Transnational Strategy In MNEs To Balance Global Efficiencies And Local Responsiveness

Critical literature review on the concept of transnational strategy (covered in week 5) and explain to what extent do you think such a strategy can help MNEs to deal with the conflicting demands of global efficiencies and local responsiveness?

To address the assignment question, you should first develop a solid understanding of the concept of ‘transnational strategy’ through a rigorous, extensive and critical literature review of the relevant academic publications, and then analyse and synthesize what you have learned from existing literature into your own arguments, based on which you can provide a clear and convincing answer to the assignment question. It should be noted that simply reviewing what others have argued in the existing publications is necessary but not sufficient for the purpose of addressing the assignment question.

Effective Strategies for International Business

Topic:  Effective strategies in MNEs for mitigating conflicting demands in case of global efficiencies and local responsiveness.

International strategies are used for the development of the business in the international market and to consolidate their place in the competitive business scenario. In most of the MNEs, companies are trying to enhance their market by exporting the product at the initial basis and then approach for the proper movements. There is some merger process along with the collaboration or franchising to enter the international market. Most of the companies follow that policy. The entering company needs to maintain some ethical basics like increase in market size of the nation, economic scale and learning of the nation, and advantage of the location the business wants to establish (Miska, Stahl and Mendenhall 2013). The approach of marketing also considers the choice of customers and the need for the product in that particular market. The international business opportunity comes through the investment that the company initially does to internationalise the business. There are some same field competitors as well but the technological development and innovative infrastructure help the new business to make a good ground for them. There are different strategies in business unit to develop the operating system that encourages market responsiveness for each country, the new company needs to analyse the process to control the mannerism to encourage market opportunity of the business.

The thesis statement of the essay highlights the legitimate international business strategy for new company and the impact of transnational business approach in the global and local market is also important in this case. The realisation of business in the international market is important and CSR team of the organisation helps to manage the perspective for the organisation.

Organisation has to deal with some conflicting demands as the innovation and technologies improvement will be there in other similar companies, so demand for the new company will be high in order. As enlighten by Sun et al. (2012) increasing institutional complexity is the first conflict that comes in that case and fragmentary pressure in devolution to local authorities will be there. The force form the globalised process and change in business infrastructure is important in that case. The innovative advancement in companies may challenge the process. Increased market access in targeting country may consider as the conflicting demand for the organisation (Verbeke and Asmussen 2016). Greater commoditization of product and services and importance of scale economies is importance to grab the market in case of business administration. Harmonization of regulation and technical operating standard is important for the quality standard increase for the organisation. The wider use of international business approach delivers better opportunity in business by making their ground.  

Conflicting Demands in MNEs

The globalisation of business mitigates the territory and advances those products in international market. The opportunity of globalised business encourages the process exporting business from one specific nation to another. The choice of customer of that place is important and trade barriers are relaxed through the process. Technical operating standard and professional improvement in business help the entire process. As stated by Tregear (2015) the international strategy helps in case of globalised the business. In case of globalised business market, company allows making operating standards and equal standard set of business advancement is there (French et al. 2012). The trade barriers are mitigated and company allows doing business in different nations. The taste and trade culture of those companies are important in that case but the CSR team will take care of that. The technological advancement and deregulation of barrier in investment are there and quality standard is maintained throughout the process.

Innovations are important for business enhancement. Improvement in technological forces helps the organisation to find some better technologies that initiate some changes in revenue generation and need for product. The life cycle of products is become shorten by the use of new technologies as the technologies enhance the use of products and machines. The rapid diffusion through new technologies is quite common matter and production rates increase through the process. As mentioned by Ormiston and Wong (2013) the impact of innovation creates some external pressures on other companies. The innovation will be high at the end and the process of marketing and manufacturing the product needed to be unique. As commented by Cavusgil et al. (2014) the product is needed to be important in market standard and in case of a global market the product should have a range of extent. The competitive force against other companies will diminish if the quality of the product has the delivering guts to beat other companies. There are four basic strategies that company based on in case of international transaction of products. Global strategy, transnational strategy, International strategy, and Multinational strategy are the four significant strategies that maintain a high and low graph in pressure for local responsiveness and cost pressure structure.

Transnational strategy is a business approach to selling one product and promotes a particular product all over the world. This is an approach that most of the companies do for the retention of their target customers all over the world (Stahl et al. 2012). This is a way to channelize all the people in the same direction and make a good image to the mind of target customers. Transnational strategy in business deliver some simple operation process in case of the geographic and administrative way but the simple international marketing goes long enough in global territory. The major advantage in transformational strategy is the expanding of business without adopting some new process or promotional approach. The market may be widening in that case but the promotional tactics and approach will be the same in case of generating better sales and deliverance (Goddard et al. 2012). The saving of expenses is high as the finding in the line of new technologies and new approaches are not found there. Cheap labour recruitment and raw material accessibility will save lots of money in this process. Implementing process from other countries and adopt them with the business strategy help the company to enrich their business in this new environment. The culture of that place or the traditional; quality maintenance is the implementing thing with the business and benefits of good things are there with the new adopting culture help transnational strategy to grow in the targeted country.   

Importance of Innovation and Technology in Business Growth

The impact of transnational strategy on MNEs is impressive in quite a few cases. The strategic approach of most of companies are different and they have maintained their changes in a legitimate order. In case of multinational enterprises, international business market acceleration and business enhancement is important and the process is important to move and will do business in international market and increase the revenue. As commented by Braccini and Federici (2013) the process of revenue generation in that case is important and that is the reason, strategic uses of global, multinational, transnational all these process are made and evaluated for the business. Through transnational business process, the promotional strategy of the organisation is same in case of global acceleration. The effectiveness of promotion is the trust of customers globally.

In MNEs, companies are doing their best to promote in local market and for them this is quite a good move in to build a structural inputs in local effectiveness (Teh and Sun 2012). However, in case of international market the possible opportunities are less in number for the promotional activity. Thus appropriate acceleration in business is not possible, so the economic approach of the business needs to be concerned. The approach of using transnational strategy in global market is a kind of effective strategy for MNEs as the approach of the bringing a new strategy and innovation delivers economic upholds as well but that will not confronted in case of using transnational strategy (Frederick 2014). The strategic movements in international markets of using transnational strategy for the business acceleration is less in risk also, as the promotional approach of business is already a successful one in local market.

Some big companies like Nestle, Johnson & Johnson, Coca-Cola, IBM, Proctor & Gamble all these companies are the example of transnational company, as most of the products from these companies are followed the process of same promotion and selling way out in the global market. As asserted by Moore (2016) the structure of transnational organisations has the dimension of geographic, product and functional level. This will be an adaptation of hybrid structure and some of the business activities are associated in that case. As stated by Mahembe and Engelbrecht (2014) the management has some specific roles to cover with an input of particular strategy, marketing and manufacturing process helps the product market to endorse their product in the same strategy that parental nation has done at the initial level. The confrontation may come in law and order of the target nation, but the effective relaxation and completion of trade barrier will help the process of functional and market supportive options (Roberts 2015). Issues will be there in case of complexity by balancing the product in more than two countries. The non-core functions can be changed. The virtual structure of promotion and connected alliance opportunity of the company is the key deliverable in that case but the approach of core marketing analysis is same as the strategy signifies (Liu-Farrer 2013). The theory also concerns with several divisions in case of different products and some emergency situation is there in some cases for the non-core functions. In that situation, core function maintenance and virtual structure support help the entire process. The complementary skill of business opportunity and strategic objectives are achieved through the process of transnational business structure.

Transnational Strategy in MNEs

Ownership advantage and internalization advantage are the key beneficial process for Eclectic paradigm. The determination of greater values in national and international markets and think over the best suitable approach for the company in that situation. This is the best approach to the cost-effective options of quality and that focusing on the quality of the product (Dunning 2015). There are three major components of eclectic theory like comparative advantage, ownership advantages and internalization advantages. These three factors focusing on the cost and resources, consideration of patent rights and effective marketing locations.

Comparative advantage is based within a particular nation and consideration of the product is high in that case. The cost and resources of the one location are compared in that case and maintained throughout. The second factor, ownership advantages defines branding, copyrights, trademark and patent rights in foreign market. The ownership advantages are intangible and there are skills to highlight in foreign market for the acceleration of business. Internalization advantages are the last factor that makes cost-effective relation with market. As commented by Dunning (2015) the negotiation and outsourcing of products are important in that case and companies are connected with local products for the development of the market. This is a choice to reflect if the potential astringent company can encounter the organization’s manufacture requirements successfully at a lower cost than if the organization achieved and accomplished the production by its own.

In the case of global efficiency the created value by the companies is different in product promotion. The process of global scale depends on the market value of the products and local responsiveness in case of global strategy highlights the matter. The worldwide exports through marketing are good in that case but the application of different strategies is creating some effectiveness in global efficiencies (Lin and Tao 2012). The key objective of the global presence is the perception of global marketing and deliver positive perspective in business so that product will accustom with the new environment. The global trend in business is key issue in that case as the accelerated change in effectiveness become low as the promotion nature and opportunities must change in some cases. The evaluation of competitive advantage is based on this process (Beugelsdijk and Mudambi 2014). Marketing perception in modern times accelerate the global change and most of the companies try to deliver some innovative product through their manufacturing process.

Local responsiveness is based on the native country, where the business has started. The social media responsiveness, mobile marketing promotions, market demand for the product and importance of the product in the modern market is the key issue in that case. Local response from the product is important and thus some free campaigns will also be formulated by the company so that reach in the international market will huge (Roberts 2012). The sign of productive economy is also there to be based on and companies assume a range of revenue generation in international market. According to the range of income they assumed, administrative department declared that amount of business funding at the initial time. An idea of change the business marketing policy is important for the modern business effectiveness in the particular market. The competitive advantage of marketing approach will be unique and that differentiate the promotional strategy as well as the product itself.

Impact of Transnational Strategy on MNEs

In case of effective local responses create the first impact over the business, so initially, this is the most important approach of marketing. After the good promotional and extensive market reach by the company, then international strategies are taken in form of transnational strategy or global or international (Liu-Farrer 2013). However, the evaluation of the market is there long before the business establishes. Thus, the synchronised process of effective mannerism persists in that case, so that local and global effectiveness both are used in the positive format.

Conclusion

Therefore, the essay can be concluded that MNEs have options in form of global, international, multi-national and transnational strategies. In the case of international business expansion, these strategies have played important parts of market acceleration. Some companies are fixed with their transnational strategy and one promotional process and selling in market process is there for global approaches. Local effectiveness is the initial confirmation of business to assume the market extension they get in the international market and that approach delivering them a good view in global marketing in business.

References

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