A Shrinking Budget? Why Translation Shouldn’t Be the First Thing to Go

Times are tough for many international businesses. The International Monetary Fund’s World Economic Outlook expects global growth to fall from 3.4% in 2022 to 2.8% in 2023. This means that many companies will be trimming their budgets as consumers spend less. However, it can make sense for international companies to pursue translation initiatives despite budget scarcity. Here’s why.

Taking Advantage of the Globalized Business Landscape

The globalized business landscape can support greater competition, increased productivity, and lower prices, while encouraging the sharing of technologies across international borders. Tapping into the global business environment, though, is not without cost.

Globalized businesses need to:

• Ensure legal and regulatory compliance in each country they operate in

• Deal with the practicalities of setting up offices, factories, warehouses, and other facilities abroad

• Recruit and manage international teams

• Deal with global supply chain and logistics management

• Navigate trade agreements and tariffs

• Understand export regulations

• Account for cross-cultural differences

Some if not all of these may be applicable to any given business. One thing is for sure; all of this takes time and costs money. However, the benefits can more than cover the costs. Globalized businesses have the potential to lower their production costs while accessing far larger audiences with their goods and services. Translation and localization play a fundamental role in this.

Understanding the Role of Translation and Localization in International Business

At a headline level, translation and localization enable the smooth operation of international business models. They can support businesses to open new facilities and staff them, to develop partnerships that lower their costs and open up new markets, to market their wares, and to ensure everything is done in a compliant and culturally aware manner. 

Translation and localization support both internal and external business functions, as we will explore in greater detail below. 

International Market Size Unlocked by Translation and Localization

Before we dive into the practical application of translation and localization in an international business setting, let’s consider the context. A business that operates in multiple countries has the potential to tap into multiple markets. This can significantly ramp up its access to consumer spending power. If the company has also lowered its production costs through globalization, there is plenty of potential for a better bottom line. 

Expanding sales across international borders means serving consumers in their native languages. CSA Research surveyed 8,709 consumers in 29 countries and found that 76% of people prefer to purchase products with information in their own language, while 73% demand product reviews in their native tongue, if nothing else. Furthermore, the study found that businesses that fail to localize the buying experience were risking losing 40% or more of the total addressable market. 

Many businesses that have embraced marketing translation have found out for themselves how important it is to take a strategic, well-considered approach to doing business internationally. A solid global marketing strategy that addresses production, logistics, product adaptability, country-specific restrictions, and financial considerations, as well as language needs, can lay the foundation for international success. 

McDonald’s is an excellent example of a company with just such a strategy. The company was founded in California in 1940, though it wasn’t until 1948 that the McDonald brothers focused on the hamburger-based fast-food model that has become such a global success. 

In 1967, McDonald’s opened its first international restaurants, in Canada and Puerto Rico. Since then, the company has embraced translation and localization to expand to 36,000 restaurants in more than 100 nations. In 1948, the McDonald brothers were selling hamburgers for 15 cents apiece. At the time of writing, the business has a market capitalization of USD 208.84 billion.

The Importance of Effective Communication in International Business

Whether for internal functions or external operations, businesses need to communicate clearly and effectively, no matter which languages they are using. 

The Role of Communication in Internal Business Operations 

For international businesses, internal communications may need to span a wide range of languages to facilitate smooth operations. Some areas that multilingual internal communications can aid include:

• Instruction – ensuring teams have the knowledge they need to carry out their duties competently and safely, including the use of Kanban systems, shared calendars, shared drives, and so forth

• Work culture – creating an environment within the company that diverse teams can feel connected to, while also respecting local cultural considerations

• Legal compliance – enabling an understanding of local laws and regulations, including what needs to be done to comply with them

• Regulatory compliance – understanding local regulators’ requirements clearly and putting processes in place to meet them

• Staff recruitment and management – appealing to the right talent in the right locations, then welcoming new team members on board and bringing them up to speed with corporate policies and procedures

• Focus – ensuring all staff are aware of corporate goals and of any company-wide issues, such as the need to do business more sustainably

Managing all of this well in a single language can be challenging at times. Doing so in multiple languages is even more so – hence the need for reliable language solutions, even when budgets are tight. 

The Role of Communication in External Business Operations 

Translation and localization are just as important to international businesses when it comes to external operations. Some of the key areas that they support include:

• Creating routes to market – whether businesses take a direct approach, conquer new markets online, form partnerships and joint ventures, undertake mergers and acquisitions, or approach their new markets in any other way, translation is essential for a smooth journey

• Achieving greater supply chain clarity and resilience – after the disruption of the COVID-19 pandemic, 55% of supply chain managers in a Gartner survey expect to have a highly resilient supply chain in the next two to three years

• Advertising and marketing – effective communication underpins everything from pay-per-click campaigns to webinars to in-person events to TV advertising and everything in between, while multilingual international SEO can support efforts to drive online traffic

• Enabling growth – everything from user manuals to documentation designed to enable the self-discovery and adoption of software-as-a-service products can help businesses to grow internationally

• Delighting customers – multilingual customer service has rapidly become something customers expect as standard, rather than a nice-to-have 

In each of these areas, translation and localization services have the potential to enable businesses to operate more efficiently, more cost-effectively, and in a way that positively impacts both the business and its customers.  

Translation and Localization Success Stories 

The example we used above – McDonald’s – shows the power of using language solutions to expand abroad. McDonald’s is, of course, far from the only brand that has achieved international success using translation and localization. Many companies have used marketing translation to capture consumers’ interest as they roll out their products in new territories, as well as relying on translation services for a wide range of other communications (including many of the examples outlined above). 

Coca-Cola is another oft-cited example of a company that has used language solutions to spread its brand around the globe. The company’s ambitious expansion strategy has seen it expand across the world – Coca-Cola is now sold everywhere other than Cuba, North Korea, and Russia. 

The Coca-Cola company has 900 bottling and manufacturing facilities located around the world, many of them located in North America, Asia, and Africa. With workers speaking a multitude of languages, the company relies on translations to deliver a range of internal and external functions that ensure standardization in its manufacturing, distribution, and sales processes. 

In the cases of both Coca-Cola and McDonald’s, success has been driven by a range of factors. One is a strategy of offering certain core products that are for sale across all territories, while others are delivered regionally, in line with local tastes. Another is the establishment of local facilities and the building of local staff teams, employing an overarching company ethos while accounting for local cultural considerations by emphasizing the value of linguistic and cultural diversity in business. The use of first-class translation and localization services is, naturally, also a key contributor to the brands’ success. 

Clearly, both these cases of international expansion cost the companies money. They had to set up new facilities, recruit staff, translate their brand materials, market their products, and so on. Yet the expense was evidently worth it; the return on investment was enough that both McDonald’s and Coca-Cola continued with their international expansion strategies, not just for years but for decades. 

The same is true with any number of international brands, from Starbucks to Apple. Yes, it costs money to turn a local business into an international venture. But with the right strategy and the right translation and localization partner, the return on investment can ensure the expenditure is worthwhile.

Time to Go Global

International success is anchored in the use of translation and localization services for effective communication, both internally and externally. Are you ready to make your shrinking budget stretch further and take your brand to new international audiences? If so, Tomedes’ globalization consulting services can help. Contact us today for support with your strategic planning and the development of a bespoke, multilingual, international business solution designed around your global goals.