Transnational Strategy

What is Transnational Strategy?

The transnational strategy is a combination of the global strategy, the multinational strategy and the international strategy. Each of the above mentioned strategies allow organizations to conduct businesses at offshore locations and have unique features such as –

Global:

1. Strong central control
2. Economies of scale through global manufacturing
3. Standardisation

International:

1. Central coordination
2. Local decisions taken by local subsidiaries
3. Allocations of resources done by parent company

Multinational:

1. The control of the region is with the subsidiary
2. Loose central control

The transnational strategy combines the above mentioned strategies to in order to facilitate a firm’s global business activities through coordination, cooperation and interdependence. The transnational strategy relies on the coordination of the centre, the operation units and the local subsidiaries for efficient and effective reach. The transnational strategy captures the benefits of central coordination of the global strategy along with the local responsiveness of the multinational and international strategy.

Example: HUL and HCCB are subsidiaries of their parent companies which follow a transnational strategy. The operations are locally controlled but centrally coordinated and interdependence among other subsidiaries is also present.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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