If we break it down, the term "californication" is used to describe the spread and influence of western culture around the world. On the other hand, the term "glocal" refers to the ability of thinking globally and acting locally. What happens when you merge the two? Aside from coming up with a 18-long-word, we come up with a term that tries to capture and define the current state of a semi-globalized marketplace. A marketplace where companies (big and small) struggle to implement innovative global expansion strategies. Contrary to popular belief, the world in which we live in is semi-globalized at best. Administrative, geographic, cultural, and economic distances are still determining factors in the success rate of product or services being offered abroad. The purpose of Glocalifornication is to analyze western companies that are failing to implement a "think-global act-local" approach to their business model. From time to time I'll also cover topics on international marketing and branding.
Having said that, let me start with my first post by talking about 10 global brands that won't be around in 2012.This of course is according to Wall street 24/7. Each year this source comes up with a listing of brands that are going to disappear in the near-term.When I came across this list today, I was very surprised to see Nokia.
Why was I surprised?
Well, I had been reading about Nokias' struggles to keep up with RIM, Apple, and HTC but until today I realized the predicament in which the finnish company had placed itself. Falling market share, lack of a proprietary operating system, the rise of VoIP are mentioned as the causes for Nokia's free fall. Let me touch on the lack of proprietary OS for a moment. Everybody wants to become a leader in the smartphone industry. The race to come up with the fastest, lightest, thinnest smartphone has RIS, Apple and HTC cranking out new phones every other couple of months--or at least that's my impression. So the question becomes, why is Nokia so obsessed with participating in this crazy race when they could be pursuing a high-volume low-cost strategy?
Is it possible that Nokia is missing an opportunity by not catering to the low income segments of emerging markets? In a world where the majority of the world population can't afford a smartphone, why is Nokia entrenched in this battle to develop the latest technology destined to satisfy the needs of a very small percentage of the world population?
Can Nokia learn a thing or two from Tata motors or the $100 laptop project?
According to the UN Telekom agency the demand for mobile phone services will continue to grow in the developing countries.
Nokia. The clock is ticking. It's time to look at your business model and make some changes.
Glocalifornication style.
Glocalization is essential in a semi-globalized world. But the word "glocalifornication" needs some clarification. Some people may even consider it to be a vulgar term ("fornication").
ReplyDeleteYour focus on issues like the brands that won't be around in 2012 is intriguing.Glocalization is putting tremendous pressures on a lot of established brands to do better - or get vanquished quickly.
Coming back to Nokia. Actually, Nokia is doing quite well in emerging markets because they have developed an innovative business model to deliver really affordable handsets and pre-paid services for the folks in the very low-income segments.
It is having its biggest challenges in the developed countries - because its business model no longer delivers the sophisticated smartphones that consumers in these markets demand.
In all probability, Nokia might disappear entirely from the rich countries by 2012. But if it continues to play its cards well, it might continue to flourish in poor countries.
Great post Jaime. Nokia's obviously an interesting company right now. While it is doing quite well with it's low price handsets, traditionally the company was known as the innovating powerhouse for high end phones as well- an edge it's struggling to keep. Switching wholesale from one strategy to another is difficult, especially for a company of Nokia's size, history and with significant cultural inertia. You do raise a good point though, maybe the company's salvage lies in going after this ignored market, and innovating from the bottom up.
ReplyDeleteAlso, did you mean RIM? just a quick fix
I would also recommend another post explaining the difference between glocal and glocalifornication in more detail. I think you're on to something here, just needs a little more clarity and explanation
A very good read Jamie, to give Tata Motors the credit for success of $3000 car is probably a little too early. Interestingly the Tata Nano car which started with a bang hasn't been a runaway success as expected. Indian consumers aren't exactly lining up to buy. For that we probably have to look at the psyche of the consumers in the local market.
ReplyDeletehttp://www.siliconindia.com/shownews/Salary_increase_for_2010_in_India_is_the_highest_in_Asia_Pacific-nid-65903.html
The expected consumers are lower middle class, or Aspiring Indians, who are experiencing a staggering 10% annual hike in wages. And to add to the complexity the fully loaded model from Nano is $500 shy of its nearest competition, gas prices are above $6 per gallon and inflation is at its peak near 10% annually. This probably means not much or retained earnings for the "Aspiring Indian".
Nokia on the other hand is focused on bringing in more value for the same or a little more price. Which I think should work for most of the emerging economies.