Globalization Vs Internationalization: the Difference (2024)

For people unfamiliar with the localization process, both terms often used by agencies and translation providers may all sound the same: Globalization of the company or part of its operations and internationalization of the software, apps, UI, and content. Even like synonyms. But the terms are quite different for professionals in the localization services field.

But what exactly is internationalization, and how does it compare to globalization? And are there significant differences between the two terms? What are the advantages of the two? Why do some companies prefer one over the other?

Let us play corporate business strategists for a moment and explore this topic together. You'll learn everything you need to distinguish between the terms using clear examples. You'll get the help you need to decide which process is currently close to your business requirements.

Globalization vs. Internationalization Explained Simply

Both of these concepts will impact the business world: whether it is a large multinational corporation, a medium-sized company, or a small local family business. It is critical to go global and ensure that corporate content meets the needs of a worldwide audience. Especially in a world where customers can find a wealth of resources and competing offers with just a few clicks on the Internet.

Global reach is easy now, and it's the same in Europe, America, and the rest of the world.

Related content: Localization vs Internationalization: 2 Sides, Same Coin

In simple terms, globalization means a company's expansion abroad to different international markets with all its legal, logistics, production, customer, accounting, internal operations, and marketing aspects. The world's economies will always look different in business because of globalization.

Example 1: Ikea

Let us take Ikea as an example. The company is one of the best examples of globalization in business. Ikea is a Swedish company that is internationally known and present in 31 countries around the globe.

What does that mean? They have local branches in different countries, thousands of employees who share the same corporate values, and customers who love the simplicity of their furniture designs.

Globalization also meant that Ikea, as a company, had to make sure:

• It had legal operations in each country
• That brand was protected in each of its 31 markets
• That the blue and yellow color scheme was immediately associated with the brand, and
• That its communications reflected the same values on the international market

Among other things, of course.

Does the globalization of Ikea's business mean that every store gets the same range of products? Or the same communication?

No. But the company had to ensure the multilingual international audience had access to all needed resources.

This is precisely where the internationalization of the Ikea business comes in.

The internationalization process considers local preferences, special interests, and significant market differences. The method of internationalization involves many steps that must be taken into account.

In computing, internationalization is often abbreviated as i18n. Together with localization (l10n), they are means of adapting computer software to different languages. It also includes regional peculiarities and technical requirements of a target language. Internationalization is designing a software application and its UI to be adapted to various languages and regions without making significant variations.

Internationalizationis the process of making applications international in appearance and operation. Internationalization is essential for any website or software app to be marketable in multiple countries where different languages are spoken, which makes it an important aspect of any business strategy. And for this to work, a successful localization strategy must be in place.

A great example of Ikea's internationalization on a global scale is ensuring that local Saudi users have access to the Arabic version of the website. As an e-commerce company, Ikea knows best the importance of websites.

Average viewers from all regions need to have easy access to online shopping. Ikea's local developers and marketers work hard to make this possible: It is critical that the user interface is translated correctly and displayed without errors.

In Western cultures, people read from left to right, but in Arabic, they read from right to left. This presents a challenge. Just take alook at the Arabic version of the Ikea website.

Example 2: Popular Marketplace Platforms

If you are looking for other well-known globalized companies, think Amazon, eBay, Etsy, and AliExpress.

The marketplaces and the e-commerce platforms mentioned above offer products from different countries worldwide.

Customers can choose the best deals based on proximity to their home, quality of products, or price - to name a few filter options. Each filter has to be modified carefully for users of all regions.

Adapting a particular product in terms of preparing the user interface and apps to work correctly in many languages is not a piece of cake. Producing software that can exist between the translations and cultural preferences requires much preparation before the translations can start.

Example 3: Netflix

Netflix, a video content provider, is another perfect example.

The streaming app for smartphones, desktops, and TVs is available internationally as a content service. However, content selection depends on the user's location.

Suppose an American traveling through Europe or Asia does not see an option to play their favorite show. In that case, it's usually because of licensing and copyright agreements in regional markets. And, of course, the other way around.

Asian or European users may not see the same selection in the US as in their own countries. When you visit different destinations, you notice that local options are often advertised.

At the same time, the company has to ensure users from different national markets experience the same high-quality service. The app UI has to be displayed correctly. The desktop interface cannot crash or display and decode special characters incorrectly. The smartTV apps have to work perfectly with most locally used devices.

Related content: How Much Does Software Localization Cost?

How do Globalization and Internationalization Affect Business?

The Challenges of Globalization and Internationalization

Globalization and internationalization present different challenges. Let's take a look at the short list of some notable examples that can arise when a company decides to go global:

• Determining if the country(ies) to expand into is worth the investment.
• Ensuring that the company understands the local market and business culture well.
• Budget and staffing challenges: Do we need more money and staff to complete the process?
• Lack of know-how to implement globalization and internationalization concepts when expanding the offering.
• Customer support in different languages, as customers will expect this due to the localized website, communication, and content.
• Legal issues may arise regarding patents and copyrights, which must be carefully managed if a company plans to market its products internationally.

What Are the Benefits of Globalization and Internationalization?

Globalization means making a product or service available to a larger market. This can be done by manufacturing in foreign countries and selling products worldwide (which benefits the global economy). However, to ensure that the items meets local tastes and preferences, they must be localized before being sold.

Localizing and internationalizing allow a company to ensure that its product appeals to local consumers and meets their needs and wants. This helps the company increase its market share and make more money but also helps ensure that customers are more satisfied with the product.

The brand can achieve higher awareness around the world or in specific markets. By offering different products and services for different markets, companies can reach more customers and better tailor their offerings to customers' needs.

Internationalization can help companies reduce customer churn and increase customer loyalty by providing a consistent and reliable experience across multiple platforms and markets. It also enables companies to reach new customers and increase sales by offering services tailored to the local market's needs.

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The benefits of internationalization in localization go beyond streamlining business operations; they can help companies stay competitive in an ever-evolving market.

Thanks to globalization and internationalization, companies can expand their customer base and eliminate geographical and language barriers.

When it comes to the workforce, companies that embrace globalization can draw on a broader range of resources and talent, improving their productivity, agility, and competitiveness. In the long run, this alone lowers the cost of doing business.

Internationalization can also help companies stay relevant in today's dynamic international marketplace by keeping up with the latest trends and best practices. Customers are happy to have a company near them and are more likely to buy from them. Overall, internationalization is essential for companies that want to remain competitive in today's global economy.

Key Differences Between Globalization and Internationalization

There are crucial differences between them. Globalization means expanding a company's economic activities and influence beyond its borders. This includes trade, investment, and cooperation between nations/companies. Globalization, since its beginnings, has always supported free trade, and the business world could not be more grateful for this possibility.

On the other hand, internationalization means making a company or product available in multiple languages and cultures so that they are not crashing or causing any problems. This includes making products available online, in different markets, through various channels (applications, websites, social media), and in brick-and-mortar stores.

Let's use another example of a well-known brand: McDonald's.

The famous American restaurant serving beef burgers is in over 100 countries. People around the globe are familiar with the Ronald McDonald clown, the standardized identical yellow fries, Happy Meals, and the drive-through.

Much like the example of Ikea mentioned a few paragraphs above, Macdonald's has become a symbol of a truly globalized brand.

What are the examples of internalization in McDonald's business model?

You may already know this because it was featured in one of pop culture's iconic films, Pulp Fiction, by Quentin Tarantino. Remember the famous scene in the car where Vincent brags about his trip to Europe and eating McDonald's burgers?

The American classic Quarter Pounder with Cheese is known in Europe as Royal With Cheese because of the metric system. Europeans would only know what a quarter pounder of beef is as kilograms and grams are the standard weight measures. In contrast, Royal is a better word description. It brings to mind the delicate ingredients used in McDonald's chain burgers and their high quality.

Similarly, the protagonist describes his experience with French fries in Belgium. The fries are served with mayonnaise, not ketchup, a traditional local preference. Moreover, Belgian fries are internationally known for their great taste.

Let us take a closer look at McDonald's localized menu, another excellent example of the company's internationalization.

All over the world, famous burgers contain beef as the main meat ingredient. But what about India? The chain is present in the Indian market but does not serve beef. For religious reasons, cows are sacred animals in India. The Indian menu at McDonald's is tailored to local taste buds, with many vegetarian options, paneer cheese, and a more spicy menu.

Which is Better for Your Company: Globalization or Internationalization?

The simple answer that no one really likes: it depends on your situation and your business needs. Below are some examples of approaching the topic that may help you decide which path to take.

Consider globalization if you:

• Plan to expand business activities to another market abroad
• If you want to attract new product suppliers and production plants in a specific region of the world (it is essential how you approach your prospects in different regions)
• If you are looking for local labor, local laws may require a business entity registered in a particular market
• When the local audience wants to buy only local products and the label "Made in ..." makes a difference for them
• If you see a clear benefit in globalization and have calculated that the benefits outweigh the costs: positive ROI

Consider internationalization if:

• Users in a particular language visit your website or webshop, e.g., if, since the beginning of the war in Ukraine, a large number of Ukrainians have used your services and you need a way to address new customers in an already existing market.
• Your existing website and its content need to be tailored to different language users from the same country, e.g., if you need German, French, Italian, and Romansh in Switzerland, but also English for tourists or English-speaking emigrants.
• You are already established in different markets but need to gain the trust of the local audience to increase the conversion rate. Consider whether English date selection in the UK can solve some of the problems with missed dates or hotel booking confusion (since date selection in the UK starts on Monday, in the US, it begins on Sunday).

Long Story Short

Globalization and internationalization are closely related, and both are essential to a company's success in today's business world open for international markets.

While globalization focuses on the international aspect of business and its expansion, internationalization encompasses the local factors that enable companies to thrive and serve customers in the best possible way.

Both involve adapting to a variety of cultures and business practices. Still, there are differences between the two that we highlighted above. The next time you discuss globalization and internationalization with someone, we hope this article helps you better understand the basics.

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