The New Paradigm: Market-Driven Approach and Need for a One-World-Strategy

Abstract

Consumption in many large emerging markets is projected to grow throughout the next decades. In their endeavor to sustain growth, companies from the industrialized world need to tap into and open up new markets in major developing countries. However, cross-border activity has many challenges and companies are constantly balancing conflicting priorities. They are torn between standardization and local adjustment. They must focus on minimizing the costs of day-to-day operations while maximizing revenue, and they need to exploit local opportunities while building their knowledge of various foreign markets. All of this must be integrated into their overall business strategy and decision-making processes. More than 30 years after Theodore Levitt’s hypothesis of globalized markets and a unification of consumer needs, we know that in most markets the world has not converged to a degree that allows for a global one-size-fits-all approach. The result is a rising need for the capability to adjust brands and marketing to the local market environment as far as needed without getting lost in complexity. Companies need to strike a sound balance and they need to find their best way between too much local adjustment that could lead to ballooning costs and diluting the integrity of the brand, and too much standardization that could punish the company with stagnation, declining market share and falling profits. With key emerging markets like China and India on the rise, there is a growing need for corporations to define “One World Strategies”—that is strategies that also firmly encompass the needs and preferences of consumers in key emerging markets.