local advertising (adapting products, advertising to local tastes).

Local Adaptation

  • Final modification of products and services to meet local customs.
  • Adapting products and services to national customs and traditions in all areas, from product design and quality to customer services and advertising.
  • A great opportunity to profit from progression.
  • Caused by individual region and country market and know-how requirements.
  • Adapting is important for products, advertisements, packaging, and communication and adapting for local customs, traditions, and geographical conditions.

Coca-Cola in Brazil

  • Coca-Cola adapted to the Brazilian market.
  • They sell the Guarana drink.
  • This is a major example of adapting global products to local tastes.

Heineken Marketing

  • Heineken adapts its advertising campaign to different local markets.
  • Using local advertising styles in each country or region of the world.

Brand Zlatý Bažant

  • The brand, on TV, is associated with the company and is adapted to appeal to that country's local customers.

Glocal Strategy

  • Think GLOBAL, act LOCAL.
  • Taking advantages of globalization and standardization and localization (differentiation).

Global-Local-Glocal Strategy

  • Global: thinking globally, acting globally
  • Local: thinking locally, acting locally.
  • Glocal: integrating both localism and globalism

Framework for Alternative Global Marketing

  • Globalization: International integration of goods, technology, information, labor, and capital.
  • Localization: Adapting to local appeal, culture, communication, and needs.
  • Glocalization: Combining global with local—e.g., a worldwide brand adapting products and service offerings to local specific market needs.

McDonalds Adapted Products Worldwide

  • McDonald's adapts its products to different markets and local tastes, for example: The Chicken Maharaja Mac (India) and McArabia (Middle East).

Cadillac Adaptation for China

  • Cadillac adapts vehicles to the Chinese market.

Coca-Cola Adapted Drinks in Japan

  • The company sells Sokanbicha in Japan. This is a major example of adapting global products to local tastes.

Learning Case

  • Case studies of how global products are adapted to local market needs.

Nestlé Company for Japanese Market

  • Nestlé adapts its KitKat products to local tastes and preferences (strawberry, melon, etc.).

Nestlé Company for Brazilian Market

  • The weight of Bono cookies varies in the Brazilian market.
  • The company recorded a 40% increase in sales. This is an example of local adaptation impacting sales.

Red Bull for Chinese Market

  • Red Bull in China has a local adaptation.
  • The company's logo, packaging, and advertising are tailored to appeal to Chinese consumers and local tastes and preferences.

Avast!: Czech Security Software Company

  • Avast is a Czech security software company founded in 1988.
  • The company utilizes the freemium model for pricing.
  • They have over 180 billion active users globally.

Freemium Model

  • A business model in which a core product is given away for free and premium products or paid services are offered to a smaller portion of users.

Word-of-Mouth

  • Verbal reference and personal recommendations are a way to spread the word among existing and potential customers without advertising.

Think Local - Steps of AVAST - Brazil

  • Language adaptation: Changing to Portuguese.
  • Using local currency: using the Brazil real currency.
  • Method and form of payment: adapting to installments and cash-based payments.

Advantages of Glocal Strategy

  • Gaining a strategic advantage for establishing a strong position in foreign markets.
  • Building positive relationships with local customers.
  • Creating a stable and reputable position, not only for product brands, but for the company as a whole.
  • Achieving profitable growth.

P. Kotler on Glocal Marketing

  • Customers perceive the brand as relevant, tailored to their particular needs.
  • There is harmony and balance in strategic, tactical, and operative marketing activities.
  • Brands that implement global-local strategies increase market share.

International Business Strategies (framework)

  • Shows different approaches to globalization (global, transnational, international, multidomestic) based on the level of integration/responsiveness

Multidomestic

  • Low integration and high responsiveness strategy

Global

  • High integration and low responsiveness strategy

International

  • Low integration and low responsiveness strategy

Transnational

  • High integration and high responsiveness strategy

Assignment NO. 1

  • Teamwork (3 students maximum).
  • Topic: Local adaptation of international companies.
  • Submit via MS Teams (one submission per team).
  • Presentation Date: October 17, 2023.

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Globalization and Local Adaptation PDF

Description

Test your knowledge on globalization, localization, and glocal strategies with this engaging quiz. Learn about the impact of companies like ESET and McDonald's in adapting their products for local and global markets. Discover key concepts and terminology related to international business tactics.

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