Transnational Strategy (2024)

FAQs

What is the transnational strategy? ›

A transnational strategy is a strategy where a business retains centralized operations in 1 country while expanding internationally by acquiring new operations and assets abroad. This strategy attempts to balance high levels of global integration, brand recognition, and scalability with high local responsiveness.

A transnational strategy provides Costco with the perfect balance and has represented a smart approach to continued growth into a global brand. In each country, Costco offers different products that reflect local tastes and preferences.

Although effective in many areas of business operations, a transnational strategy may have some disadvantages: It may reduce companies' strategic autonomy. It could alienate local customers, which may lead to increased costs. It can be difficult for the business to manage offices and employees in all its locations.

An example of a transnational strategy is KFC. With numerous locations globally, the franchise is known for its transnational marketing strategy that caters directly to the different market's local preferences and tastes.

Transactional marketing is a marketing strategy that focuses more on a one–time sales transaction instead of focusing on retaining the customer for the future. They are not trying to build a connection with the customer as they would in relationship–based marketing.

A transnational strategy is a business plan that aims to coordinate global activities and operations across international borders. Oftentimes, this strategy invests in international operations and assets, connecting global customers to its brand in every operating region and market.

Samsung, the Korean electronics company, now operates in 74 countries. With a global design for their phones and computers, they adapt each product to local markets.

One of the key elements of Costco's marketing strategy is its unique pricing approach. Costco offers its products at low prices, often lower than its competitors. This attracts price-conscious customers who are always on the lookout for the best deals.

A transnational strategy offers a best-of-both-worlds approach to global expansion. It can give companies a competitive edge by combining the significant cost and efficiency benefits of global standardization with the power of local customization to win over and retain customers.

Is transnational strategy expensive? ›

The transnational model can be more efficient in terms of lowering average costs, especially compared to a multi-domestic company. This is because it has few product variations, allowing the company to focus on a few variants and save costs through significant economies of scale and standardisation.

Lastly, the report advises Coca-Cola to adopt a transnational strategy that focuses on both global integration and local responsiveness, optimizing market opportunities while catering to specific market needs.

Ultimately, Nestle is able to strike a balance between local responsiveness and global integration thanks to the transnational strategy it has adopted. Nestle is able to offer products and services that are catered to local needs by harnessing the knowledge and resources of both global and local teams.

Some examples of TNCs include Apple, McDonald's, Coca-Cola, Nike, and Amazon. They all operate in multiple countries around the world.

Activities of political transnationalism can range from immigrants remaining active in the politics of their native country, including voting, to actually running for office. A modern example is the growing number of native-born American citizens who choose to live in Mexico for family, business, or economic reasons.

Apple's supply chain is a critical component of its globalization strategy. The company sources components from multiple countries, including China, the U.S., Japan, and several European countries. This not only helps reduce costs through competitive sourcing but also mitigates risk by diversifying the supply base.