Globalization is a process by which businesses develop international influence and start operating on a global scale. This phenomenon is reshaping the business landscape and redefining competitive advantages. Since international trade is set to reach nearly a staggering $32 trillion in 2024, this trend shows no signs of slowing down.
Businesses can use a globalization strategy to tap into international markets, access diverse consumer bases, and leverage cost efficiencies. In order to stay competitive, they must embrace this fundamental shift. It can quite literally open up a world of opportunities.
In this article, we’ll explore how exactly you can take advantage of globalization. We’ll also look at specific strategies that can help you not just survive but also truly thrive in the global economy.
The benefits of globalization
When companies expand their reach beyond local markets, they can tap into a diverse pool of customers, ideas, and resources.
Let’s look at some specific benefits you can achieve from globalization:
Access to new markets
One of the greatest advantages of globalization is that it opens up a whole world of new markets for businesses. With the Internet and global trade agreements, it’s now easier than ever for companies to sell their products and services internationally. This means you have the potential to reach billions of new customers across the globe.
Even small businesses can export their goods to other countries. And with the rise of e-commerce, you don’t even need a physical store to sell overseas. You can instead set up an online shop and ship your products worldwide.
Thanks to globalization, the world is a much smaller place, which is great news for entrepreneurs who are looking to grow their customer base.
Economies of scale
Economies of scale occur when companies reduce their costs by producing more goods. This happens because spreading fixed costs—like machinery and rent—over a larger number of products lowers the cost per item. For this reason, increasing production can significantly benefit businesses and consumers alike.
For instance, think about a car manufacturer like Toyota. By producing millions of vehicles each year, the company can negotiate lower prices for parts and raw materials and will ultimately pass those savings on to consumers.
Another great example is the tech giant Apple. By producing large quantities of iPhones, Apple can leverage its size to negotiate lower prices for components, such as screens and chips, which it sources from various countries.
Globalization also opens doors for companies to tap into more affordable labor markets. For example, take the garment industry in Bangladesh, where many global brands have set up production. These brands can produce clothing at a fraction of the labor cost, which creates economies of scale while providing jobs to millions in developing nations.
Knowledge and technology sharing
One of the most exciting aspects of globalization is how it fosters knowledge and technology sharing across borders. Imagine a small start-up in Kenya that is developing a groundbreaking app for mobile banking. Thanks to globalization, this innovative idea can quickly spread to tech enthusiasts in the Silicon Valley, who might adopt it to enhance their own services.
The International Thermonuclear Experimental Reactor project is another excellent example. This ambitious project involves collaboration among 35 different countries, including the United States, China, and the countries in the European Union, to develop nuclear fusion as a viable energy source. By pooling resources and expertise, these nations aim to create a sustainable energy solution that could revolutionize the global energy landscape.
This exchange not only accelerates progress and contributes to global economic growth but also bridges gaps between developed and developing countries.
Diverse workforce
The benefits of globalization extend beyond just financial gain. When companies hire employees from various backgrounds, they can tap into a rich pool of perspectives and ideas that drive innovation and creativity.
Moreover, having a diverse team fosters an inclusive environment that prioritizes valuing and truly hearing all employees. This can greatly boost morale and productivity.
Unilever, for example, promotes diversity within its workforce. The company continuously improves its internal culture and strives to more effectively understand its diverse consumer base by encouraging women and minorities to take on leadership roles.
Unilever boasts a diverse workforce. (Source)
How to overcome globalization challenges
Expanding into global markets also comes with challenges. You’ll need to navigate new laws and different cultures as your company grows into new markets. But with the right strategy and partners, you can reap ample rewards for your efforts.
Here are some challenges you may encounter, as well as strategies to combat them:
Cultural differences
When managing international prospects, customers, and other stakeholders, understanding cultural differences is important for building strong relationships and achieving business success. Each culture has its own unique norms, values, and communication styles, which can impact business interactions.
Another thing to keep in mind is that decision-making processes can be very different across cultures. For example, Latin American cultures prefer a more friendly and relationship-focused negotiation style, while in the United States, a straightforward, results-oriented approach is more common. Differences like this can affect how you present and negotiate proposals.
Smartling pro tip
Translation services play a crucial role in bridging cultural gaps and nurturing effective communication across diverse languages and cultures. Culturally sensitive translations help businesses and individuals convey their message accurately while respecting their audiences.
That’s why you need skilled translators, preferably native speakers. These translators don’t just translate idioms and expressions literally—they also adapt them to resonate with the target audience while preserving the intended meaning.
Smartling’s comprehensive translation and localization solutions help you achieve just that. When you partner with us, you gain access to a network of professional linguists who specialize in culturally relevant adaptations. With these high-quality translations, you’ll be able to more effectively communicate with global audiences.
Language barriers
When companies venture into international markets, they often encounter challenges due to different languages and cultural nuances. For instance, a marketing strategy that resonates with one target audience might completely miss the mark for another due to mistranslations or cultural misunderstandings.
Smartling pro tip
In order to bridge language gaps, invest in translation services that not only translate text but also localize content to fit local cultures and preferences. This means hiring professional translators and native speakers who understand the nuances in both the source and target languages.
Smartling’s vast network of native-speaking translators helps businesses overcome language barriers with expert, high-quality translations.
Legal and regulatory compliance
Global businesses must navigate different legal systems as they expand, and legal documents need to comply with specific local laws and regulations. Accurate legal translation helps businesses understand and comply with foreign laws, smoothing international business operations and reducing the risk of legal disputes.
Each country has its own legal system and cultural contexts that influence the interpretation and application of laws. Translators need to navigate these differences to accurately convey legal concepts and ensure that the translated text is relevant and understandable in foreign markets.
Smartling pro tip
Depending on your content, you should verify that your translation provider complies with PCI Level 1, SOC 2, HIPAA, GDPR, ISO 17100, ISO 13485, and ISO 9001 for language services.
For more information on Smartling’s compliance certifications, visit our security page.
Supply chain management
Multinational corporations frequently face challenges in managing global supply chains. Several factors can cause supply chain disruptions. For example, geopolitical tensions can lead to trade restrictions or tariffs, which impact the flow of goods.
Natural disasters, pandemics, and cultural misunderstandings can also disrupt supply chains. The COVID-19 pandemic, for instance, showed how fragile global supply chains can be when factories shut down and shipping routes experienced disruptions.
So how can you tackle these challenges? You can diversify your suppliers and sourcing regions to mitigate the risks of over-reliance on a single market.
Smartling pro tip
Translation services ensure that all parties—suppliers, manufacturers, logistics providers, and customers—understand each other and prevent misunderstandings that could lead to supply chain delays or errors. For instance, accurately translating important documents like purchase orders, shipping instructions, and contracts keeps everyone on the same page, no matter where they are.
Smartling enhances this process by leveraging advanced translation services and a network of professional linguists to deliver precise, contextually relevant translations. Moreover, our platform makes managing multilingual content simpler than ever before so you can have smooth operations across the globe.
Real-world examples: How businesses have experienced globalization success
Several prominent companies—such as Coca-Cola, SAP, IBM, Domino’s, and McDonald’s—have achieved successful globalization strategies. Each of these companies uses unique approaches to cater to diverse markets while maintaining a cohesive brand identity.
Let’s take a closer look at the strategies some top global companies use:
GoFundMe
GoFundMe is a great example of a company that has fully embraced globalization to grow its business. This crowdfunding platform operates globally and, as of now, is present in multiple countries, including the United States, Canada, the United Kingdom, and several others in Europe.
In an insightful panel discussion at our 2022 Global Ready Conference, Ace Yamaguchi—who leads GoFundMe’s localization efforts—shared how the company uses Smartling to efficiently translate content across its product, legal, customer support, and marketing teams.
“There [are] a couple good parts [to] having content [translation] centralized,” Ace says. “One is [leveraging] translation memory, which makes your content more consistent across all of the content types. That itself is a big plus in terms of having the same messaging for any content that you produce.”
Here are some key highlights from GoFundMe’s strategy:
- The company streamlined its localization workflow by integrating Smartling with tools like Zendesk and WordPress.
- GoFundMe scaled translation by extending their localization team to include Smartling's managed services.
- Centralizing localization has helped GoFundMe achieve more consistent messaging, higher translation quality, and lower costs.
ePlaneAI
ePlaneAI is an innovative platform that has transformed the global airline procurement and aftermarket parts industry. As of today, ePlaneAI has a presence in over 50 regions worldwide.
Initially, ePlaneAI’s online aviation marketplace was only available in English and simplified Chinese, which limited its potential audience. Recognizing its need for a broader international presence, ePlaneAI partnered with Smartling to streamline its translation process.
Instead of manually translating content, which would have required thousands of hours of engineering time, ePlaneAI implemented Smartling’s translation proxy, the Global Delivery Network. This innovative solution allowed its team to automate translations and allowed the ePlaneAI app to instantly switch between different languages based on user preferences.
As a result, ePlaneAI now offers its platform in 11 languages, significantly enhancing its user experience for a global audience. This shift not only saved time but also allowed its team to focus on core development—proving that with the right tools, businesses can effectively navigate the complexities of globalization and thrive in new markets.
How Smartling supports your globalization strategy
Smartling makes managing multilingual content at scale easy. (Source)
Smartling is a powerful ally for businesses looking to enhance their globalization strategy. We simplify the translation and localization process with a blend of advanced technology and human expertise. Our translation services allow you to quickly translate content while maintaining cultural nuances so your message resonates more deeply with local audiences.
With Smartling’s translation management system, you can easily manage all your translation workflows in a single place, streamlining the process and maintaining brand consistency across different markets. Whether you’re looking to adapt your website, software, or technical materials for target markets, our tools allow you to create a seamless experience for your users, no matter where they are in the world.
Scale your global expansion efforts with Smartling—book a meeting today.
