Transnational strategies for global expansion combine the best of global integration with local responsiveness.
Ping! There’s your first sale from someone in Mexico. Denmark. Brazil. Italy.
Expanding your business across international borders can be seamless with the power of e-commerce. But the way to stable international growth requires repeatable systems and processes that take your company from selling to different countries to a global brand.
What you need is a transnational strategy.
Any business with centralized operations based in one country but additional overseas operations and assets is defined as transnational. A transnational strategy determines the levels of global integration and local responsiveness for a given brand.
This isn’t the only way companies expand globally — in fact, many companies choose entirely different methods of expansion, such as:
Think of it as a graph, with one axis as local responsiveness (how companies serve a specific market’s needs) and the other as global integration (a global brand with little to no differences between various countries).
An international strategy ranks highly on global integration but low on local responsiveness — ditto for global strategies. Multi-domestic strategies rank highly for local responsiveness but low for global integration.
A transnational strategy gives you the best of both.
With high global integration, transnational businesses operate with a central or head office in one country that coordinates local subsidiaries in international markets. This organizational structure means that there is one overarching brand and center of operations that determine overall decision-making and supply chain management, harnessing the power of scale.
Optimizing your business for high global integration gives you several advantages:
Some businesses give more autonomy to their local branches than others. Balancing corporate decisions vs. local decisions remains one of the biggest challenges for global companies — especially with a distributed workforce.
Combining the power of economies of scale with high local responsiveness — or attention to local markets — ensures a level of customer-centricity that differentiates your brand. Keeping local customers in mind, rather than just selling to foreign markets, is what makes transnational strategies so successful.
Depending on the type of business, this can look like hiring local country managers or field marketers, changing product packaging or colors, or localizing marketing and sales strategies. Optimizing your business for high local responsiveness gives you several advantages:
Attuning your business to win in local markets requires more than just translating your marketing messages or product packaging and shipping them to a new market. It’s much more challenging to coordinate teams around the world, for one.
High local responsiveness also requires you to evaluate product-market fit by country, adjust prices, add currency and payment methods, and think about imagery and colors — in essence, your localization strategy.
A successful transnational model combines high global integration with high local responsiveness, giving you the benefits of both. While not every global business looks the same, in practice, it means international companies must take a global, forward-thinking strategy and combine it with local expertise and changes that best suit each market.
Take five of the most successful multinational companies (MNC) in the world:
The good news? While localization and translation may seem like the most daunting aspects of a transnational strategy, they don’t have to be. Smartling offers a world-class translation software solution and top-notch language services.
That way, you can professionally translate and localize all of your content across devices and platforms without sending a single email, touching any button, or managing strings in spreadsheets. no matter how many markets you choose to enter.