According to marketing professor Niraj Dawar of Canada's University of Western Ontario, the Dutch electronics manufacturer Philips has achieved precisely this sort of worldwide local acceptance. The company, which began as a manufacturer of incandescent lamps and other electrical products in 1891, had by the 1920s established companies in the US, France and Belgium. "Today," says Dawar, "[Philips] is not just a Dutch brand that has gone international, but it is in fact a local brand. People will tell you this in Austria, Australia, India and Canada—there are a number of places around the world where Philips has gone very local."

But not all multilocal companies trace their beginnings to the nineteenth century. One modern American brand that has achieved widespread local acceptance overseas is McDonald's. The American fast food chain has become such a routine part of the landscape in parts of Asia, for example, that kids may not even be aware of the company's foreign origins. In the book "Golden Arches East," Emiko Ohnuki-Tierney relates a story of Japanese Boy Scouts who were surprised, when traveling abroad, to encounter a McDonald's in Chicago (edited by James L. Watson, Stanford, 1997).

McDonald's began expanding internationally in 1967, twelve years after it began franchising in the US. By 1996, the restaurant chain was operating restaurants in more than 25 foreign countries. In contrast to Singer and Philips, however, McDonald's became multi-local in the absence of trade barriers and at a time when global communications were practically instantaneous; nor have McDonald's overseas restaurants operated independently of the home office.

Although the restaurant chain has made numerous efforts to localize its menu (it offers, for example, salads in the US, lamb burgers in India, vegetarian burgers in the Netherlands, teriyaki burgers in Japan, salmon sandwiches in Norway, frankfurters in Germany, and poached egg burgers in Uruguay), it did not gain local acceptance worldwide by marketing local specialties.

As Harvard's James L. Watson argues in Golden Arches East: McDonald's in East Asia, the secret to the restaurant's global popularity has almost certainly been its French fries, which he writes are "consumed with great gusto by Muslims, Jews, Christians, Buddhists, Hindus, vegetarians, communists, Tories, marathoners, and armchair athletes." McDonald's fries have resonated with local tastes in dozens of countries—a fact that is not surprising when one considers that potatoes, consumed by over a billion people around the world, are one of the most recognized foods on earth.

But there's even more to the potato story. According to the University of Western Ontario's Dawar, McCain Foods of Canada is the largest international supplier of French fries to McDonald's. Meanwhile McCain, which markets frozen potato specialties in 100 countries, has itself achieved multi-local acceptance in many of the countries where it does business. The company localizes its product by calling it chips in the UK for instance and developing local advertising for markets and managers by region.

Says Dawar, "In Australia, people think of McCain as an Australian company. In England, people think of McCain as an English company. In Canada, people think of McCain as a Canadian company... McCain is a very local brand in each of the markets in which it operates." A spokesperson for McCain affirmed this view in an email correspondence.

So what, if anything, do French fries have in common with sewing machines and electric lights? Probably quite a lot. When professor Theodore Levitt of Harvard University published his highly influential essay "The Globalization of Markets" in The Harvard Business Review in 1983, he argued that to be successful, modern global companies would have to focus on products that address universal consumer needs or preferences. Levitt specifically cited McDonald's as an example of such a company.

Levitt also pointed out that people everywhere look for ways to alleviate their burdens, acquire more free time, and increase their spending power. There can be no argument that McDonald's success largely rests upon its ability to provide standardized fare at low prices to busy consumers anxious to save time. Same for McCain's frozen potato offerings. In that sense, the two firms' formulas for multi-local acceptance may not be so very different from the path to success taken by Philips and Singer more than a century ago, when they began offering their customers time-saving conveniences at affordable prices.    

[2-May-2005]