A transnational strategy is a global business approach that integrates the benefits of both multidomestic and global strategies. It involves operating in multiple countries while still being responsive to local market needs and preferences. Several factors can favour the adoption of a transnational strategy by a company, including:
Global Customers: When a company has global customers, it makes sense to adopt a transnational strategy to serve them effectively. Companies like Apple, Google, and Amazon have customers in every corner of the world, so they need to tailor their products and services to meet local needs.
Resource Availability: Companies may adopt a transnational strategy if they have access to resources that are scarce in one country but abundant in another. For example, a company that needs a particular type of raw material may set up operations in a country where it is readily available.
Cost Savings: Transnational companies can leverage their global presence to achieve cost savings in many ways, such as through economies of scale, shared services, and the ability to move operations to countries with lower labour costs.
Government Regulations: Some companies may adopt a transnational strategy to comply with different regulations in different countries. For example, pharmaceutical companies must comply with different regulatory frameworks in different countries, so a transnational strategy can help them navigate this complexity.
Competitive Advantage: Adopting a transnational strategy can help companies achieve a competitive advantage by being responsive to local market needs while also benefitting from global economies of scale and shared resources.
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