Introduction
In the world of rapid globalisation, global marketing including market expansion has become when involving consumer preferences and complex technological advancement. When expanding internationally, all businesses should balance global efficiency with local responsiveness while deeply understanding diverse political, economic, and cultural factors in the host country. This portfolio critically evaluates global marketing concepts, including glocalisation, internationalisation triggers and motives, macro-environmental analysis of China, and market expansion strategies.
1. Portfolio Entry 1
1.1 Glocalisation Framework
Glocalisation is a mixed approach integrating global standardisation with local adaptation, thereby companies implement global strategies while accommodating local culture and market preferences in operations (Hollensen 2020).
Considering core value, glocalisation corresponds with integration-responsiveness framework, highlighting the balance between cost efficiency and local responsiveness (Prahalad and Doz 1987). Global standardisation supports cost efficiencies and low complexity whereas local adaptation ensures accomodation to local customer preferences and regulatory (Vrontis et al. 2009).
Despite ideal-sounding concept, practically, adopting glocalisation is challenging for business (Robertson 1995). Firstly, the degree of globalisation varies upon industries. Particularly, technology industry prefers global integration while food one requires higher localisation (Vrontis et al. 2009). Additionally, identifying which factors to standardise and which one requires differentiation based on the entry market is challenging, providing those factors are interdependent (Schmid and Kotulla 2011). Specifically, pricing, distribution, and promotional methods depend on product features modified. Lastly, for large multinational companies having various branches, their transnational operations are required to avoid misalignment between headquarters and subsidiaries, especially when headquarters prioritise global integration whereas the branches prefer local adaptation (Bartlett and Ghoshal 1989).
1.2 ‘Think Globally, Act Locally’
This strategy is widely considered as best practice in global marketing thanks to its combination between scale efficiencies and local market relevance. Thus, competitive advantage and customer engagement are improved (Kotler and Keller 2016).
Firstly, its primary advantage is increasing market acceptance, as customer engagement is enhanced when tailoring product and marketing strategies to local preferences (Kotler and Keller 2016). Consequently, “think globally” creates consistent brand recognition and economies of scale whereas “act locally” benefits from strong correspondence to cultural and economic differences (Vrontis et al., 2009). In culturally diverse regions, this dual benefit is highly important in maintaining competitive market share (Doz et al. 2001). Besides, glocalisation reduces risks of entry, particularly in emerging countries, where institutional environments are unstable (Cavusgil et al. 2014). Additionally, it encourages product innovation and development, compared to adopting globalisation strategies solely. Particularly, Starbucks launches region-specific beverages, including matcha-based drinks in Japan and plant-based beverages in Europe.
Another case study is McDonald, which maintains strong global branding as the leading fastfood chain while diversifying its menu to local market preferences. In India, McAloo Tikki burger, serving vegetarian preferences, helped the firm gain 11% market share and beat Burger King which did not offer the same dishes (Perody and Sudhakara 2024). In Japan, teriyaki burgers, tailored to local tastes, are among the best-selling items. It boosts high sales and expansion to approximately 3000 outlets (McDonalds 2023), strengthening its market leadership and winning over domestic brands including MOS Burger. Generally, local adaptations are not solely product innovation but a strategic tool enabling McDonald to outperform rivals by strongly aligning its product offerings with local preferences.
Critically, the success of this strategy varies upon firms’ execution capabilities including supply chain management and local market knowledge (Vignali 2001). Hence, large multinational companies including McDonald’s are in a better position to adopt this approach effectively.
2. Portfolio Entry 2
2.1 Trigger: Market Saturation
Market saturation is a classic pusher driving foreign markets’ exploration, especially when the domestic environment is matured (Hollensen 2020; Cavusgil et al. 2014). For example, having experienced slowing growth caused by high market penetration and severe competition in the US, Starbucks expanded to China and other Asian countries to increase customer pool and discover untapped revenues (Lu and Beamish 2006).
The trigger is believed to work best in consumer-facing industries in which domestic market limits further growth, and international expansion enhances brand presence and reduces costs through economies of scale (Johanson and Vahlne 2009). Besides, though market saturation encourages internationalisation, its success depends on firms’ capabilities, including managerial expertise, supply chain management, and adaptation to local market preferences (Hilmersson and Johanson, 2014). According to Erramilli (1991), if business operates without knowledge or resources, reputational risks and failure in market entry are supposed to happen.
Uppsala model further recommends that internationalisation should be adopted incrementally by firms, which emphasizes building knowledge and reducing uncertainty over time to reduce the risk of failure (Johanson and Vahlne 1977). Therefore, business should also assess their capabilities and adopt together with other drivers to retain global competitive advantage.
2.2 Motive Growth and Profit
Achieving growth and profitability is a primary motive in internationalisation (Hollensen 2020). Through market expansion, which facilitates economies of scale, businesses aim to increase revenues, diversify risk and achieve competitive advantage (Root 1994). For instance, Apple internationalises its supply and retail chain through manufacturing in China and selling its products globally. This minimizes production costs while capturing higher value markets in North America, Europe and Asia (Ghemawat 2007).
Profit motives align with market triggers, including high purchasing power, uncaptured demand, and positive exchange rates, which companies can identify to gain profits, thereby growth. Additionally, profit-oriented internationalisation varies by industry. Specifically, technology businesses obtain higher levels of globalisation thanks to network effects and standardised offerings while food industry requires higher localisation to capture customer engagement (Vrontis et al. 2009). Besides, according to Buckley and Casson (2009), emerging regions including India and Southeast Asia provide significant potential for internationalisation thanks to increasing customer demand and incomes. Many leading firms like Nike, Adidas expand their businesses to these markets to capture additional profits and growth. Nonetheless, its risk-return trade-offs should be evaluated, given fast growing markets associated with higher uncertainty (Witt and Lewin 2007).
2.3 Evaluation
Critically, both triggers and motives impact decisions on internationalisation. Working interdependently, market saturation (trigger) creates the conditions for profit and growth-seeking (motive) growing. Companies balancing triggers with motives are more likely to deliver sustainable growth internationally. When Starbucks expands to China, it needs to adapt extensively to Chinese tea-drinking habits and customer preferences. In other words, apart from triggers, effective internationalisation results from strategic alignment and operational capability, which support profit and growth motives (Zhang et al. 2015). Otherwise, it harms market shares, profit and growth, which is similar to Walmart’s unsuccessful entry into Germany (Hollensen 2020).
3. Portfolio Entry 3
3.1 Overview of China
Though being the world’s most populous country, China has overcome the rapid economic transformation, integrating market-oriented reforms with state-led initiatives to be the second-largest economy globally (Hollensen 2020). Its economy is mainly driven by exports, manufacturing, and technological innovation recently (World Bank 2023). These days, China has become a potential market for global businesses, especially for UK firms seeking growth, thanks to strong urbanisation and rising incomes from the middle class. However, due to its specific political and economical enviroment, new entrants should evaluate both potential advantages and disadvantages.
3.2 Political Risk
Unlike most European countries, China is led by single-Communist party, which implies rapid policy approval but also incurs risks for foreign firms due to priority over national firms (Henisz 2000). The key challenges lie in regulatory unpredictability, including restrictions on business ownership of foreigners in certain sectors, difficult licensing requirements and unexpected changes in tax policy (Ghemawat, 2007). Additionally, there are inconsistencies in intellectual property with high risk of infringement, which heavily impacts the technological sector (Maskus, 2000). Besides, available current tensions between this nation and Western countries impose the risks of trade restrictions and higher tariffs that disrupt business operations (Luo, 2001). However, exposure could be mitigated by understanding governance structure establishing strong relationships with government agencies, which creates substantial competitive advantages (Child and Rodrigues, 2005).
3.3 Economic Environment
China’s economy has achieved strong annual growth of over 6% annually in recent years (Hollensen, 2020). Besides, stronger customer demand, especially for premium products and services, are generated by increasing disposable income and the middle class (Fan and Li 2020). Although GBP/CNY exchange rate fluctuates, impacting UK businesses’ profit margins, the Chinese government imposes stable currency and inflation policy (Cheung and Qian 2009). Plus, manufacturing, logistics and technology firms can achieve huge benefitsas they are the focused industry in China. However, less developed provinces in interior regions still experience slower growth and lower consumer demand, thus businesses should start entering highly developed cities and provinces to avoid risks (Zhu et al. 2020).
3.4 Advantages and Disadvantages for UK Businesses
When the UK business enters the China market for the first time, it presents both benefits and challenges. Regarding potential opportunities, the large consumer base of over 1 billion people facilitates economies of scale, cost reduction and revenue growth, especially in retail, education, and technology industry (Hollensen 2020). Moreover, entering the market early allows UK businesses to gain market share rapidly and develop strong local networks before market matures. On the other hand, considering challenges, there are a huge number of domestic firms dominating the existing market. Strong localisation is required to remove cultural and language barriers and accommodate local regulations (Child & Tse, 2001). Plus, political and economic uncertainties regarding foreign direct investment incur operational costs and require strong expertise on regulations. Therefore, establishing joint ventures or partnerships with local firms is recommended to remove initial roadblocks, though firm’s control is diluted, which incurs operational risks.
- Portfolio Entry 4
As for companies planning to expand internationally, adopting relevant market expansion strategies are critical to their success in the new market. Being different in risk exposure, resource allocation, and timing, waterfall and shower approach are widely adopted by many businesses (Hollensen 2020).
Firstly, the waterfall approach highlights entrance into markets by sequence. Specifically, the business enters one country at a time, then gradually reinforces its capabilities before expanding to the next one (Johanson and Vahlne 1977). Originating from the Uppsala model, this strategy fosters local adaptation to remove uncertainty (Forsgren 2002). This enables the business to learn from experiences and gradually upgrade marketing, operations, supply chain management strategies (Hollensen, 2020). IKEA adopts this approach when entering Western European market. Thanks to gaining insights from France and Germany, it successfully refined its supply chain and store operations before entering China and the US insights (Jonsson & Foss, 2011). In spite of these benefits, the waterfall approach might be suitable for first-mover or market pioneers only as it slows down market expansion and postpone revenue generation (Cavusgil et al. 2014).
On the other hand, the shower approach leads to quick entrance into various markets, thus firms are able to build a global presence quickly (Hollensen 2020). In other words, this approach is relevant for technological, digital and marketing sectors in which prioritise speed and strong visibility to retain competitive advantage. Netflix has successfully adopted this strategy when launching its platform across Asia, Europe, and Latin America within a short period. Leveraging digital capabilities, it expands globally and scales quickly without physical infrastructure (Lobato 2019). Strategically, firms are enabled to take advantage of economies of scale and first-mover advantage thanks to the shower approach. However, on the other hand, higher risks are imposed, especially in industry requiring strong local market expertise and involving regulatory complexities (Cavusgil and Knight 2015).
Theoretically, whether which approach is adopted relies on industry, business capabilities and risk tolerance. While the retail and manufacturing industry, which require strong knowledge on local adaptation and regulatory compliance, prefers the waterfall strategy, the shower strategy is relevant for businesses offering standardised products, which rapid market penetration is much more crucial than the incremental market expertise (Hollensen 2020). In business context, many firms adopt a mixed strategy, in which they expand into early-adopter and low-risk markets rapidly (following shower strategy) whereas entering sequentially in higher-risk regions (waterfall approach) in order to balance both expertise and scale (Cavusgil et al 2014).
In conclusion, both market expansion strategies, waterfall and shower, provide clear and structured guidelines for market expansion. The former strategy emphasizes knowledge accumulation in order to adapt to the local market strategically and reduce operational risks. On the other hand, the shower strategy prioritises global presence with fast and competitive positioning. Therefore, it is recommended that businesses should take industry, organisational capacity, and market complexity into consideration in order to adopt a flexible strategy that combines both methods, thereby creating sustainable international growth, similar to what IKEA and Netflix did.
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