Globalization vs. Localization: The Differences and Benefits

Introduction

In business, globalization refers to the process by which information, products, and services are distributed across borders to create a more interconnected world. Localization, on the other hand, tailors your product or service for specific target audiences, adapting it to their unique cultural, language, and other local requirements. While both globalization and localization involve expanding into global markets, they address different facets of international business.

Taking your business global can be a rewarding experience. An interconnected world, supported in large part by the internet, means you have the potential to reach people anywhere, at any time.

Even if your business operates domestically, globalizing your business can increase your visibility, reputation, and revenue. Whether your potential customers are in the U.S. or not, research shows that about 40% of internet users won’t buy from websites that aren’t in their native language. Other statistics show that more than half of Google searches are done in languages other than English because less than 27 percent of web users speak English.

Globalization is a larger, overarching strategy encompassing various business development elements, including localization that focuses on brand awareness and much more.

The Power of Globalization: Expanding Across Borders 

Globalization is a word that encompasses growth on a worldwide scale. It's the process of integrating and influencing economies and cultures. Globalization means ideas, knowledge, people, goods, and services are spread worldwide. In business, globalization describes integrated economies marked by free trade, with free flow of capital between countries and easy access to resources.

What's the goal of globalization? Access. Globalization helps brands integrate with other nations and allows both parties to exchange new ideas, technologies, products, and services. However, cultural, political, and linguistic differences worldwide can slow down globalization and make the spread of relevant information harder. These differences create challenges for businesses entering foreign markets, and sometimes require improvements that are closely related to localization.

Key Elements of Globalization

Globalization is a driver for business growth success, but many pieces work together to make a strategy possible. Globalization calls for increased interaction, integration, and interdependence among all nations. The more countries and regions become intertwined politically, culturally, and economically, the more globalized affiliated organizations need to be. Here are a few globalization elements to consider when planning a potential business expansion:

• Political Climate: Cultural and economic globalization have caused countries to become more connected politically. These connections have resulted in countries cooperating to enact trade agreements and work together to open their borders to allow the movement of capital and people needed to keep economic globalization operating. For example, American companies may want to reduce friction with Canadian consumers by translating their offerings into French-Canadian.
• Environmental and Economic Considerations: Expanding a business into global markets can have significant economic and ecological implications, including using natural resources in another country to produce goods, the impact of shipping products globally, and fair international employment.
• Global Operations and Supply Chain: Globalization enables access to global talent, materials, and products that were previously out of reach. Globalization can enrich business processes by offering companies a wider more abundant pool of resources to pick from.
• Business Ethics: Business ethics and globalization are rooted in the concept of diversity among people and practices. Companies that diversify into other countries and cultures should provide a framework establishing the ethical views of the company and integrating them into the corporation's culture.

Why Globalization Matters

As businesses aim to grow globally, globalization strategies help companies gain access to new ideas, technologies, products, and services. However, these strategies must address cultural, political, and linguistic differences to ensure smooth entry into foreign markets. This is where localization becomes vital.

What is Localization: Adapting for Cultural and Language Barriers

Localization ensures your online business presence is culturally relevant to the global audience your business serves. While the subject matter of localization varies in subject and scope, globalization elements also have language and cultural barriers in common.

While globalization is driven by integrating cultural and economic systems, localization is concerned with bridging language barriers for global customers. This goes beyond simply translating content. Localization efforts are about linguistic tendencies, holidays, traditions, and units of measurement within a target market’s culture. One significant aspect of localization that addresses these language and cultural barriers is website localization.

Localization is only one piece of the globalization puzzle, but it does encompass a large part of how globalization needs to develop successfully. If a company's strategy is to go global, its globalization strategy should include many localization elements in its business operations to accommodate its global audience.

Key Elements of Localization

Localization encompasses cultural elements that a business needs to address when developing globalized content. Website translation and localization embrace this and include factors such as:

• Transactional and data-based information such as currency conversion, time zone conversion, number formatting, correct phone numbers, contact information, and payment information are crucial to localization. Hence, customers know exactly how to buy your product and where/how to ask questions if they need assistance.
• Cultural elements such as date formats, accurate product descriptions, units of measure, and other factors show customers you understand the market and location where they reside.
• Localized content such as email campaigns, social media posts, and offline assets that connect to your digital presence and show added support to potential customers.

Why Localization is Essential

Localization adapts content, products, and services to specific local markets- and for businesses going global, this includes the localization of websites and other content relevant to the business. Localization consists of the practice of changing a text from one language to another while preserving the local culture's meaning and nuance.

Localization may also include adaptations to images or colors, formatting, UI, or design, and even payment methods, to name a few. Businesses find that ignoring localization can alienate customers, decrease customer satisfaction, and can be the single point of failure for international and multidomestic strategies.

The Interplay: How Globalization and Localization Work Together

Globalization and localization are not mutually exclusive but rather complementary. While globalization opens up the potential for international growth, localization ensures that your content and operations are tailored to each specific market. A globalization strategy without localization is incomplete—localizing your content is the essential step to engaging customers in foreign markets.

How to Integrate Website Localization into Your Globalization Strategy

When you plan to "go global," a globalization strategy must include web localization. This means not only translating content but ensuring cultural nuances are respected, and local regulations are followed.

By focusing on both globalization and website localization, businesses can build a global presence that resonates with international customers and drives growth.

MotionPoint understands the importance and intricacies of globalization and localization and how each concept works independently and together. MotionPoint can guide your business through the complexities of localization and offers customized translation options through various services and solutions. Read our “Future of Global Marketing” ebook to learn more about why globalization is important, how to engage a global audience, and how it’s achievable for potential customers worldwide.

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