Which of the following is true of a transnational strategy?

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A. Uses licensing extensively outside of the “home” country.
B. Uses standardized products.
C. Uses domestic model globally.
D. Exploits the economies of scale and learning.

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The Correct Answer for the given question is Option D. Exploits the economies of scale and learning.

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Transnational Strategy

In today’s competitive environment, firms have to exploit both local economies and experience-based cost economies in order to survive in the global marketplace; they must also transfer core competence internally while addressing constraints involving local responsiveness. The flow of skills and product offerings should not be confined to one direction, from the home firm to foreign subsidiaries as in the case of international companies. It should also be a two-way process from foreign subsidiaries to their home countries, and vice versa-a process known as global learning. It makes sense to adopt a transnational strategy when cost reductions are high, local responsiveness is high, and leveraging valuable skills within a multinational’s global network is feasible. It could be said that transnational firms are simultaneously pursuing cost and differentiation advantages.

Exploit experience curve effects
Exploit location economies
Customize product offerings and marketing in accordance with local responsiveness
Reap benefits of global learning

FAQs,

Which statement points out the main difference between the global and the transnational strategy?

A) A think-global, act-global’ approach entails extensive strategy coordination across countries, while a “think-global, act-local” approach entails little or no strategy coordination across countries.
B) A global strategy must cope with high production and distribution costs due to greater variety, whereas a transnational strategy can create large economies.
C) A transnational strategy gives local managers more room to make strategy changes to better satisfy local buyers and to better match local market conditions.
D) A global strategy involves selling a standardized product worldwide, whereas a transnational strategy entails selling products that are highly differentiated from country to country.
E) A global strategy involves selling under a single brand name worldwide, whereas a transnational strategy focuses on utilizing multiple brands.

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The Correct Answer for the given question is Option C) A transnational strategy gives local managers more room to make strategy changes to better satisfy local buyers and to better match local market conditions.

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Which of the following is a drawback of pursuing a transnational strategy?

A. It creates bottlenecks for global learning.
B. It exposes a firm to diseconomies of scale and location.
C. It requires a global matrix structure, which is difficult to implement.
D. It involves locating all key business activities in the home country headquarters.

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The Correct Answer for the given question is Option A. It creates bottlenecks for global learning.

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What is one stated purpose of the world trade organization?

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Smirti

(Founder of Management Notes)
MBA,BBA.

I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.

I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,

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Which of the following is true of a transnational strategy?