Building a Multidomestic Strategy with Examples

How do you succeed in the fast paced business world and position yourself for success?

An approach you can use is a multidomestic strategy.

Just as the name implies the multidomestic strategy means tailoring products, services and operations to the specific needs of international markets.

Pro tip: Supercharge your multidomestic strategy with Centus – a professional localization management suite. Learn more.

What is a multidomestic strategy?

Under a multidomestic strategy, the parent company allows subsidiaries in each country to adjust to the needs and preferences of local markets. The subsidiaries have a large degree of freedom to tailor their marketing campaigns, operations, and even products.

Unlike a one-size-fits-all strategy that focuses on uniformity, a multi domestic strategy recognizes the inherent differences and nuances found across different foreign markets and cultures.

Benefits of a multidomestic strategy

Being a multidomestic goes beyond being a global company. It means being a global symphony where you harmonise different notes to produce a beautiful success story.

Here are the main benefits of a multidomestic strategy:

Adapting to local markets

Source: Pixabay

Imagine a fashion designer releasing a collection that reflects the taste and style of each region they visit. A multidomestic strategy lets you tailor your products and services to the specific preferences and needs of each target market.

It’s like creating bespoke solutions for each market so your product or service is more than just a transaction but an experience that speaks directly to the hearts of your different customers.

Enhanced responsiveness to customer needs

Source: Unsplash

A multidomestic strategy lets you sync your business activities with the changing needs of each market.

This is more than a transactional exchange. It’s a dance of anticipation and delivery that leaves customers amazed by how their needs are met.

Cultural sensitivity and adaptation

Source: Pixabay

Imagine devouring a dish that seamlessly blends flavors from different parts of the world to create a culinary masterpiece.

A multidomestic strategy values and respects the traditions of diverse markets, just as a chef does with each ingredient's origins.

It's like creating a cultural kaleidoscope where your products and services resonate with local values, customs, and traditions, thereby transforming your brand into an authentic and valued guest in every market.

Improved competitive advantage

Source: Pixabay

A multidomestic strategy combines several market advantages to produce a competitive edge, just like an orchestra director combines different instruments to create beautiful music.

Knowing and using the strengths of each market lets you create a set of strategies that makes competitors run for cover.

6 Multidomestic strategy examples

A multidomestic strategy lets businesses adapt to the cultural, economic and social nuances of each region they operate in and become more competitive and customer centric.

Here are the 6 companies that have implemented a multidomestic strategy:

Procter & Gamble (P&G)

Source: P&G

P&G is famous for its multidomestic strategy. They customize their products to the interests and needs of local markets.

For example P&G adjusts the formulation and scent of their laundry detergent to what their customers in different markets want. This allows P&G to manage the differences in consumer behaviour and buying habits and increase market share and customer satisfaction.

Playbox

Source: Playbox

Playbox uses a multidomestic strategy by customising their toy products to the needs of their customers in different regions. When designing and marketing their toys they consider local culture, trends and safety regulations.

For example Playbox may design toys based on local mythology or adapt their products to meet special safety requirements in different markets. This way Playbox connects with children and parents in their target markets and comply with local regulations.

Johnson & Johnson

Source: Johnson & Johnson

Johnson & Johnson uses a multidomestic strategy by customizing their healthcare products for several markets. To meet local preferences and regulations they modify product formula, packaging and marketing messaging.

For example they offer many variants of skincare products to cater to the different skin types in each region. This way Johnson & Johnson can build trust and be relevant in each market.

H&M

Source: H&M

H&M uses a multidomestic strategy by adapting their products, stores and marketing to local tastes. The brand’s clothing lines show fashion trends, the pricing, campaigns and store layout are customized for each market.

H&M can achieve global-local in the fashion industry by working with local influencers, offering customised online experiences and sustainable practices.

Nestle

Source: Nestle

Nestle is a great example of a company that uses a multidomestic strategy. Nestle has a wide range of tastes and product variants to cater to local palates and nutritional requirements.

For example their instant noodles have different flavours in different foreign markets to suit the local cuisine of each region. This way Nestle wins local customers.

Walgreens Boots Alliance

Source: Walgreens

Walgreens Boots Alliance uses a multi domestic approach by customising their products and services to the needs of local healthcare professionals. They offer pharmacy services according to each country’s regulations and healthcare systems.

Additionally they sell region specific over-the-counter drugs and wellness products to appeal to local interests. This way Walgreens remains a trusted and accessible healthcare provider in each market.

Multidomestic vs. global strategy

Multidomestic strategy

As mentioned earlier the multidomestic strategy focuses on customizing products, services and operations to the specificities of each local market. It highlights the importance of adapting to local consumer tastes, cultural subtleties and legal requirements.

Companies that use a multidomestic strategy decentralise, giving their subsidiaries or business units in several regions more autonomy.

This customized approach means products and services are tailored to each region’s needs and builds a stronger relationship with local customers.

Global strategy

A global approach promotes market standards and consistency. It aims to develop products, services and operational processes that are the same across borders.

Companies that use a global approach can benefit from cost savings and streamlined operations by leveraging economies of scale and a centralized decision making structure.

The focus of a global approach is to create products and services that have global appeal with minimal local adaptation.

This way production, distribution and marketing is efficient and can lead to cost savings and faster market entry.

Finding the middle ground

While global and multidomestic are at opposite ends of the spectrum, many companies succeed by using a hybrid or middle ground approach called a “Glocal” approach.

This approach tries to combine the best of both worlds by standardising some parts while allowing for local adaptation where necessary.

This balanced approach acknowledges the need to respond to local conditions while also benefiting from efficiency and consistency.

Finally there are several factors to consider when to go multidomestic or global:

• Industry
• Target markets
• Resources
• Company’s long term goals

How to build a multidomestic strategy in 5 steps

Building a multidomestic is like writing a symphony that resonates with the local notes of each market and gets a global presence and local flavour.

This approach requires planning, orchestration and a pinch of cultural sense. Here are the steps to help you build a multidomestic that captures global markets:

Step 1: Conduct market research

Market research and analysis is the base for understanding the different needs, interests and behaviours of local markets so you can adapt your operations efficiently.

This step gives you the information you need to make informed decisions and build a multidomestic strategy for a specific region.

Here are the steps to conduct thorough market research and analysis:

Target markets

• Which regions will you operate in under the multidomestic strategy.
• When targeting markets consider population demographics, economic indicators and cultural diversity.

Demographic data

• Collect data on population size, age distribution, income, education and other demographic data.
• Use this data to find consumer segments and their attributes.

Competitor analysis

• Who are the main competitors in each market.
• What are their strengths and weaknesses, including market share, pricing strategy and products.
• What are the successful strategies and opportunities that will make you unique.

Consumer behavior

• Research consumer preferences, behaviour and purchasing habits in each market.
• How do customers perceive and interact with products and services.
• What are the special requirements or pain points that your services can solve.

Step 2: Tailor products and services

Modifying products and services to match local market advantages, individual preferences, needs and cultural nuances is one of the key pillars of building a successful multidomestic.

This personalization will not only strengthen your relationship with local customers but also show your brand as a responsive and listening player in the global business. Here’s how to build a multidomestic by adapting products and services:

Customize product

• Create a core product or service that will be the base.
• Design modular components or features that can be adapted to local needs.
• Adapt product specs, features, sizes or formulas to the local market preferences.

Localize branding and packaging

• Adapt branding elements like logos, taglines and colour schemes to local cultural values and aesthetics.
• Use packaging that appeals to local sensibilities and meets local norms and standards.
• Use culturally relevant graphics and symbols to help product recognition and appeal.

Develop pricing strategies

• Create pricing strategies that take into account local economic reality, purchasing power and price sensitivity.
• Offer different pricing tiers or bundles for specific customer segments in each market.
• Consider currency fluctuations, taxes and import/export tariffs.

Establish local sourcing and partnerships

• Work with local suppliers to get raw materials or components and show local roots.
• Partner with local brands, distributors, merchants and e-commerce platforms to ensure distribution and reach.

Step 3: Localize marketing content

Customize your advertising and commercial efforts to each target market’s unique cultural, linguistic and social norms. Here’s how to implement this key part of your strategy:

Adapt marketing content

• Translate all marketing materials into the local language, ads, brochures, websites and social media posts.
• Ensure idioms, comedy and wordplay are culturally relevant and understood.
• When possible use local dialect to engage more with regional audiences.
• Adjust the tone and style of the text to local needs.

Customize product positioning

• Highlight product features and benefits that are relevant to the local market needs and preferences.
• Adjust pricing to local purchasing power and economic reality.

Localize promotions and campaigns

• Run promotions that tie in with local festivals, holidays or cultural events.
• Partner with local influencers or celebrities who have an audience with the target market.

Test localization and analyze feedback

• Conduct focus groups, polls or test campaigns to get feedback from local consumers and make the necessary changes.
• Monitor and measure the performance of your localised marketing and be ready to adjust based on results.

Pro tip: Use Centus to streamline your localization efforts via seamless content translation management, translation cost calculation, cooperation tools, QA tools, automation tools, and much more.

Step 4: Manage local workforce

Talent and workforce management is key to a multidomestic strategy to support the execution of the approach across multiple markets. Here’s what to do:

Recruit and hire local talent

• Set up local recruitment teams or partner with local recruitment agencies to find and attract top talent in each market.
• Customise job descriptions and requirements to each region’s needs and cultural nuances.
• Reach out to potential candidates via local job boards, social media and industry networks.

Conduct cross-cultural training

• Give cross-cultural training to staff who are relocating or working in different global markets to understand and be sensitive to local customs, habits and communication styles.
• Provide language training or support to employees to enable them to communicate effectively with colleagues and customers in their different locations.

Develop global talent

• Implement a global talent development program that exposes high-potential employees from multiple markets to different parts of the business and helps them build a broader skill set.
• Offer mentorship and coaching that crosses regional boundaries and encourages knowledge sharing among staff from different regions.

Use communication and collaboration tools

• Invest in technology and solutions that enable communication and collaboration across countries.
• Use virtual meeting platforms, project management tools and knowledge sharing platforms to bridge the geographical gap and teamwork.

Step 5: Monitor and refine

Once you have a multidomestic strategy in place, you need to regularly review its performance and make the necessary adjustments to get the best results across multiple markets.

This means being aware of market dynamics, customer preferences and competitive landscape across multiple regions. Here’s how to do it:

Conduct regular performance assessments

• Review each local market performance and benchmark against targets.
• Look at key performance indicators like sales growth, market share and customer satisfaction. This will tell you which markets are performing and which need adjustment.

Obtain data-driven insights

• Use data analytics to understand customer behaviour, market trends and future opportunities.
• Make decisions based on data from multiple sources including sales numbers, customer feedback and social media engagement.

Challenges of a multidomestic strategy

A multidomestic strategy has many benefits but, like any strategy, it has its challenges. While these challenges are tough, you can overcome them with proper planning and execution.

Here are the multidomestic challenges and solutions:

Coordination complexity

Imagine an orchestra with musicians from all over the world, each playing a different instrument. While the end result may be beautiful, managing such a diverse group can be tough.

A multidomestic strategy is similar, it requires the coordination of multiple activities across different target markets, from manufacturing and distribution to marketing and customer support.

Solution: Implement modern project management tools and collaboration platforms. These tools can help improve communication, share data, and provide real-time updates.

Balancing global standardization and customization

It can be difficult to maintain a balance between conventional global practices and responding to the specific preferences of local markets.

Solution: Create a core framework that comprises standardized elements. This framework acts as the backbone of your strategy. Then, implement modular components that can be tailored to local tastes.

Cultural and regulatory issues

Cultures and laws differ across borders, just like different languages have different idioms.

Navigating this complexity feels like going into uncharted territory, each market has its own cultural nuances and legal landscape.

Solution: Form local teams or collaborate with native experts who are well-versed in cultural and regulatory nuances.

Their perspectives can help bridge the gap between your international strategy and local reality, thereby ensuring that your approach is compliant and resonates with the target audience.

Resource intensiveness

To supercharge your international growth strategies you need to invest resources across multiple fronts, financial, human or technical.

Resources can be like a hungry beast, stretching your capacity to the limit.

Solution: Instead of spreading your resources thinly across all markets, prioritize your investments. Determine high-potential markets where the multi domestic approach will provide the best return on investment.

Managing brand consistency

Keeping the brand consistent while adapting to new markets can feel like trying to keep a balloon in a storm. Being too far from the brand essence will dilute its impact, being too rigid will stifle resonance with local audiences.

Solution: Develop a collection of key brand principles and consistent aesthetic elements. Then, develop adaptive brand rules that allow for interpretation, allowing local teams to infuse cultural relevance while remaining true to the overall brand identity.