Globalization

vs
Glocalization

PRESENTED BY:

GAYATRI DAYANI – 409

ROMI JINDAL- 408
TANYA JAIN- 407
TUSHAR MAHENDRU- 406
VIBHOR- 048
Introduction
to
Globalization
 Definition
Globalization refers to a process by which national and regional economies, societies, and
cultures become integrated through the global network of trade, communication, immigration
and transportation.
Basically, it is the integration of markets in the global economy, leading to the increased
interconnectedness of national economies.

Markets here might refer to financial markets, such as capital markets, money and credit
markets, and insurance markets, commodity markets, including markets for oil, coffee, tin, and
gold, and product markets, such as markets for motor vehicles and consumer electronics.
World economy being globalised implies that whole of the world is increasingly behaving as it
were a part of a single market.
 Types of
Globalization
• Financial Globalization
• Economic Globalization
• Technological Globalization
• Political Globalization
• Cultural Globalization
• Ecological Globalization
• Sociological Globalization
 1. A smaller share of goods is traded across borders
Trade is still growing in absolute terms, but a smaller share of the
physical goods made worldwide is now being traded.
2. Services trade is growing 60% faster than goods trade
When we think of trade, we often focus on the trade of physical
goods (i.e. autos, aerospace, oil). However, services are becoming
Changes in increasingly important to the global economy – and if accounted for
properly, it’s possible that the value of services is closer to $13.4
trillion, which is higher than the total goods trade.
Globalization 3. Labor-cost arbitrage has become less important
It’s a common perception that trade flows are driven by companies
over the years searching for low-cost labor. However, nowadays, only 18% of the
goods trade is based strictly on labor-cost arbitrage.
4. R&D and innovation are becoming increasingly important
Companies are spending more on R&D and intangible assets such as
brands, software, and IP as a percentage of overall revenue.
5. Trade is becoming more concentrated within regions
The geography of global demand is changing as emerging markets
consume a higher percentage of total goods.
Globalization 4.0
There have been various phases of globalization before reaching
to the present version of 4.0.
The first, dating from 1820-1914 came alongside the advent of
steam power and the industrial revolution while the second lasted
from the end of World War 2 to roughly 1990. That’s when we
entered the latest era – a period of what some have dubbed
“hyperglobalization” coinciding with the advent of the internet
and the rise of emerging economies such as China and India.
Finally, we have entered into the fourth wave of globalization and
it can be described as - If all previous waves were about the trade
in goods then this one is about digitally-enabled services (Robotics
and AI).
Globalization 4.0 could, like preceding waves of globalization,
have mixed results: economic growth and poverty alleviation on
the one hand, and political crises and greater income inequality
on the other.
 In contrast to Globalization, the Glocalization strategy, which means
thinking globally but acting locally, is a more modern and different
approach. It is the adaptation of global and international products, into
the local contexts they're used and sold in.

The term was coined in the Harvard Business Review, in 1980, by

Definition sociologist Roland Robertson. The term is used to describe a product or
service that is developed and distributed globally, but is also adjusted to
accommodate the user or consumer in a local market.

Products that are ‘glocalized’ are going to be of much greater interest to

the end user because the integration of localization and globalization
makes the product more specific to the needs of the people. For example,
in India, a country in which the cow is sacred, the menu features
McVeggies instead of hamburger. Glocalization works better for
businesses, the management structures of which are decentralized and
those that compete in various cultural settings.
 Pillars of Glocalization

• People – Firms should have a clear

target of region, consumers and
their specific needs in mind so as to
effectively deliver goods and
services.

• Processes – The integration of local

needs into the global strategy needs
a definite process so that the
coordination is not hampered in any
way.

• Technology – Processes that bind

the cooperation are based upon
certain technologies and these
technologies act as the basis for the
whole process of glocalization.
 Managing Glocalization
With Glocalization, a global corporation's goal isn't to say, "Here's a sandwich." Rather, the
corporation asks, "How can we make a sandwich you'd like?“
The marketing, funding and infrastructure behind a product may come from a global
corporation, but the local level dictates what finished form that product will take. In this
way, glocalization is a bottom-up system of governance for globalization.
Several organizations such as the Glocal Forum and the Think Tank on Glocalization push
for the creation of a more stabilized world though a series of glocalized strategies:
•Emphasizing city-to-city diplomacy
•Developing local economies and encouraging free societies
•Encouraging and revitalizing local cultures
•Developing tourism opportunities for economic and social benefit
•Developing sporting opportunities for economic, social and health benefit
•Empowering youth with a glocalized view of the world
•Using information and communication technology to foster economic development and
social relations
 GLOBALIZATION GLOCALIZATION

Globalization is the spread of Glocalization is a combination

products, technology, of the words "globalization"
information, and jobs across and "localization", used to
national borders and cultures. describe a product or service
In economic terms, it that is developed and
describes an interdependence distributed globally, but is also
of nations around the globe adjusted to accommodate the
fostered through free trade. user or consumer in a local
COMPARISON market.
 GLOBALIZATION GLOCALIZATION

Globalization is an historical process The term was coined in the Harvard

that began with the first movement of Business Review, in 1980, by
people out of Africa into other parts of sociologist Roland Robertson. He
the world. Traveling short or long wrote that glocalization meant "the
distances, migrants, merchants and simultaneity – the co-presence —
others have delivered their ideas, of both universalizing and
customs and products to new lands. particularizing tendencies."
The melding, borrowing and adaptation
of outside influences are found in many
areas of human life.

EVOLUTION
Globalization is a social, cultural, Business freedom(like
political, and legal phenomenon. liberalization) ,facilitators(like
infrastructure) , government
(subsides, taxes)
,competitors(market strength) and
resources are the conditions for
glocalisation
 GLOBALIZATION GLOCALIZATION
This approach naturally leads to 4 phases of 3 Steps To Glocalisation: People, Processes And
globalization. Technology.
In Phase 1, consumption and production take
place together because the “hunter-gather” If you walk into a McDonalds anywhere in the
lifestyle meant consumption moving to world and order a Happy Meal, the cardboard
“production” (i.e. food sources). box it comes in will probably be the same. But
In Phase 2, consumption and production open it up, and you’ll start to see some
remained together but it was because people differences. The toy it comes with will likely
“brought” the food to themselves by developing reference the latest film or cartoon popular in
agriculture. that region, while the food will take into
Phase 3 was when modern globalization started consideration cultural differences depending on
in the 19th century. Steam ships and railroads whether you’re in Dagenham or Dubai. This, in a
DEVELOPMENT made it economical to consume goods that were nutshell, is ‘glocalisation’ – global brands with
made faraway. With things being made in one local consumers, where anything as short as 40
country and consumed in another, trade kilometers can impact how companies respond
boomed. to the use of language, colors or, in this case,
Phase 4 – the one we are in today – started food.
when production itself got broken up and shifted
around to different nations. This is known as
offshoring and it radically transformed world
trade and manufacturing.
 GLOBALIZATION GLOCALIZATION

Proponents of globalization It attracts more consumers

believe it allows developing in the market and is flexible .
countries to catch up to Higher profits and adapts to
industrialized nations through different countries are the
increased manufacturing, key advantages of it.
diversification, economic
expansion, and improvements
in standards of living. Outsourcing
by companies brings jobs and
ADVANTAGES technology to developing
countries. Trade initiatives
increase cross-border trading by
removing supply-side and trade-
related constraints.
 GLOBALIZATION GLOCALIZATION

An economic downturn in one Its a time consuming and a

country can create a domino effect lengthy process .
through its trade partners. For
example, the 2008 financial crisis
had a severe impact on Portugal,
Ireland, Greece, and Spain. All these
countries were members of the
European Union, which had to step
in to bail out debt-laden nations,
DISADVANTAGES which were thereafter known by the
acronym PIGS.
Globalization has also increased It also needs expert advice
homogenization. Starbucks, Nike, and is not suitable for small
and Gap Inc. dominate commercial firms. If the process is not
space in many nations. The sheer successful its a waste of
size and reach of the U.S. have made money for the firm.
the cultural exchange among nations
largely a one-sided affair.
 GLOBALIZATION GLOCALIZATION

Trade Examples : Mcdonalds

The exchange of goods and services In the UK, McDonald’s strategy is to listen
between nations. Trade is a feature of more to local consumers and then act on
ancient societies that has expanded due it. The company strives to do this around
to improvements in transportation, the world. Some if its local
political stability and cooperation favorites around the world include the
Immigration McItaly burger in Italy, Maharaja Mac in
The ability to live, work or go to school in India, the McLobster in Canada, the Ebi
EXAMPLES a place other than the place where you Filit-O in Japan.
happened to be born. Immigration is a Starbucks
pervasive feature of history that is Starbucks is trying out locally designed
nothing new. franchises in stores. The stores are non-
Media & Entertainment Starbucks branded in order to recapture
Media and entertainment such as movies the feel of a local coffee shop, which
and magazines are commonly distributed would otherwise be threatened by the
in multiple countries. existence of Starbucks in its vicinity.
 GLOBALIZATION GLOCALIZATION

Capital KFC
Integrated banking systems To increase visits from local residents,
allow capital to flow over borders. For KFC has initiated a five-year plan to
example, a retiree in Spain who can upgrade its UK restaurants with new
instantly buy and sell stocks in an contemporary designs. Designs will be
Australian company. based on ‘look and feel’ of the
Environment area and in collaboration with local
The planet has common resources. In property developers.
theory, these can be completely used KFC has a vegetarian thali (a mixed
EXAMPLES up or destroyed by a single nation. As meal with rice and cooked vegetables)
such, international cooperation and and Chana Snacker (burger with
law is seen as a hope for avoiding chickpeas) to cater to vegetarians in
declines in quality of life due to India.
environmental mismanagement. Nokia
Unfortunately, globalization has a bad Nokia responded to local customer
track record of allowing firms to shift needs with the introduction of dust-
production to nations with low resistant keypad, antislip grip and an
environmental standards in order to inbuilt flash light for Indian rural
avoid local regulations. consumers (specifically targeting truck
drivers).
EFFECTS OF
GLOBALISATION
AND
GLOCALISATION
 GLOBAL MARKET: To increase consumer demand many organizations are
attempting to expand and extend their value chain to an international level.
IMPACT: sudden increase of number of transactions across the borders.

FOREIGN TRADE: Globalization has created and expanded foreign trade in the
world. Things that were only found in developed countries can now be found
POSITIVE in other countries across the world. People can now get whatever they want
and from any country.
EFFECTS OF RESOURCE IMPERATIVE: Developed countries need natural and human
GLOBALISATION resources of the developing countries while developing countries need
capital, technology and brainpower of the wealthier countries.

COMPETITION: One of the most visible positive effects of globalization is the

improved quality of products due to global competition.

STABLE SECURITY: globalisation has contributed greatly in enhancing the

world security.
 JOBS INSECURITY: manufacturing work is outsourced to countries
where the costs of manufacturing goods and wages are lower than
in their countries. Most people like accountants, programmers,
editors and scientists have lost jobs due to outsourcing to cheaper
locations.

FLUCTUATION IN PRICES: Due to increase in competition, developed

NEGATIVE EFFECTS countries are forced to lower down their prices for their products

OF GLOBALISATION
SPREAD OF FAST FOOD CHAINS: Fast foods chain is growing very
fast. But some of the most rapid growth is occurring in the
developing countries, where it’s changing the way people eat.

ENVIRONMENTAL DAMAGE: Increased production means increased

utilization of natural resources. Besides, increased trade results to
increased transport, which uses fossil fuels. As a result, pollution
has increased.
 CONNECTION: glocalization helps in connecting with the
consumers of a particular region on an emotional level and
also leverage its global position.

ATTRACT CUSTOMERS: It attracts customers by offering

POSITIVE EFFECTS localisation of standard products. Higher profits are often

achieved in such practices.

OF GLOCALISATION
REDUCES COSTS: Benefits of glocal organizations include
reduction in costs, accumulation of intellectual and capital
assets, service-oriented focus on internal clients, alignment
with external competition

PROFITABLE BUSINESS
 MARKET BEHAVIOUR: a foreign company’s business rules, policies
and processes that may have been working successfully elsewhere
may be quite misaligned to the local needs of a particular country.

OVERDEPENDENCE ON LOCAL MANAGEMENT: Long distance and

inadequate local knowledge leads to multinationals depending too

NEGATIVE EFFECTS much on the local top management

OF GLOCALISATION WORK ENVIRONMENT: The difference in employees’ expectations

from the job, societal pressure, and stress level leads to the
existence of a different set of drivers for their motivation and
engagement, giving rise to a set of challenges in human resource
management

RISK: If not successful waste of money for the firm

 CASE STUDY ON GLOCALISATION OF McDonalds
The president of McDonald’s international has insisted that the company is as much part of local culture as
possible so it standard menu has been adjusted according to the taste of India; this is the reason why
McDonald’s corporation is one of the best user of Glocalisation. McDonald’s having around 33,000 stores
worldwide, offers McDonald giant branding, but there have been seen huge differences in the actual menu.
These adjustments are made to fit the store in the local taste buds and dietary requirements. McDonald’s
restaurants in India mainly offer chicken and fish with a lot of choice to the vegetarian customers The chain
famous for hamburgers tailors its menus to local tastes, which means no beef in India because the majority of
its 1.22 billion people are Hindus and worship cows. It also doesn’t serve pork items in respect to Muslims.
Apart from that McDonald’s is also trying to design a burger targeting the Jain community in India which doesn’t
eat onion and garlic. Walk into a McDonald’s in Hong Kong and you will find the Shogun Burger (a teriyaki pork
patty with lettuce served on a sesame seed bun), salads, soups such as tomato and pumpkin, taco flatbreads,
the Rice Fantastic (a burger-like entree with rice patties instead of buns). In Bahrain McDonald’s serves
McArabia, with that it offers the McCrispy, a meal consisting of up to three chicken fingers with a choice of
barbecue, sweet and sour, or garlic sauce.
McDonalds has not only changed its menu according to the location of the store it has also globalized the way
restaurants are being used. In India the television sets installed are paying Hindi Bollywood songs and Indian
products are being advertised. It also supplies a separate place to organize children birthday parties and an
employee receptionist is also provided who deals with the children, talks to the parents and keeps the party
going. In Beijing the menu beings same as USAs the restaurants are presented as local place to hangout, often
for many hours, over a snack.
McDonalds being such a big food enterprise having so many stores in more than 120 nations many western
customers use it as a source of cheap and quick meal, but due to the use of its Glocal strategies when people
walk out their local store they always come out happy and with their tradition, culture and nation uniqueness
intact with them.
CASE STUDY
 STRATEGIES USED BY McDONALD TO ENTER INDIA:-
• The Spicy Paneer Burger or the McAloo Tikki one of the most famous burgers are actually Indian,
designed especially for the taste buds of Indian people. There was no choice left for McDonald but to
launch a vegetarian menu because most of the Indian population is vegetarian. Then started a trend of
designing a standardized menu catering the Indian audience by many food MNC chains operating in
India. For example “Pizza hut” a glance at their menu shows us that they are putting in a lot of efforts to
serve the Indian market by providing us what we want for vegetarians they have huge variety of Paneer
delicious and for non- vegetarians also they have varieties of kebabs and chicken tikka pizza. KFC has
changed his flagship theme from completely non-veg. restaurants and introduced plenty of veg goodies
to the Indian people like Rice bowl meals and veg Zinger burger. Similarly Dunkin Donuts have stated
making there donuts more sweet to serve the Indian sweet toothers. Also McDonald, Pizza hut, Subway
has started home delivery concept in India. Youngster and teenagers’ visit this kind of hangout joints
because the food offered is of good quality, menu offered by them is desirable, affordable and some
these joints also provide free internet access.
• Globalization strategies undertake marketing of standardized product using standardized marketing mix
in the same way everywhere. Whereas localization strategies on the other hand, involves marketing
strategies for a specific region according to its culture, region, language and national uniqueness for
example social media like Facebook is offering its “like” and “send” button in more than 108 languages,
Nokia started the dual Sim card with an anti-dust keypad phones specially for its consumers in India,
Gillette introduced the low cost razor ‘Gillette Guard’ priced at about 15 RS.in the Indian market.
Features included easy rinsing (as water is scarce in Indian rural areas) and unique grip design (the way
the consumer held the razor).
 SWOT Analysis of McDonald’s
• Strengths:-
• A fast- food model which uses standardized food preparation methods, entrusting good
quality, proper procedure and higher results.
• Global presence, brand recognition and customer loyalty
• Continuous high returns: McDonald’s has a long and proven track record of paying out
and raising its dividend, and currently pays out quarterly installments of $0.77, which
when annualized puts the dividend as yielding 3.50%.

• Weaknesses:-
• Low food standard due to a fast food model.
• Sliming profit margins: due to the financial crisis the cost of inputs of McDonalds has
gone up and customers are feeling that the menu is becoming expensive which is
resulting in recent low profits.
• Concentrated nature of business: the food giant is present mostly in every part of the
globe which gives it less room to expand.
• Opportunities:-
• Product Innovation: One of the company’s most successful line of products in
the past years has been its McCafe beverages, a line that was just recently
integrated, and new products are constantly in McDonald’s pipelines.
• New global markets are continuously opening.
• The economic depression has forced people to move on to less expensive “fast
food”, rather than restaurant quality.

• Threat:-
• Economic downturn: with the global economy going south people are cutting
back on the luxury of going out and eating.
• Health concerns: people are becoming nutritionally aware and opting out of
consuming fast food. Fast food is continuously being blamed for obesity and
expanding the worlds waistline.
• Boosting up of competition: with the general population only willing to buy good
quality food at low prices the profit margins are thinning.
 CONCLUSION:-
• Every culture is different from other in many ways, taste of people living in different countries is different a food item will be
in high demand in part of the globe and rejected completely in the other parts for example spicy Indian food will not be
entertained by Chinese people, so Glocalisation techniques need to deal with adaptation of specific taste requirement of
various regions.
• Glocalisation strategies should take into the in account various cultural and religious beliefs of the market they are catering
their product into like Beef and Pork are not sold by McDonalds in India.
• Not just the food item by the way its cooked should be changed according to the demand of the people it is being served to,
the process should suit the taste buds of the local population and the name of the product should be appealing to the local
people.
• The final outcome should be according to the region’s specific demand, and then only the product will be accepted by the
customers. Like McDonald’s “Pakka Indian hoga” Mcspicy grill burgers.
• The ambience of the store outlet should also be altered to wow the local audience like McDonalds is doing by playing Indian
music in their store and displaying Indian advertisement and shows on their television sets.
• Glocalisation should use local marketing strategies and campaigns. Local celebrities should be approached to promote the
products.
• The company secures the trust of its customers and employees by using a separate preparing process for vegetarian and
non-vegetarian items.
• Glocalization helps in connecting to the customers of every region on an emotional level, also helping the global brand to
upgrade its position.
• After doing analysis in the study it has been found that if a Global brand has to achieve success in any local market, one has
to adapt itself according to the local taste and preferences and to do that the strategies of Glocalisation play a vital role like
“Think Videsi, but act Desi” can be a success mantra for Global brands who wants to penetrate the Indian Market.