Transnational businesses must strike a delicate balance between global integration and local responsiveness to market their products globally while remaining sensitive to local customer expectations. This balance is challenging to achieve, but you can learn essential best practices from companies that have successfully scaled their business globally.

What’s a transnational strategy?

A transnational strategy is a type of global expansion strategy aimed at expanding your brand to an international audience. All these global expansion strategies place varying importance on two primary tactics: global integration and local responsiveness.

• Global integration seeks to produce, market, and sell products far and wide by leveraging standardization to keep costs affordable.
• Local responsiveness aims to customize a company’s offering in each market to fine-tune it for that audience.

A transnational strategy aims to combine these two seemingly exclusive approaches into one cohesive business strategy. To achieve this, transnational corporations deploy a careful mix of global integration and local responsiveness to ingratiate themselves in local markets without straying too far from standardization.

Take McDonald’s as an example. They build new websites from the ground up to market to each locality. The German website has a different design and content than the American one, presumably because that design and content resonates more with local users. The two sites’ design and marketing tactics are different, but the branding is the same, and many of the menu items use similar ingredients.

How a transnational strategy differs from other global expansion strategies

Global expansion strategies are easily distinguished by their varying commitment to global integration and local responsiveness. Some prioritize one, while others place equal importance on both.

The four types of global expansion strategies include:

• Global strategies, which prioritize standardization across every market with relatively little focus on local responsiveness.
• International strategies, which place little emphasis on global integration or local responsiveness. They opt instead to use the same tactics abroad as they do in their home country.
• Transnational strategies, which aim to find a perfect combination of global integration and local responsiveness. This balance lets companies appeal to customers in every market without sacrificing the benefits of standardization and uniformity.
• Multidomestic strategies, which use high local responsiveness to appeal to a wide range of markets and eschew global integration’s standardization.

Transnational strategy benefits

Striking the perfect balance of local responsiveness and global integration is no easy feat. But if your team can manage it, you’ll enjoy the following benefits.

More opportunities

Globalization distributes your products into new markets worldwide, which unlocks opportunities for brand awareness and market penetration. As long as you can maintain a foothold in those new markets, your brand’s universal popularity will grow, enabling you to scale up as you gain new customers globally.

Stronger market share

Relying on local subsidiaries and franchises means leveraging their unique perspectives to fine-tune your brand for their market. They know these industries, so they know best how to resonate with the customers there to grow your market share.

Fewer costly errors

A transnational strategy remains sensitive to cultural differences and encourages you to pivot your marketing to avoid costly mistakes. In contrast, the global strategy sends its products far and wide with little regard for these differences. This sets you up for significant errors, such as pushing a food item that’s unpopular in the region or a vehicle that doesn’t meet regulatory requirements.

Increased efficiency

Transnational corporations distribute their manufacturing, management, and marketing into each country they enter. This creates a system where products sold in a particular region are also made and marketed by people who live there, which reduces costs and increases agility.

Transnational strategy challenges

Every global expansion strategy has obstacles to overcome, but transnational strategies are the most challenging. The other three strategies make trade-offs in either global integration or local responsiveness to circumvent these challenges, but transnational strategies seek to benefit from both without sacrifices. Here are the most significant hurdles to expect.

Decentralization

Distributing your global marketing efforts so widely can spread your brand too thin. That means some local markets will stray too far from your brand’s central message, resulting in inconsistent user experiences.

You don’t want your local teams to compete. You want them to collaborate on achieving a consistent brand identity that adapts as needed. To accomplish this, ensure each subsidiary or franchise meets standardization guidelines. Your central marketing team should partner with local teams from the start to develop marketing campaigns and plan their website to harmonize well with the global marketing strategy.

Failure

Every time you move into a new market, you’re betting that your brand can succeed there, and sometimes it won’t pan out. The key to a successful transnational strategy is taking smart risks. 

Clever business leaders will fund each venture into a new market for a set number of years. Afterward, they’ll decide whether to cut their losses or funnel more resources into it.

4 tips for developing a successful transnational strategy

Striving for a transnational future requires a combination of well-informed choices and flexibility. This intricate combination is formidable to accomplish, but these four tips will help you get there.

1. Do your research on new markets

Every new market presents unique challenges, like unfamiliar customer expectations or design principles. Japan is an excellent example because they have design tastes that are foreign to many Western marketers. Take, for instance, the difference between Coca-Cola’s Japanese website and its American counterpart.

It’s your job as a marketer in a transnational company to learn about these differences. Do your research well before you enter a new market. For example:

• What’s your target market in this new locale?
• How is it different from your previous target markets?
• What cultural influences resonate with the audience?
• How do regulations in this region differ from other markets?

2. Adapt components of your brand identity to different markets

A consistent identity improves brand recognition and awareness, so some colors, fonts, and design principles must remain consistent across every market. But to ensure your identity resonates for various audiences, consider adapting some components to local markets, such as website slogans and marketing materials.

3. Make strategic commitments

Decide early where you want to lean into global integration or local responsiveness. Remember, a transnational strategy uses both, but not for everything. Your goal is to find the right mix of standardization and responsiveness. For example, you might craft a website that looks the same in every country but rely on local marketing teams to generate individual campaigns to run in their region.

4. Keep an open mind

Don’t let rigid thinking prevent you from trying new techniques that could resonate not just in one location but across the globe. This mindset will open you up to surprising new ideas, such as a product you should feature in more locations or a slogan with mass appeal.

Transnational strategy examples

The following brands are transnational corporations that provide excellent examples of blending global integration with local responsiveness. They’ve already trailblazed the transnational path, and you can learn from their mistakes and successes.

McDonald’s

McDonald’s has permeated the globe with a whopping 40,000 locations spread throughout 120 countries. Every location features the famous golden arches and sells some version of the Big Mac. For example, in India, where it’s illegal to sell beef in many states, they sell the Maharaja Mac, which is made with chicken.

Nike

Nike’s global marketing tactics earn a gold star for creativity. They sell similar shoes worldwide, but the key difference is who endorses their products. In Brazil, Nike advertises endorsements from Ronaldinho Gaúcho, a soccer superstar. In Europe, they lean on Roger Federer, a famous Swiss tennis player. This strategy leverages something every country has in common: a deep and abiding love of sports.

KFC

KFC is an interesting case. They have a staggering 25,000 restaurants spread over 145 countries, and while their primary offering is chicken, their menu options are unique to each market. For example, they make a chicken sandwich topped with creamed corn in Brazil. However, they’re also well-known for committing a humorous translation mistake. When they launched in China in the 1980s, they mistakenly translated their slogan “Finger lickin’ good” to “Eat your fingers off.” That’s the kind of localization mistake you want to avoid.

Unilever

Unilever owns over 400 companies, including Hellmann’s, Lipton, and Dove. The key to their success is how they establish these companies in each market. They hire local managers and build infrastructure where needed, enabling them to staff and run their offices and factories as close to their customers as possible.

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