Some researchers insisted that adaptation strategies are more effective than standardization because consumer’s needs vary across cultures (Calantone et al., 2006). Their study focuses on the cultures in business dealing and they pointed out three factors which can impact the international adaptation strategy. They are the market similarity, organizational structure and the industrial adaptation. The market similarity between the domestic market and the foreign market is a significant factor in choosing the export market variables. The openness of firm and industry adaptation affects the product adaptation strategy, where this can exert a positive effect on export performance of structure and strong product adaptation (Calantone et al., 2006). Moreover, Horska et al. (2007) presented that the adaptation strategy which can adjust the physical characteristics or qualities of the product and its packaging to meet the demands of different sectors and country, may increase the cost in development, manufacturing, packaging and distribution. Customers develop a sense of belongingness to a global culture by using practices, styles and information that are part of the global culture. Consequently, they create the global identity, but they still hold their local status on the basis of their specialization to the local culture (Horska et al., 2007). It shows that indigenous culture is a significant issue for people in their social network.
In addition, Zaiem and Zghidi (2011) stated that adaptation strategy of product is the core strategy which can influence the export performances. They reflected that factors favouring standardization and adaptation strategies are different. The type of product, marketing research and development, and similarities of foreign market consumer behaviours contribute a lot to product standardization. However, the type of product, the variation of consumer’s purchasing power, the norms and standards set by the foreign market, and the cultural differences such as language and religion are the factors that are in favour of an adaptive strategy. Furthermore, they also stated that the product adaptation strategy is also influenced by the internal and external characteristics of a company (Zaiem and Zghidi, 2011). The internal characteristics include the size of the company, the experience in an international level and the type of product they have. The external characteristic is the industry that the firm is involved. These factors will influence whether the firm should adapt or standardize their products and further influence the export performance. Moreover, in order to improve the export performance, product adaptability could complement and strengthen organizational strategy (McKee and Konell, 1993). In order to survive, companies have to prepare for changes in the continuously changing environment (McKee and Konell, 1993). Therefore, planning for adaptation becomes a survival skill in the globalized market. McKee and Konell (1993) also suggested that a change in consumer preferences will eliminate or reduce the product demand, rendering the firm’s efficiency-based strategy ineffective. It showed how the accelerating of changes in business environments has created innovative survival requirements in terms of product offerings.
From the above, it can be seen that it is necessary to adopt product adaptation strategies if a multinational corporation can gain profits in the global market. A firm always has to adjust its product strategy to meet local needs and wants. The motives for adaptation strategy become obvious that culture may have a role to play in adapting products. Therefore, the next section will look at the effect of culture on product strategies.