Globalization vs. Localization: What’s the Difference?

Do you address the whole world, or individual markets? Is your product strategy one-size-fits-all, or customized for different audiences? That’s the globalization versus localization debate. We don’t see them as being in competition – so it isn’t a question of either/or. In fact, the ideal approach for big businesses (and smaller ones with big ideas) is to adopt both localization and globalization, in concert. But what actually are they? Here are their definitions, differences, and what each delivers for your organization.

The difference between globalization and localization

Think of the biggest companies you interact with every day – Google, Microsoft, Amazon, Netflix, and so on. You’d say they’re all “global,” offering the same customer experience to people the world over. And you’d be right. But here’s the thing: they’re also among the most localized companies out there. 

Global outlook, local needs

Their products and services, while satisfying the same market needs with the same brand values worldwide, contain detailed differences when you look at them market by market. From the playlists of media companies to the software of multinationals, the product the consumer experiences is subtly different from country to country… even from state to state. Kansas and California aren’t the same market. And Microsoft’s “monolithic” Windows OS is produced in dozens of versions.

Getting that enterprise mindset

So, these companies have a global vision for what they want to sell… but they also want to customize those products and services for local audiences, to maximize their market opportunity in each area. If localization is up close and personal, understanding the subtle nuances that separate cultures and markets, globalization is the bird’s-eye view. It’s the “enterprise mindset” that decides what you want to be known for and the common factors that all audiences share. 

Apply both strategies for success

In many cases, “going global” demands local smarts, too. Globalization and localization are different sides of the same coin. So make sure you understand both – whether you’re enterprise-scale, enterprise-ready, or enterprise-someday.

What is localization?

So, let’s define localization as the process of adapting your products and services to the specific conditions of a specific market with a shared culture and values. And while that includes language, localization does not stop with translation. It’s much bigger than that. 

(Actually, even “translation” doesn’t stop with translation. The best approach takes note of culture, idioms, figures of speech: think of the differences between the Spanish spoken in coastal Spain, Los Angeles, and rural Mexico.) 

Factors of localization

The goal of localization is content that “feels right” to people in the market you’re addressing. With language, it’s the subtleties of usage that create a sense of comfort among consumers: they know you understand them. And that extends to brand values. Cultures vary in what they consider positive and meaningful; a brand claim that hits the mark in the USA may fall flat in Japan. A great translator is as much artist as linguist.

Localization is not limited to words, either. Visuals, patterns, and even colors carry different appeal from country to country. Look around the world and you’ll see small but significant changes in the way a brand presents itself, from photography to fonts; all these are part of an effective localization rollout.

Other factors are easier. The way dates, times, and currencies are written; the weights and measures familiar to an audience; the style guides in use by mass media all have an impact. (The UK and the USA are “divided by a common language”; conventions for headlines and date formats differ on each side of the Atlantic). Small things perhaps – but they add up to big differences.

And then there’s the user interface, or UI. “Reading gravity” – the way a person’s eye moves across a page – is different around the world; many Chinese languages prefer top to bottom over left to right, while both China and Japan start their books on what Europeans see as the last page. These preferences have a place in how websites and applications are designed, too. And they start small: if your Submit button is too short to contain the word in one of the 17 languages a top-10 SaaS serves, it’ll look odd.

Localization is a 360° view of culture

So, localization goes beyond words: it’s not just language, but broader culture. It’s a deep understanding of a population with the same everyday experiences – and knowledge of what’s needed to make your products and services play in its competitive landscape. It’s far from easy. But for companies with a global outlook, localization pays dividends.

What is globalization?

Globalization is different. It’s more worldview than local know-how, more business mindset than cultural commentator. It’s this question: Do you want to be a niche player, addressing a rare pain point for a single group of people… or do you want your name to be known by millions worldwide, as a trusted brand across borders, cultures, and continents? Where localization explores the differences between cultures, globalization is about finding similarities.

Globalization starts in the corner office and goes on the front page of the strategic plan. It’s a deliberate decision to create products and services with global appeal, to make the same basic brand promise to a wide variety of markets with the goal of becoming the go-to solution for the problem you solve. The way you communicate that promise might differ by market – and that’s where localization comes in. But globalization is the big idea – your overarching goal for the future.

Factors of globalization

Of course, the primary driver of globalization is making more money. Every entrepreneur dreams of success at scale, being number one in multiple markets worldwide. But other reasons exist. 

Like this: the more you sell, the less you spend making each product. Economies of scale drive many globalization strategies; when development costs are amortized across a million SKUs instead of a thousand, prices can be more competitive and profits higher. Globalization is good for the bottom line.

Another advantage of globalization is a simplified portfolio. Automobiles look different around the world – but many share the same basic floor plans and engines, reused across markets for efficiency. Swatch watches come in thousands of varieties – but all are identical behind the face. A global outlook sees such opportunities for standardizing products and processes, and takes them. 

And when your risk is spread across different markets, you’re diversified, no longer reliant on your home market. It’s a goal of every global enterprise, from the industrial era to today’s information-driven economy. 

Globalization: success, squared

Globalization is treating the world as your marketplace, and finding ways to sell to it. The takeaway here: by applying a global strategy at the local level in each market, you win either way. 

Pros and cons of globalization and localization

It’s clear by now that globalization and localization work together. So to finish, let’s look at what happens if you limit yourself to just one of them. 

Global dreams, no local knowledge

Some companies can succeed by selling the same product (almost) everywhere – take the iPhone. But Apples are rare. And the business end of an iOS device – the user interface – is, of course, a lot more localized than many imagine. 

So a purely global outlook, without adaptation to each market, is unlikely to put you in the Fortune 500. You can make the best chat/commerce app in the world, but it won’t have appeal beyond its home market if it’s only available in Chinese. And it’s not limited to technology: rice, cheese, and even chocolate are far from universal staples. (Well, we’d like chocolate to be a staple, anyway). Trade secret: no product is the same everywhere. 

Local focus, limited horizons

However, an approach that never gets beyond the local has problems, too. A product strategy of designing a different product tailored to each market carries zero economies of scale; even worse, it leads to a bloated product portfolio and high complexity in your supply chains. Such a company isn’t really international; it’s a whole set of different companies without much in common. 

See the issue here? Globalization and localization are both great… if taken together. The whole is greater than the sum of its parts. 

Do both with Lokalise

That’s what Lokalise does; it provides you with a platform for both localization and globalization, both sides of the same coin. Why not see how it works for yourself, with this 14-day free trial?

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