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Transnational Strategy
According to (Hill & Hult, 2020), any organization functioning in the global marketplace faces two competitive pressures: constant pressure to reduce costs and be locally responsive. These two pressures affect the organization’s ability to experience location economies and affect its ability to leverage products and transfer skills within the enterprise. Tackling both pressures at the same time is not easy. On the one hand, reducing costs would require the organization to minimize its unit costs mostly by economies of scale. On the other hand, to be locally responsive, the organization needs to differentiate its product and services offerings that could include even include the marketing strategy. If an organization operates in twenty countries, it might need to differentiate its product offerings a similar number of times or less.
Doing so would lead away from standardization, increasing costs. Such scenarios can create a paradoxical situation. (Hill & Hult, 2020), divide firms into four types of representation and strategic focus purposes. Each of the four types represents a quadrant, each representing effects based on cost reductions and local responsiveness. The four quadrants represent the following. Quadrants are determined based on low or high pressure for cost reductions and low or high pressure for local responsiveness (González, 2019).
Any organization with high pressure for both cost reductions and local responsiveness requires a global strategy. To counter the pressures of both the cost reductions and local responsiveness, organizations employing a global strategy need to realize location economies and experience effects, transfer core competencies and skills throughout the company, leverage their products and services globally, and counter any pressure for local responsiveness. (Hill & Hult, 2020) Emphasize that in any global company of today, the transfer of core competencies and skills within the company need not be from the home country to foreign markets. This suggests that the flow of skills and competencies needs to happen from the overseas markets to the home market in many cases. There are many instances where organizations have learned new processes or marketing strategies in local markets in various countries that can be applied in home markets, resulting in a multidirectional flow of skills and competencies. The ideal scenario of tackling both cost reduction pressures and differentiation is not easy to achieve (González, 2019).
Achieving such a strategy puts conflicting demands on the organization. One successful example of an organization that has implemented a global strategy is Caterpillar (Hill & Hult, 2020). Caterpillar faced cost reduction pressure through its competitors, mostly out of Japan, such as the Komatsu. Komatsu has been a global brand that has reliable heavy machinery that is available at low costs. To deal with Komatsu’s cost reduction practices, Caterpillar redesigned its product to produce many identical components and invested heavily in large-scale manufacturing facilities along with assembly plants in each of its operating markets. The assembly plants are the game-changer. These plants produce materials that add local product features that tailor the final product to meet local needs (Oshionebo, 2016). Conducted a thorough study in determining the differences in global strategy characteristics for innovation or technology transfer and that of a more traditional approach such as international strategy.
The conventional strategy generally involved the approach wherein an organization would develop technology in its home country or one location and then adopted or replicated in other local markets that the organization operates in. The process of technology adoption was also known as outward learning and would most often be a one-way technology transfer. Gerybadze and Reger found five distinct characteristics of the transnational strategy related to innovation or technology transfer:Instead of one, multiple locations are used by the organization, which are designated as centers of learning (Wilkins, 2012).
The intensity of technology and market interactions are high.
In contrast to the traditional approach of only outward learning, organizations employ inward learning and outward learning, such as adopting a successful strategy from a foreign market into the home market.
Different units of the value chain undergo cross-functional learning. Technology transfer takes place between locations and functional units (Wilkins, 2012).

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