Published by MBA Skool Team, Last Updated: January 22, 2018
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 –
Strong central control
Economies of scale through global manufacturing
Local decisions taken by local subsidiaries
Allocations of resources done by parent company
The control of the region is with the subsidiary
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.
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