Standardisation and Adaptation
Discuss the advantages and disadvantages of standardization strategies and adaptation strategies in a global environment. Standardization is the process by which a company makes it methods, especially its production processes, uniform/identical throughout its organization. Whereas for adaptation, a company would change their methods such as the price, promotion, packaging and/or the product itself in order to fit the needs and preferences of the market or a particular country.
Adaptation occurs when any element of the marketing strategy is modified to achieve a competitive advantage when entering a foreign market. The advantages of standardization is the consistency of the product throughout the world and the cost savings from having identical the product. Standardization helps cut costs when the company produce the same products and reuse the established marketing and distribution systems where the company gets economies of scare benefits in production and buying. It also helps improve communication and performance.
The advantages of standardization is that it helps cuts costs by lowering installation costs, reducing need to maintain large inventories, and lowering maintenance costs thus also allows a company to take advantage of economies of scale when purchasing supplies. It helps improve the management and design with less customization needed, enabling interchangeability of components, and provides practical application of expert knowledge enhancing operability and improves performance.
The disadvantage of standardization is the loss of uniqueness. If a company builds up a customer base that serves a specialized market, standardizing its processes may mean it loses some of it’s former customers. Another disadvantage is the loss of responsiveness where when a company expands into a new market, there may be cultural differences which leads to different taste and likings of the market.
They may also be other products that are locally made which would compete with the company’s product. Adaptation has the advantage to gain respect for local specifications and expectation where a company can cater or ‘tailor made’ the product to suit the needs of the specific cultural tastes of the country that is being marketed. This would make the product more ‘personal’ and exclusive towards the consumer where they would feel special and perceived value is achieve.
The downside for adaptation is higher costs where the adaptation of the strategy to each target market would need more work for the planning/research and the production. There will not be any benefits from economies of scale doe to each product design/packaging that may vary from country to country. Another disadvantage is that adaptation would have poor speed of execution as there are more planning and research that needs to be done to cater for the needs of the particular target market.