Regional strategies to produce a global powerhouse

Think local, act global, this is the new mantra of globalization. Long considered the antithesis of regionalization, globalization is now presented as the sum of several regional tracks. The pandemic has above all made it essential to rely on regional or local resources, but always to be global in approach and delivery. Being personal with users is now the rage.

Coca-Cola is by far the best example of both a local and a global marketing strategy. The key to the success of the American beverage giant in every market it has established in has been having a flexible bottling policy. The company allowed local leaders to alter the taste of drinks based on cultural preferences. The brand has also adapted its marketing, pricing and distribution efforts to the local environment in each of its markets. At the same time, the company has ensured that its products carry a uniform brand in its markets and are easily recognized around the world.

Regional strategies, globally

Indeed, a hybrid arrangement of global strategies executed by local leaders in each market with the local flavor intact is the way forward for companies. This makes sense, especially in the current scenario, where countries are increasingly looking inward for resources and capacity. But let’s not confuse regional concentration with a closed economy; in today’s world, the diversity and inclusion of the local is imperative to go global. Leveraging the local knowledge base to appeal to the unique tastes and preferences of the resident population can be a competitive advantage for businesses.

Google, for example, has started adopting local strategies to strengthen its global presence. In Africa, most Google managers are locals, delivering local news through country-specific domains. Google uses the local community to find the best talent available, partner with local vendors and vendors, and build a loyal following. Correctly implemented, such an approach towards regional poles can be an important growth lever for companies.

There are two important truths behind validating a hybrid strategy – that globalization has failed to blur regional boundaries of culture and values, and that region-specific strategies are not siled bifurcations. , but essential elements of an integrated global strategy.

Expansion with a purpose

Typically, companies looking to expand and set up regional operations as direct subjects of corporate headquarters. Regional centers are often required to consult with the business for decision making, resources, leadership and budgets. In recent times, companies have realized the need for fewer controls and are building autonomous regional bases in which part of the decision-making lies with local leaders.

The execution of such a decentralized strategy has its challenges. The first need is to identify the ratio of required standardization processes versus a customizable leadership structure. Too much standardization of products and services could lead users of certain regional centers to disconnect.

Unlike standardization, the regional hub model allows companies to customize and adapt as needed

You may remember how Dell was forced to change its strategy in China as it faced competition from several neighborhoods offering cheaper products, compared to its globally standardized products. McDonald’s has suffered a major backlash in India for its food choices and has been forced to change his menu. Ford’s attempt in 2000 to consolidate operations in North America and Europe under one global umbrella cost the company more than $ 3 billion in losses in Europe. There are countless examples in the public domain to drive home the point.

Unlike standardization, the regional hub model allows companies to customize and adapt where needed. The question that arises today is the following: how can regional strategies fit into existing business structures, especially when business leaders hold the majority of power?

The obvious solution is to reallocate certain decision-making powers from global to regional, or from one division to another. Organizations should implement an integrated operating model that centralizes critical areas and allows local teams to tailor programs to suit local needs. In our opinion, handing over control of functions that require an overall analysis, such as finance, to company management, while delegating operational control to local management, will do wonders in a hub and spoke model. .

But identifying the essential functions to be entrusted to the management of the company is no small task. Businesses should use technology and data mining to determine functions that can impact organization-wide operations. Centralization of finance is desirable as a measure of stability for companies.

But creating regional global standards is only half the battle won. To shift the balance of power towards local leadership, a strong HR strategy is imperative to hire, train and manage local labor laws, compensation guidelines and workplace culture. To balance global HR strategies with regional strategies, companies must build flexible and agile structures, depending on the requirements of each region in which they operate. While the global radius of the organizational wheel can lead to standardized efficiency and scale, flexible local operations (hubs) can drive growth and effective employee engagement.

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