January 24, 2008

Globalization, Localization, and Enterprise Architecture

The world economy is globalizing, but sales and marketing is still a local activity.

How should organizations architect the way forward to address the duality of globalization and localization?

The Wall Street Journal, 23 January 2008, reports that “Disney Localizes Mickey to Boost Hong Kong Theme Park.”

Disney has gone global and extended their famed theme parks to Asia. However, the first couple of years have not been a success. “Since it opened in 2005, Disney’s Hong Kong park, the media and entertainment company’s flagship for the booming Chinese kid’s market has struggled to connect with consumers. The park a joint venture with the Hong Kong government, missed public targets of 5.6 million visitors for its first year of operation, and attendance dropped nearly 30% in the second year to about four million.”

Where did Disney go wrong in going global?

Disney did not localize their brand or product to their foreign consumers. Instead, they expected the global consumer to behave the same as their U.S. counterpart with no differentiation for culture, nationality, beliefs, values, and so on. “In the past, it was the Chinese consumer who was expected to understand Disney, or so it seemed. Chinese tourists unfamiliar with Disney’s traditional stories were sometimes left bewildered by the Hong Kong park’s attractions.”

Disney also did not tailor their marketing to the local Chinese consumer, in a big snafu. “Disney’s marketing efforts also have misfired. A Hong Kong Disneyland ad in the summer of 2006 featured a family of consisting of two kids and two parents. China’s government, however, limits most couples to just one child.” Ouch!

So how is Disney changing their Mickey Mouse tune?

“Now, Disney is going on the offensive by going local. Its first big opportunity on the front is a stroke of astrological fortune. In the traditional Chinese calendar, it will soon be the year of the rat. As the Feb. 7 New Year holiday approaches, Disney is suiting up its own house rodents, Mickey and Minnie, in special red Chinese New Year outfits for its self-proclaimed Year of the Mouse.” This sounds good, though I’m just not sure Mickey and Minnie mouse appreciate being equated to rats, as in year of the rat.

Disney is also changing their park exhibitions to address local tastes. “Inside the parks, vendors hawk fried dumplings and turnip cakes. The parade down Main Street, U.S.A., is being joined by “Rhythm of Life Procession,” featuring a dragon dance and puppets of birds, flowers, and fish set to traditional Chinese music…” This also seems good and local, except shouldn’t this be Main Street, Hong Kong or China and not U.S.A.?

Anyway, according to Disney, they are going local all the way to their brand. “We are working as the ‘Chinese’ Walt Disney Company—ensuring that all the people who work in Disney understand the Chinese consumer to forge a deeper emotional connection with the brand.”

From the perspective of User-centric enterprise architecture, we need to focuses on the end-user and stakeholders. Going global and ignoring localized culture, nationality, beliefs, and values may be a cost conscious approach, but a poor architecture one. EA must respect individual, national, and cultural differences, and promote trust, respect, and integrity in doing so. A unified, consistent brand is good, but outreach to consumers based on their localized needs and requirements is absolute. Whether we are dealing with product, process, marketing, brand, or technology, EA must on one hand develop standards and seek out enterprise solutions where possible, but on the other hand, must tailor the enterprise’s offering to local tastes and requirements. It’s not always a one size fits all.


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