Standardization of products gives the potential for economies of scale. However, global standardization is not possible for many products as they need to be adapted to cater for local market conditions and in particular for that country’s cultural distinction. Where product adaptation is necessary the attraction of centralized production diminishes as the downtime required to change machinery over from one product to another can be outweighed the benefit of establishing dedicated manufacturing facilities in the target market. The company which applies a standardization policy to its product offers a unique version of a product (the product sold in the domestic market) in all of its foreign markets. In its profitability study (which depends jointly on costs and sales) the company which opts for standardization of the supply will prefer a strategy of cost minimization. Standardizing a product can be can be done for many of its components: for example, on the level of product design or its packaging (ex: multilingual packaging).

Adapting a product for foreign markets consists of offering a product to targeted foreign consumers altered to specific tastes, preferences and needs. The extreme position of adaptation would consist of altering the product until it is completely new. Adaptation can logically concern all the characteristics of the product (central physical product, name and denomination, design, packaging and labelling, brand, additional services, positioning ...). Adapting a product signifies that the company is opting for maximizing sales and not minimizing costs in its search for profitability!