Glocalization Illustrative case
The aim of this study is to make an approach to the concept of Glocalization and its principles illustrating this concept by the Case of Disney Paris, and how this organization applied this concept in order to adapt its products and services in a different geographical and cultural space, and challenges that were presented for this organization and how Disney overcame these obstacles and also how the Disney Paris team managed to adapt to the French market and its cultural context until achieve brand positioning as a tourist landmark in the old European continent. In the first part will be discussed the concepts of Globalization and Glocalization and its influences on humankind and will be further discussed the concept of Glocalization in the area that is in our interest that is the organizations and the way how it is used this concept by companies to globalize its products and services but adapting them to the global context.
Discussing the theory
To discuss and understand better the term Glocalization, first of all is necessary to address the concept of globalization as Dalia Zamora defined as: ' Process of communication and interdependence on a global scale which involves diverse areas such as economy, technology, culture, social and political spheres.' (Zamora, D, 2013, P.1)
Advances in the areas of technology, communications and transportation among others in the XX and XXI centuries accelerated the process of globalization, allowing an increase and an easier interaction and communication between individuals and cultures.
Large companies and organizations use the Globalization process, as it is common for companies seeking to internationalize to bring its operations into new markets, products and services.
Thanks to this process is easier for companies to globalize their products and have higher growth and strategic and financial benefits that often they do not get in the local markets.
With globalization organizations seek to homogenize and standardize markets, tastes, products and services, some organizations do not take into account the values, customs and cultural identity of each country or region, and they see all markets as a homogeneous whole because globalization seeks classify everyone into a single market with standardized products and services, thanks to the flexibility provided by an adequate supply chain and international logistics, an example of this are car factories in Germany that use raw materials from other continents such as Asia and South America, these brands hire labor from other countries for the manufacture and then sell these cars in the United States and the rest of the world.
This process did not take into account the cultural peculiarities of each region that make them unique, this view had the consequence that some companies were not successful in some countries and regions, especially those where individuals retain a strong attachment to their culture, customs and traditions due these individuals feel their cultures threatened by globalization arrival of a foreign culture with other values and other lifestyles, as a result these individuals established cultural barriers that prevented entries from other cultures through products, services and multinationals.
Due to the lack of success, these companies are beginning to shift their focus and strategy, these organizations begin to think globally but adapting their products and services to each particular market. 'Glocalization refers to the interface of the global and the local, a cooptation of the global and the local, the dynamics of cultural homogenization and heterogenization' (Matusitz, J, 2009, P.667-668).
Companies initiate a change on focus, strategy and vision of each country and each market, this change allows companies to see each region and country as unique and special places with different values and cultural traditions, and the companies switched Homogeneity to heterogeneous, adapting products and services to each particular region, this change allowed companies to generate empathy for those individuals and groups opposed to globalization, because in this way the individuals did not feel threatened their cultural identity.
This concept of adaptation is called that comes from the fusion of the terms globalization and localization = Glocalization that involves adapting the global to the local cultural context of each region or country, "Think globally, act locally" adapting companies, products and services to the uniqueness of each culture, recognizing the values and cultural identity of each place, without forgetting the global scope. 'The development and selling of products or services intended for the global market, but adapted to suit local culture and behavior. (Think globally, act locally.)' (Hollensen, 2011, P.21)
A simple example of Glocalization is Lays, the American brand which has a presence in 120 countries around the world and is one of the leaders producers of chips potatoes packed products in the global market, in its strategy of Glocalization Lays put on the market in each country where is present, typical flavors of that country, taking as an example the (De Todito a Frito-Lay product), which is a mix of snacks containing pork, plantains and fries, and Todito 4 which containing cassava products, food widely consumed in Colombia and South America, but the strategy is not only to adapt the product to the tastes of Latin American consumers, this company goes beyond the marketing and advertising, hiring national sports stars like footballer Juan Guillermo Cuadrado and people of show business as Maluma, which promoted the product through trade in audiovisual media in the Colombian national territory. as it has also adapted in other countries and regions of the world its global products (fries) to the local context, as also lays has successfully adapted not only in Colombia, but also in other countries and regions of the world its global products (fries) to different local contexts given for each country its own suppliers of raw materials and their own distribution channels and chain logistics.
STORY: WHAT HAPPEN IN THE CASE?
The Walt Disney Company is a conglomerate, founded by Walt Disney and Ub Iwerks on October 16, 1923, within this conglomerate is the company (Disney Parks And Resorts), which operates theme parks built by Disney, which are:
The Walt Disney Company is the second largest media business conglomerate in the world, behind only of Comcast group.
Eurodisney is one of the leading tourist destinations in Europe, was built in 1992 and has received 275 million tourists and visitors since its doors were opened in 1992, this complex has 2 theme parks; "Theme Park is the term used for a group of games and rides the groups which aimed to entertain and attract people and is built around one or more themes."
The Eurodisney SCA group is responsible for the operation of the Disney resort in Paris, located in Marne-La-Vall''e 32 kilometers east of Paris, 1700 companies participated in its construction and about 10,000 workers since the start of construction until April 1992.
Eurodisney belongs to:
The complex has 2 Eurodisney theme parks: Walt Disney Studios park and Walt Disney Park, this complex also includes seven Disney hotels and 7 associated hotels, a golf resort and a shopping area. Its location in Marne-la-Vall''e is strategic, and was selected carefully from 200 places, is located outside of Paris just 20 miles away and is accessible by train, plane and road, also you have access to the TGV.
When Eurodisney opened its doors in 1992, the company hired more than 12,000 people, Robert Fitzpatrick CEO failed even before starting operations, the reason for this, is the fact that he and his team predicted that they would have 11 million visitors the first 12 months following the opening.
The reason for this erratic forecast was the way that Fitzpatrick and his executive team managed Eurodisney in a too American way, the reason for such American administration style was the incredible success that had Disney World in the United States and the success that the Tokyo Disney Resorts had.
For Eurodisney was totally different from what happened in Tokyo and in the United States because managers entrusted they would have the same success and did not take into account factors such as the difference of French and American culture, the French habits and idiosyncrasies of the French people.
The followings are some of the key factors that not allowed the success of Eurodisney in France:
' The habits of Europeans especially the French vary from American habits.
' The idea that had the French about cultural imperialism, some French personalities and civilians regarded the project as a threat to French values, culture and the cultural identity, French people imposed cultural barriers to Eurodisney and reinforced it with feelings of rejection about the US war against Vietnam.
' Prices too expensive.
' The French labor force was expensive, unlike the workforce in the United States
' Per capita consumption far lower than predicted
' In the parks they were not taken into account the French eating habits, and no liquor sold in the park
' Low hotel occupancy
At the beginning Disney hired 12.000 employees, four months later 1.000 of them quit their job, arguing strong differences with the American worker model that Disney were asking for, Disney has a strict labor policy concerning personal presentation, and many French employees disagreed with it, due to the fact that French are culturally more carefree in terms of personal presentation. This cultural Issue of adaptation was very important because Disney was not aware that the labor policies, which were imposed, differ too much with the French model.
In 1993 Robert Fitzpatrick resign to his job as CEO and Philippe Bourguignon took his place, Bourguignon gave a dramatic change to the organization, he found that the real problem was that the company clung to a globally strategy that has been successful in United States and Tokyo, but not in Europe, and he adopted a local strategy that let the company to adapt to the cultural environment of Europe.
The decisions taken effectively helped improve the economic situation of the company and the perception that people had about this, some of the decisions that took the new management were:
Glocalization strategy Eurodisney:
Prices of food, tickets of entrance and accommodation prices dropped because they were too high and the French are more austere compared to Americans.
Eurodisney began selling alcoholic beverages in restaurants and paid attention to the French gastronomy and eating habits of the French, this helped to change much the perception of the public towards the company.
Eurodisney has made many changes since it began adapting to its environment, within its strategy is the innovation, adapting its products and services in its cultural environment, an example of this is the introduction in 2014 of a new experience in the park called Ratatouille which is the name of a movie for kids but also is related to French gastronomy and culture.
Disney Paris currently reinvests part of its profits to improve and upgrade the parks, and to provide the best quality and experience to the customers, example of this was the investment made to improve the hotel plant and renovating 2.900 rooms.
The marketing strategy is focused exclusively in the following countries: Belgium, Germany, Italy, Netherlands, Spain, UK and of course France, making a lot of emphasis on French culture and as a company adapting to that environment.
Disney Paris optimized supply chain and has done an excellent logistics management, thanks to the interaction with suppliers of their environment as well using channels French sale, allowing the company to cut costs and reduce prices to their customers, adapting its pricing strategy to the economic context, allowing combos offer that fit the need and ability of the client. Allowing the company to position itself as a leading tourist destination in Europe and the world.
'Now, more than ever, corporations are not just adapting ideas, themes, products, and services, but also entire organizations, including corporate philosophies and strategies, operational procedures, models for supervisor ' employee relations, and so forth.' (Matusitz, J, 2010, P.234).
Eurodisney case highlights the importance of cultural factors in a given region or country, and the importance that management should pay to these factors, managers must think globally and act locally. This case leaves an important lesson, which is that success is not guaranteed for any company.
The fact that a company like Disney is successful in the US, does not ensure that is successful in another country or region, we as a managers must analyze all factors, including the particular socio-cultural aspects of each region and leave nothing to chance, large companies are also susceptible to sink.
Glocalization can reduce the margin of error and loss if only the organization and its products or services fit to the local environment
'Practice shows that not all strategies are successful, for many resources and intelligence that are behind them. For many reasons, both objective and subjective, an strategy, supposedly well developed in its practical application may fail'. (Alvarez, F, 2012, P.1)
But there is always an opportunity to get back on track!
...(download the rest of the essay above)