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Transnational Strategy Benefits & Examples

Jacob Meiners, Beth Hendricks
  • Author
    Jacob Meiners

    Jacob Mainers has taught university humanities for over three years. They have a master’s degree in history from Princeton University.

  • Instructor
    Beth Hendricks

    Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Learn the definition of transnational strategy and understand its different methods. Discover the various benefits of transnational strategy with examples. Updated: 06/14/2022

Table of Contents


What Is Transnational Strategy?

Expanding a business across international borders can seem like a challenging task. But the key to stable growth for a business operating locally and globally is incorporating a transnational strategy. A transnational business is a business that runs in a local country and has additional business operations overseas. The transnational strategy definition refers to a plan of action in which a company decides to manage its operations across global borders. The basic concept incorporated into transnational strategy occurs when a business considers the societal and cultural differences in every market area it expands to and markets the business according to every market group. When a business strives to appeal to the desires and cultural differences of the new market, a business can make marketing strategies and products that make sense and are allowed by the specified audience, creating more brand loyalty and sales.

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International Strategy Methods

A multinational corporation defines a business that runs in more than one country. An excellent example of a multinational corporation is Walmart. Most people view Walmart as an American retailer, but many don't know that a massive income of Walmart's revenue comes from outside the USA. Walmart owns a remarkable number of stores in Brazil, Argentina, and Mexico, to name a few. To ensure that all global stores run efficiently, Walmart must use an international strategy. The four key international strategies that businesses with international operations use are:

  • Global Strategy: Coca-Cola Company is an international company that focuses on standardization in terms of color, taste, and package in all the countries it operates. Coca-Cola Company is an example of a company that uses a global strategy to sell its product. So, what is global strategy? The global strategy operates on the assumption that the world is interconnected, and the pattern of consumption and production is relatively similar. Another global strategy example is Nike.
  • Multidomestic Strategy: A business that uses a multidomestic strategy emphasizes the response of local requirements instead of cost in every market it operates in. Netflix is an example of a company that uses a multidomestic strategy. Instead of forcing all viewers around the globe to view American-made shows, it customizes the programming shown on its channels to meet the local preferences within numerous countries such as India, Portugal, Pakistan, and New Zealand.
  • Transnational Strategy: Sometimes, businesses may try to find a balance between the need to reduce the costs and the need to meet the local preferences. Such a strategy is referred to as a transnational strategy. This strategy seeks to find a middle ground between global and multi-domestic strategies. McDonald's and Kentucky Fried Chicken (KFC) are examples of companies that depend on this strategy. For example, in Saudi Arabia, the McDonald's breakfast menu does not include pork products like bacon, ham, and sausages.
  • International Strategy: The businesses that use international strategy are not concerned about the cost or the need to adapt to the local cultural conditions. These businesses attempt to make sales internationally with little to no change. An example of a business that pursues this strategy is the Rolex watches. Rolex does not need to lower its price or adapt the watch to the local standards of each market. Individuals in other countries purchase this product because it differs from the local watches.

International and global strategies can sometimes be used interchangeably, but the two strategies have different meanings. The companies that adopt international strategy act independently and run their operations as if they are local companies with minimum to zero coordination from the parent company. On the other hand, the global strategy consists of a carefully made single strategy used for all businesses operating locally and internationally. This strategy requires coordination from the parent company.

Transnational Strategy Use

The tactics used in transnational strategy involve taking into account the different people with different society's norms and favorites. Companies are able to manufacture products that are relevant and appealing to a particular audience. This explains why one flavor might not work in one country but fits perfectly in another. Businesses adopting this strategy should understand the target audience and adopt marketing appeals that suit their different needs, wants, dislikes, and likes. After the companies understand this, they can customize the products and marketing materials to meet the required cultural differences.

Benefits of Transnational Strategy

One of the key goals for businesses is the opportunity to experience an expansion that makes them enjoy more profits, have a presence in various counties around the globe, and maximize brand recognition. However, what makes transnational strategies beneficial is the ability to keep both local and foreign markets happy. This strategy gives the best of both:

  • High local responsiveness
  • High global integration

High Local Responsiveness

A business can differentiate its brand from other competitive brands by combining high local responsiveness and the power of economies of scale. Highly locally responsive businesses describe businesses that go the extra mile to adapt their products and services to particular local needs. This can consist of hiring field marketers or local country managers, changing the product's color or packaging, or localizing the sales and marketing strategies. Some of the benefits of optimizing a business for high local responsiveness include:

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Frequently Asked Questions

What is an example of a transnational strategy?

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.

What is the importance of transnational strategy?

One fundamental importance of transnational strategy is the ability of a business to enter a local market quickly and effectively. This is because the strategy works by interacting with and understanding different cultures, hence enabling the business to make products that meet the target market's preferences.

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