Globalization has changed the way businesses operate. Companies are no longer limited by borders, but with this opportunity comes a challenge: how do you stay globally efficient while meeting the unique needs of local markets? Thatâs where a transnational strategy comes in.
Transnational strategy helps you find the sweet spot between standardization, which keeps your business operations smooth, and flexibility, which helps you connect with local audiences. Hereâs what itâs all about.
đ€ Beginner-friendly guide
In this article, weâll explain what a transnational strategy is, explore its benefits, and share examples of how leading global companies like IKEA and NestlĂ©, are using it effectively. Whether youâre planning international growth or just curious, this guide will give you the answers you need.
A transnational strategy is a business approach that balances global consistency with local adaptability. It focuses on standardizing key operations, like branding and production, while customizing products, services, or marketing to meet the unique needs of local markets.
Letâs say youâre running a chain of restaurants across different countries. You keep the same core menu and standards (so everyone knows itâs your brand), but you tweak some dishes to match local tastes. For example, you might add spicier options in Mexico or offer vegetarian dishes in India.
A transnational strategy combines the best of global efficiency with local adaptability. It has three main components.
Transnational strategy prioritizes centralized operations for efficiency. Think supply chains, production, and branding. At the same time, businesses will allow for local tweaks, like adapting marketing campaigns or product offerings to satisfy specific markets.
International companies will likely standardize core elements of their products or services that donât need to change. This typically includes the brand identity or key features, if weâre talking about software. However, they will customize what matters to local customers (e.g., flavors, packaging, service models, international pricing strategies).
While a global team ensures overall strategy and alignment, teams working in local branches have the autonomy to make decisions that address the needs of every country. This structure allows businesses to move quickly and respond to regional demands without losing sight of the bigger picture.
đ Further reading
Want to learn more about building a global strategy that works? Read about international expansion to discover best practices and expert tips.
To help you follow in the footsteps of Arduino, Deliveree, and Indeavor, check out Global-ready growth, our guide to unlocking international revenue.
In the table below, you can find an overview of transnational strategy benefits, along with examples of each.
| Benefit | Explanation | Example |
| Optimize costs through standardization | When you standardize operations like manufacturing, supply chain management, and branding, you can lower costs across all markets. | Producing products in bulk or using the same materials globally helps you reduce expenses while maintaining quality. |
| Increase local responsiveness | Customers in different regions often have unique tastes, preferences, and cultural expectations you can meet with a solid strategy. | If youâre running a clothing brand, you can adjust sizes to average body measurements in a specific country. |
| Gain competitive advantage | A good strategic approach can help you outpace competitors by offering a global brand that feels local. | International restaurants can serve special dishes in target countries to align with local festivals while keeping the core menu intact. |
| Diversify business risks | Transnational strategy helps you diversify risk associated with economic downturns, political instability, or changing regulations. | If you sell your product in multiple countries and one market faces an economic slowdown, the revenue from other regions will keep your company stable. |
In a transnational strategy, a multinational corporation will structure itself to balance global integration with local flexibility. So, what does this look like in practice?
Think of a company that produces electronic products. Globally, it standardizes its production process to ensure quality and reduce costs.
However, in certain international markets, it adjusts its product features as well. It might offer dual SIM slots in regions where people often use multiple phone carriers, or adapting power plug designs to fit local standards.
By doing this, the company in the home country stays efficient. Itâs able to meet the unique needs of global customers and increase local responsiveness.
Central teams in the head office handle big-picture decisions like branding and supply chain management to maintain efficiency, while people working in the local branches have the freedom to adapt products or services for specific markets.
đĄ Pro tip
When entering new markets, rethink your organizational structure to balance central oversight with local adaptability. This approach supports effective market expansion and helps increase responsiveness in foreign markets. Gradually, youâll be able to grow your share in international markets and gain a competitive advantage.
Some of the worldâs most successful companies have figured out how to operate globally without losing their local touch. Here are a few examples that show how they strike that balance and make it work in different markets.
Coca-Cola maintains its signature branding and global presence, but its true strength lies in understanding local markets.
For instance, in Japan, the company doesnât just rely on its classic soda thatâs a best-seller in the United States. It offers drinks like green tea, canned coffee, and even seasonal flavors such as sakura (cherry blossom).
In India, they tweak their formula to reduce sweetness and cater to local taste preferences. This is how the soda giant remains universally recognizable, and it feels relevant and approachable in every market.
đïž Key takeaway
Dive into the preferences of your target audience, whether itâs taste, design, or functionality. Even small tweaks to your product can significantly improve how well local markets accept your brand.
IKEAâs transnational strategy is all about adapting affordable, flat-pack furniture to the needs of specific markets.
Believe it or not, but IKEA was once âtoo big in Japanâ. The initial venture into Japan in the 1970s faced challenges due to a lack of adaptation to local consumer preferences. The company's standardized furniture sizes were often too large for Japanese homes, and the DIY assembly model clashed with local expectations for fully assembled furniture and high-quality service.
When they revisited their transnational strategy, IKEA took into account the fact Japanese small apartments, and focused on compact and multifunctional furniture.
A favorite among Japanese homemakers, IKEAâs RĂ SHULT is a smaller version of their RĂ SKOG model trolley
In the Middle East, their product range includes culturally relevant items (e.g., prayer rugs), and they make sure food offerings are halal. IKEA also adjusts their marketing efforts to reflect family-centric values in some regions, while promoting urban lifestyles in others.
đïž Key takeaway
Donât just adapt to cultural preferences. Consider the practical realities of your audienceâs daily lives. This includes their living spaces and purchasing habits. Address these details to make your global product feel truly local.
Nestlé is a master of tailoring its products to fit local preferences while preserving its brand identity across the globe.
For instance, the companyâs Maggi noodles come in a variety of flavors depending on the region. You can also find creamy chicken in the Philippines, curry in Malaysia, and soy sauce seasoning in Japan.
Curry flavored Maggi noodles adjusted for the customers in Malaysia
At the same time, Nestlé leverages global supply chains and branding to stay efficient and recognizable worldwide.
đïž Key takeaway
NestlĂ© understands that food is deeply cultural. Small adjustments in flavor or packaging can make a big difference in customer loyalty. Even if youâre not in the food industry, the lesson is that you need to understand cultural preferences and make small, thoughtful adjustments.
Expanding your business across international borders can feel overwhelming, but a transnational strategy helps make it more manageable.
Once you find the right balance between global integration and localization, youâll see itâs much easier to connect with customers in overseas markets. Whether itâs about adjusting your website for international audiences, or adapting your products for new markets, having a strategy in place can support your global expansion.
Want to learn more about increasing responsiveness through localization? The Lokalise Blog is your go-to resource, so make sure you explore other articles as well.
1. Why is a transnational strategy important for businesses?
A transnational strategy helps your business cut costs, connect better with local customers, and stay competitive in a global market. By standardizing where it makes sense and adapting where itâs needed, you can lower risks, meet the unique needs of different markets, and innovate faster. Itâs about finding that perfect balance to succeed both globally and locally.
2. What is the difference between a transnational strategy and a global strategy?
A transnational strategy strikes a balance between staying consistent globally and adapting to local needs. It means businesses streamline core operations to stay efficient while tweaking their products or services to match what local customers want. In contrast, a global strategy focuses purely on standardization.
3. What are some examples of companies using a transnational strategy?
Companies like IKEA and Nestlé are known for balancing global efficiency with local adaptation. IKEA designs compact furniture for smaller living spaces in Japan, and Nestlé tailors products like Maggi noodles with flavors specific to each market.
4. What is the difference between a multi-domestic strategy and a transnational strategy?
A multi-domestic strategy is about fully customizing products and services for each foreign market. Businesses treat every country like a separate market and focus entirely on local needs.
A transnational strategy, on the other hand, tries to balance global consistency with local adaptation. Companies will mostly do business the same worldwide, but tweak particular pieces to fit local preferences.
Author
Ross leads the Content Marketing Team at Lokalise. He's been writing for tech companies for over ten years.
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