We hear these two words a lot: Globalization and Internationalization. So, what is the difference between globalization and internationalization? This article will skip the macroeconomic side of these terms and concentrate on what they mean for companies and how language plays an integral role in the globalization and internationalization processes.
While businesses go global - an obligation for growth in today’s heavily connected world - they have to undertake structured steps of globalization, define their strategies, and adapt their content to infiltrate foreign markets.
In this article, we will define Globalization and Internationalization from a language service provider perspective, and outline the importance of implementing an internationalization strategy for businesses with a globalization goal.
What is Globalization?
Globalization, also known as “g11n”, is the process of operating on a global scale. Globalization has expanded since the eighteenth century thanks to advancements in transportation, the internet, and communication technologies.
In the technology and data sector, globalization is defined as preparing products and services in a way that will resonate with a global audience. It is about creating a framework of expansion on which you can build and scale efficiently. For instance, if you want to break into the Arabic market, your content should be from right to left. Globalization is a broad goal that aims to adapt a product to a global audience. Everyone working on the product, including creators, designers, and developers, should be involved in this globalization process.
There are many pros and cons of globalization, but the greatest one is that an effective globalization strategy will help you break into new markets which will inevitably increase traffic and customers. What is globalization in business?
Let’s look at some globalization examples:
1) Amazon and eBay make it easy to buy products from individuals and businesses on the other side of the planet. Product description, categories, and reviews are localized to make consumers feel at home when navigating the sites. 2) Large restaurant chains like McDonald’s successfully operate in dozens of countries. They make changes in their offers depending on the differences in the country’s cuisine. This includes removing and adding products. If McDonald’s had offered McBacon in a Muslim country, almost no one would step in, right? 3) Netflix operates in more than 190 countries. They undertook a globalization exercise in order to offer customized content for almost every market they operate in. 4) YouTube, needless to say, actively operates in any country that has an internet connection. Their ads and recommendations are highly customized for each individual. The country trends are taken into account for sure.
What is Internationalization?
Internationalization is an early step in a company’s globalization mission and is the process of making product content adaptable so that it can be easily localized in multiple languages. A product that can resonate with foreign markets without the need for a total redesign is considered internationalized. Internationalization is often written in English as i18n, where 18 is the number of letters between i and n in the English word “internationalization” (you can count the letters, there are 18 of them). Developing a well-rounded internationalization strategy is crucial to expanding to new markets. It also plays a significant role in the groundwork of a localization process. If you want to learn more about internationalization and localization, check our latest blog post, where we dig deeper into these two concepts.
Internationalization can include but is not limited to: creating space in user interfaces, making graphics with examples for documents, using tools that are able to give support to international character sets, and avoiding hard-coding the text in buttons. In short, internationalization is the act of preparing your concept, your product, your service, and tweaking every necessary item in your content to enter a new market. The more adaptable your content is, the better your chances are of success in a new market.
Internationalization can be helpful on its own, even if you don’t localize later. But, combining the two processes ensures content both resonates and scales in multiple regions. It is nowadays seen as a necessary step to take before going international. Locally successful concepts, products, and services often fail when they try to export without considering the local market.
Now, you might think that only small businesses lacking the necessary resources to internationalize will forgo such an integral expansion step. Well, not entirely true. The most famous example is WalMart’s epic failure in Germany that cost the company over a billion dollars when this retailing giant forgot that ignoring cultural differences, customer habits, and local labor laws (!) while entering a new market, is nothing but fatal to your business.
What are some of the benefits that internationalization can give you?
Firstly, it can be a source of new revenue. If the domestic market is saturated then by launching your product or service abroad you can expand your customer base and increase revenues to new levels.
Internationalization allows you to deliver more solutions to more people. If your company offers solutions and products that help your customers improve their lives in some way, internationalization is a way to reach more people. When you consider internationalizing your business, you are able to offer an even larger audience the solutions they are looking for.
If you only focus on your domestic market you may need to be more innovative in order to stay competitive. Changes in quality, design, development, and the incorporation of new technologies that come with internationalization can help you to improve and diversify. This growth can have a knock-on effect in the domestic market with the adoption of international trends.
Engaging in internationalization can provide the impetus that is lacking to hire employees from other countries, giving your company access to different working practices and fields of knowledge.
Furthermore, conducting market research in new markets will bring information that will make your organization more complete. You will need to understand local needs and cultural habits. Understanding these factors will help you with customer relations and the adaptation of products and services.
By expanding your business internationally you will learn more about financial markets and will have access to foreign investment opportunities. In some cases those opportunities are not even available to local companies in those markets as sometimes governments only make them available to foreign companies,in order to stimulate foreign trade. This can result in your company making new partners and signing new agreements.
Engaging with foreign clients means that you can truly say your company is international which will raise your brand's business reputation and attract attention. This can also increase revenues from the domestic market due to increased exposure and domestic customers may have more confidence in your product or service if they see that it is also trusted by international clients.
Lastly, all markets are subject to economic variations that can directly influence your business. Internationalization will allow you to diversify your business and reduce risk at times of crisis. If there is a drop in sales in one market then it may be offset by an increase in sales in another.
Internationalizing a company's business will allow it to reap the benefits over the long-term, but the decision to internationalize is surrounded by challenges. It is important to create an effective internationalization strategy with the right partner in order to minimize risks that are part and parcel of engaging in business activities in new markets.
What is the Difference Between Globalization and Internationalization?
Now that we have defined globalization and internationalization, you should already have some idea of the differences between the two terms. Let’s have a close look at international business vs globalization. Globalization and Internationalization are often complementary (and sometimes used as synonyms). However, the easiest way to separate the terms is to think of internationalization as one of the first steps in the globalization process.
Internationalization is the process of generalizing a product so that it can be presented in multiple languages without the need to redesign. In other words, an internationalization process definiton is the process of determining international markets and preparing your content and message in entering these markets.
If we look at these definitions from a broader perspective, globalization sees the world as one huge country where cultures and content are homogeneous in nature. Internationalization sees a world that contains many countries distinguished by borders and cultures where exchanges between these countries are encouraged and actively pursued.
Globalization has come about as a result of the desires of the global economies whereas internationalization is the process which has allowed for globalization to be achieved. Individuals perceived that a structure needed to be put in place in order to achieve their goals and globalization forms the basis of this structure.
While internationalization is one of several subsets that exist within globalization, globalization is the name given to this structure that people wanted to set up. Due to the fact that internationalization is a part of that structure, it can be deemed to be a subset of Globalization While globalization is linked to the economic policies of sovereign states, internationalization is more related to individuals, companies or even businesses that provide goods and services.
Many factors come into play when we examine the globalization process, these factors can include the nature of existing infrastructure, telecommunications networks, and even logistics, all of which have a strong impact on the globalization process. On the other hand, several factors such as cultural tastes and preferences and even local traditions can play a major role in internationalization.
Some of the benefits of globalization are that it removes visa obligations for visitors, it can eliminate barriers to trade, which can be tariff barriers such as taxes or duties on goods from abroad, or even non-tariff barriers such as quotas, embargoes, sanctions and levies. Globalization can even bring about the liberalization of investment regulations.
Internationalization allows for the sourcing, production and sale of materials from one or more countries, as well as allowing companies to set up branches or subsidiaries in other countries in order to carry out business.
It is important to remember that globalization is an economic process, which affects the production, development and management of material wealth, whereas internationalization is a process of improvisation, making or doing something not planned beforehand, using whatever can be found to hand at that time.
Some of the organizations that are involved with the implementation of globalization are the International Monetary Fund, the World Bank, and the World Trade Organization. Some of the bodies and agreements that have facilitated an increase in internationalization are the European Union, the Asia Pacific Economic Cooperation forum, and the North American Free Trade Agreement.
Internationalization is a Step Towards Globalization
If a company is planning to go global, or globalize, it must implement a strategy if it is to have any chance of success in today’s extensively competitive international business environment. One of the first steps to undertake in the globalization process of your business is internationalization.
Businesses must prepare their products, services, website, and other relevant content to be received by a new market. Internationalization examples can go from adapting the product itself to the local market to changing the framework of your website so that it remains readable in the new language. Globalization and Internationalization both require know-how and planning and need to be done by experts. They can be in-house or outsourced to companies dealing daily with internationalizing products, services, content, or websites. If you skip the internationalization step in your globalization process you will undermine all of your efforts.
Are you still not sure how to proceed? MotaWord’s team of experts consists of industry leaders who can help and guide you through the process. Send us a message and we’ll respond in minutes.
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