Globalisation: The spread of economic, cultural and social ideas across the world.

Localisation: The act of operating locally in terms of employees, product, supply of raw materials, etc.

The aim of nearly all companies is to maximise profits. Therefore TNCs glocalise their products in order to increase market share and increase profits. Other reasons why TNCs may glocalise include:

• To meet health and safety regulations
• To meet electrical requirements e.g. voltage, plug type
• To meet local laws
• To match availability of components, produce, etc.
• To meet local customs and tastes e.g. no pork in a Muslim country or beef in an Hindu country
• To meet socio-economic status of market place
• To meet local climatic or terrain conditions
• To match local languages and ideas of acceptability

MacDonalds is a great example of this, even opening a vegetarian restaurant:

McDo’s goes Veggie: “The world’s second-biggest restaurant chain after Subway already tailors its menus to suit local tastes — which in India means no beef to avoid offending Hindus and no pork to cater for Muslim requirements.

It will open its first vegetarian outlet in the middle of next year near the Golden Temple in the Sikh holy city of Amritsar in northern India, where religious authorities forbid consumption of meat at the shrine.

“It will be the first time we have opened a vegetarian restaurant in the world,” a spokesman for McDonald’s in northern India, Rajesh Kumar Maini, told AFP.”

McDonalds is probably one of the best examples of how TNCs adapt their global brand and products to adapt to the local market place. Despite having nearly 70 million customers daily in over 30,000 restaurants in nearly 120 countries worldwide, it is constantly trying to expand and increase its market share. Below is a list of some ways that McDonald’s has adapted its brand and products to increase its market share:

• In Muslim countries pork has been removed from the menu
• In Hindu countries beef has been removed from the menu
• In Muslim countries halal food is used and in Jewish countries kosher food is used
• Certain local festivals or customs maybe celebrated e.g. during Ramadan in Muslim countries, McDonald’s will offer Iftar buffets at the breaking of fast.
• The types of burgers/products are changed to local tastes e.g. McRice in Indonesia
• The number of McCafe’s have been increased in localities with a coffee culture or office workers in a hurry
• The number of drive-thrus or playgrounds maybe increased in locations with a large numbers of car owners or children
• In France, Ronald McDonald was replaced by Asterix as the company logo
• In locations Antigua in Guatemala McDonald’s has changed its store frontage to blend in with local architecture
• Staff have different uniforms depending on local culture
• Changing language of menus, signs, etc.

How Ronald got le boot
This episode of ‘Superbrands’ goes into some detail about the role of MacDonalds, Starbucks and Heinz.

More on Starbucks here.

Other examples abound. Here is H&M’s advertising:

Exam style question:

Explain how and why glocalization occurs. [10 Marks]