If you’re contemplating market expansion but encounter difficulties in solidifying a global presence, then you might need to change your strategy. Adopting a multidomestic approach could be just what you need.
Multidomestic strategy is when a business ventures into international markets while trying to fit the cultural, societal, and legal aspects of each new market. This is a very tricky process and the reason why you need tools like Weglot to help you overcome linguistic and localization challenges.
In this post, we'll delve into multidomestic strategies, defining what they are, illustrating their core characteristics, and distinguishing them from global strategies. Moreover, we'll delve into the potential benefits and challenges of choosing a multidomestic approach.
So, if you're ready to explore new markets, let's take a deep dive into understanding and implementing a multidomestic strategy!
What is a Multidomestic Strategy?
In an increasingly interconnected world, where borders are becoming more and more obsolete, successful businesses often win customers by understanding and catering to local cultures, needs, and tastes. Enter the multidomestic strategy – a unique business model where companies adapt their products or services to align with specific local markets.
Implementing a multidomestic strategy involves more than just translating product descriptions into a different language. Instead, it’s all about creating a high degree of local responsiveness with extensive localization procedures that show sensitivity to individual markets. It can involve altering feature sets, adopting varying pricing models, or evolving the product design to connect closely with local expectations and preferences.
This strategy stands distinct from other international expansion strategies in its emphasis on localization.
As Augustin Prot, Co-founder and CEO of Weglot, puts it: “Unlike a standard, one-size-fits-all global strategy, a multidomestic approach offers a custom, market-specific solution that caters directly to the specific target audience”.
Types of International Business Strategies
As businesses seek to expand their horizons globally, a couple of prominent methods for international growth come up, aside from a multidomestic strategy: global and transnational strategies.
Global Marketing Strategy
A global strategy provides a standardized product or service across diverse international markets, leveraging the benefits of uniformity and efficiency. Here, the main goal isn’t so much to create a powerful and bespoke international presence, but instead to keep the costs low and build economies of scale.
One successful example is Apple, which has kept its branding and marketing strategies almost identical in every country. Its universal products and eye-catching advertising appeal to international audiences without much effort to localize their offers.
The trade-off, as you can probably guess, is this strategy's potential lack of local responsiveness, which is a big part of multidomestic strategies.
Transnational Marketing Strategy
On the flip side is the transnational model, a hybrid strategy aiming to marry the efficiency of global strategizing with the pros of local responsiveness.
McDonald's is one of the most successful examples of a transnational strategy because it creates specific regional menus worldwide while still maintaining a cohesive brand image. For instance, its Filipino restaurants offer the Chicken McDo with McSpaghetti, a wildly popular dish.
It’s the same with almost every country where there is a McDonald's franchise – it creates seasonal menus and special items that cater to the local tastes, while its main headquarters are located in Chicago.
So how does this compare to a multidomestic strategy?
Unlike McDonald's and Apple, which keep their branding consistent no matter the local market, Procter & Gamble changes the branding entirely, depending on the country, and that includes the product name, colors, logo, and everything else.
As you can see in both cases, this approach allows for autonomous decision-making, with customizable solutions for different markets and largely independent operations. The local responsiveness is fully optimized, but that strategy comes with a price, which is reduced global integration.
Simply said, putting this much effort into localized marketing means that you can’t apply your strategy on a more global scale as Apple and McDonald's have done.
The transnational strategy, on the other hand, requires integrated decision-making and offers a blended strategic approach, fostering high interdependencies between businesses in different countries.
Advantages and Disadvantages of Multidomestic Strategies
Over the years, many global players, like Procter & Gamble, have successfully adopted a multidomestic strategy, realizing exceptional growth in various markets. However, in order to achieve the full potential of this type of strategy, you need to be aware of the potential drawbacks as well as the benefits.
These tools can be very helpful in dealing with the problems that come with multidomestic strategies. For example, the process of localization, which is adapting things to fit local languages and cultures, can become very complicated, especially when dealing with dialects and cultural specifics.
Developing and Implementing a Multidomestic Strategy
Planning to take your business global? Before you move forward, it's crucial to thoroughly understand the terrain you're stepping into. Implementing a multidomestic strategy can be intricate, but with a well-calculated approach, your global aspirations can truly take flight.
Let's inspect some important factors in developing and implementing this type of strategy.
1. Understand the Market
Take your time researching local cultures, demographics, and customer behaviors in your target market. The best way to gather these critical insights is through comprehensive market research methods such as surveys, interviews, and consumer data analytics.
Starbucks and its Australian migration attempt are a great example of what not to do.
It assumed that its American business model would hit the success mark, given its global brand reach. However, it overlooked Australia's rich local café culture and ended up competing with local coffee shops that were more attractive to Australian consumers.
Spotting its strategic error, Starbucks revamped its strategy by emphasizing local Australian tastes and sourcing locally, eventually managing to restore its brand image and reconnect with Australian consumers.
2. Adapt the Product
A one-size-fits-all approach rarely works when charting the seas of global commerce. There's no harm in altering your products or services to meet the specific expectations of each local market.
Frito-Lay has excelled in the snack food industry by tailoring its products to meet diverse regional taste preferences. This approach included unique flavors and local ingredients, complementing culturally resonant marketing campaigns.
By establishing local manufacturing units, Frito-Lay effectively reduced costs and fortified its market position. This focus on local preferences has not only increased sales and market share but also enhanced Frito-Lay's brand recognition globally as a company that values and understands local tastes.
3. Localize Marketing Campaigns
Your marketing messages should be as diverse as the markets they cater to. That might mean using images that resonate with the local environment or crafting your message in the local language and tone, connecting deeply with the native audience.
A great example of that is Coca-Cola's “Share a Coke” campaign, which changed the names on the bottles depending on the location. In the US, the bottles said “Share a Coke with John”, “Sarah”, or “Bobby”, while in Ireland, they bore Irish names like “Aoife” and “Oisín”.
In 2015, Coca-Cola even created a campaign in Mexico that focused its attention on visually impaired people and released cans with names in Braille.
Technology drives innovation in business. Tools like Weglot can help you get a head start in website localization and translation, while SurveySparrow is a great choice for conducting interactive surveys, allowing you to connect with your potential new audience.
Common Challenges and Solutions
Navigating the global market can be tricky. Let's look at how to overcome some common challenges.
High Operational Costs: These are often associated with localization and implementing diverse strategies across different markets. To prevent going over budget, make sure you practice efficient resource allocation and operational efficiency.
Coordinating Global Operations: From time-zone differences to managing various country-specific strategies, things can get chaotic. This problem can be curbed with centralized databases or coordinating centers, guiding you through the turbulence.
Maintaining Brand Consistency: Your brand might wear different colors in various markets due to localized marketing efforts. To overcome this, establish global brand guidelines. These principles underline the core essence of your identity, ensuring consistency across all locales.
Legal Requirements: Getting tangled in the legal web is a common worry when entering a new market. But, working with local legal experts or business consultants can be your lifeboat, helping you navigate the legal seas with confidence.
Language and cultural barriers: You’ll need professional translation and localization services to help you overcome these obstacles and seamlessly adapt to your target markets.
The Role of Localization in Multidomestic Strategies
If you're looking to deploy a multidomestic strategy, there are many different aspects of your business offering that you'll need to consider localizing, such as products, services, marketing campaigns and materials, branding, and more.
Let’s take a look.
Language, Imagery, and User Interface
Language localization extends beyond mere translation. It involves incorporating local dialects, idioms, cultural expressions, and phrases into your content to create an emotional connection with your audience. This level of adaptation not only builds trust but also intensifies audience engagement.
Just as the linguistic aspects are crucial, so are visual elements like imagery and the user interface design. They should be tailored to reflect local aesthetics and customer preferences.
For instance, if a brand is localizing content for a Middle Eastern market, using right-to-left text alignment on its website and culturally relevant images would make the user interface more relatable and user-friendly.
Payment Processes and Currencies
In terms of satisfying your local consumer and ensuring a successful multidomestic strategy, cashing in on local payment processors and dealing in local currencies is vital. Businesses should ensure easy integration of popular payment processes, keeping in mind their security, popularity, and the customer's trust.
However, accepting various currencies presents a bit of a double-edged sword. While it increases customer convenience, the bull or bear run of foreign exchange markets could have a significant impact on earnings. Despite these uncertainties, businesses must remember that customers unfailingly prefer the comfort and clarity of paying in their own currency.
Meanwhile, we see a surge in the popularity of cryptocurrencies and digital transactions globally, although acceptance varies from market to market. Companies are now considering these digital assets as a potential alternative payment method to cater to a progressively tech-savvy audience.
One organization that has masterfully overcome payment and currency barriers is Rakuten, Japan's largest eCommerce site. The brand offers diverse payment methods, including bank transfers, credit card payments, and Rakuten points, and even allows transactions in Bitcoin.
Despite fluctuating cryptocurrency values and diverse methods, Rakuten's successful integration showcases the benefits of varied payment options in expanding customer reach and conversion.
How Weglot Can Facilitate Your Multidomestic Strategy
A key factor driving the success of a multidomestic strategy is the ability to execute accurate and timely language translation. The task of translating web content into multiple languages and maintaining accurate translation of new or updated content can present a significant challenge.
This is where Weglot comes in, a translation management solution precisely designed to adeptly navigate through these challenges. Weglot can swiftly and accurately translate and display all web content in multiple languages.
Even better, Weglot offers more than mere translation; it comes equipped with an array of features essential for effective localization, like:
Dedicated language URLs for each translated version of your website, thereby enhancing the SEO performance.
Hreflang tags that signal to search engines which version of your content should be served to which audience.
A translation glossary that lets you define the translation for specific words and phrases and save it for the future. For example, metaphors often make sense only in one language, and instead of translating them directly, you need to find the equivalent in the target language.
Moreover, it ensures metadata translation, making your products and services easily discoverable in local searches.
To fully appreciate the transformational power of Weglot, take a look at this real-life example.
Volant is a cycling clothing brand that has successfully widened its reach to numerous European markets using Weglot's progressive translation capabilities. Initially, it tried manually translating their Shopify store to German and Swedish, but that proved too challenging and restricted its expansion opportunities.
However, with Weglot’s help, it managed to translate its 100k-word website into 9 different languages in less than a month, covering 11 major European markets.
Choosing the Right Global Expansion Strategy for Your Business
Choosing the right global expansion strategy is a critical factor in ensuring your business’s success on the international stage. Among the various strategies, a multidomestic approach is worth serious consideration due to its unique competitive advantages.
However, remember that the best strategy may vary depending on the specific context of your company and its goals. Whether a multidomestic, global, or transnational strategy would work best for your business depends greatly on your target market, product, and capacity for localized operations.
Adopting a comprehensive translation and localization tool like Weglot can significantly streamline the implementation of a successful multidomestic strategy. Thanks to its automation capabilities, Weglot offers businesses a time-efficient and cost-effective approach.
You can explore the potential of Weglot by trying it for free and discover first-hand how it can support and improve your multidomestic strategy!
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