Is “glocalization” still the golden way for Electrolux? Is there more to be done?

• Date: 01 July 2018
• Author: Erik Møller,Svend Hollensen
• Published date: 01 July 2018
• DOI: http://doi.org/10.1002/tie.21923

VIEW FROM PRACTICE

Is “glocalization”still the golden way for Electrolux? Is there

more to be done?

Svend Hollensen

1

| Erik Møller

2

1

Department of Entrepreneurship and

Relationship Management, University of

Southern Denmark

2

Abena International A/S

Correspondence

Svend Hollensen, Department of

Entrepreneurship and Relationship

Management, University of Southern

Denmark, Alsion 2, DK - 6400 Sønderborg.

Email: svend@sam.sdu.dk

Electrolux is the company in the worldwide household appliances industry with the widest

geographic reach. But Ele ctrolux manages to cope with regionalizati on in a clear and effective

way, based on its dedicat ion to deep local consumer insight. Electrolux i s balancing between

globalization and local ization in the differen t key functions, searchi ng to take the best from

the two. We conclude that El ectrolux has chosen a true gl ocalization strate gy. But there still

remain some tough futur e challenges for Elec trolux in terms of copin g with slow and blurred

internal reporting lines.

1|INTRODUCTION

The main aim of this article is to explain and discuss the main drivers

of the “glocalization”strategy for one of the of the world’s leading

producers of appliances for households: Electrolux

1

(further descrip-

tion of the company can be found later in the article). Though the

starting point for this article’s glocalization theme is the traditional

marketing mix standardization/adaptation discussion, one of the main

contributions of this research is the more extended view of the multi-

national corporation (MNC) by integrating the whole value chain, and

not only the marketing activities.

Within the field of international business and international market-

ing, the debate over the extent of standardization (centralization) or local-

ization (decentralization) has occupied a significant part of past research.

Developed by the sociologist Robertson (1992, 1994), glocaliza-

tion is a theoretical concept that combines the two words globaliza-

tion and localization. Glocalization refers to the interface between a

global and a local marketing strategy by combining dynamics of cul-

tural homogenization and heterogenization. Whereas globalization, in

and of itself, stresses the omnipresence of corporate or cultural pro-

cesses worldwide, glocalization stresses particularism of a global idea,

product, or service. Glocalization is not merely another take on niche

marketing, now global. Rather, glocalization also adds accuracy to the

present globalization approach among scholars and practitioners.

Despite this debate, geography matters in international business

because location is specifically linked to understanding behavior of

people in specific regions due to different climate, culture, law, poli-

tics, and trade (Berill, 2015).

Berill (2015) classifies a company as global if it has sales subsidi-

aries in all of the six regions: Europe, Africa, North America, South

America, and Oceania. In this regard, Electrolux can be classified as a

truly global company. But a formal definition is not enough for being

a truly global or glocal company. The development of a global mind-

set is necessary, this global mind-set results from being open to

diverse cultural perspectives and being aware of strategic options

after considering the nuances at both the global and local level

(Chandwani, Agrawal, & Kedia, 2016).

Globalization strengthens the consciousness of the worldthat per-

vades both the local and the global. This opposes the argument that

globalization is a fully homogeneous process. On the contrary, while

globalizationgears toward some degreeof cultural homogenization,glo-

calization simultaneously permits people to identify more stronglywith

their local culture. Glocalization emphasizes that relocating a theme,

product, or serviceelsewhere has a higher chance of success when it is

accommodatedto the local culture in which it is introduced.

This glocalization strategy strives to achieve the slogan, “Think

globally but act locally,”through dynamic interdependence between

headquarters and subsidiaries. Organizations following such a strat-

egy coordinate their efforts, ensuring local flexibility while exploiting

the benefits of global integration and efficiencies, as well as ensuring

worldwide diffusion of innovation.

Principally, the value chain function should be carried out where

there is the highest competence (and the most cost-effectiveness),

and this is not necessarily at the headquarters.

The two extremes in global marketing, globalization and localiza-

tion, can be combined into the glocalization framework, as shown in

1

The case study is the sole responsibility of the two authors and does not nec-

essarily represent the current strategy of Electrolux.

DOI: 10.1002/tie.21923

Thunderbird Int. Bus. Rev. 2018;60:463–476. wileyonlinelibrary.com/journal/tie © 2017 Wiley Periodicals, Inc. 463