Monday, January 14, 2013

Define and Explain Transnational Business Startegy

Business Dictionary defines TRANSNATIONAL STRATEGY  as :

“An international business structure where a company's global business activities are coordinated via cooperation and interdependence between its head office, operational divisions and internationally located subsidiaries or retail outlets. A transnational strategy offers the centralization benefits provided by a global strategy along with the local responsiveness characteristic of domestic strategies.

Transnational Companies
The transnational strategy is arguably the most direct response to the growing globalization of business. It holds that today’s environment of interconnected consumers, industries and markets requires an MNE to find ways to configure a value chain  that exploits location economies, coordinate value activities  to leverage core competencies effectively, and ensure that the value chain deals directly with pressures for local responsiveness.

The MNE applying a transnational strategy differentiates capabilities and contributions from country to country, finding ways to learn systematically from its various environments, and then ultimately integrating and diffusing this knowledge throughout its global operations.

A transnational strategy simultaneously exploits location economies, leverages core competencies, and pays attention to local responsiveness.

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