Are you faced with a multinational strategy and want to know how it works? Our article will introduce you to this strategy, its benefits, and its types. Moreover, to make it easier to understand, we’ve also prepared some examples of the most famous companies successfully using it. Keep reading, and you won’t miss it!
🏆 Top Multinational Strategy Examples
🔎 What Is a Multinational Strategy?
A multinational strategy is an approach an international company uses to run separate business units in multiple countries. These units help the global company optimize its services or products based on the market’s preferences to win a competitive advantage. Each of the subsidiaries has independent functions that assist it in the running effectively in the jurisdiction of operation, such as marketing, HR, R&D, and manufacturing.
Advantages of a Multinational Strategy
Developing a multinational strategy is very useful in helping a corporation succeed in different locations worldwide. Your global business will be able to generate new sales by operating in the new market away from home, which is crucial in growing its profitability. Moving to other countries also helps corporations access new resources that can help cut down the cost of operations to enhance profitability further.
You will also find such a strategy helpful in fostering worldwide brand awareness for your organization. Increasing your brand’s recognition and competing more effectively against other enterprises is critical. At the intercontinental level, your multinational will also be able to pull down labor-related costs and create economies of scale. Other advantages of this approach include increasing organizational flexibility and diversifying operational risks.
đź“Š What Are the Four Multinational Strategies?
There are four multinational strategies that your company can employ. Below, we’ve listed them with a detailed description of their features:
Global Strategy
An enterprise that employs this strategy sacrifices its responsiveness to the local market requirements and favors efficiency and lower costs. It’s the direct opposite of the multi-local model. Some minor adjustments to services and products might be made when using this strategy, but the ultimate focus is cutting costs and taking advantage of economies of scale.
Multi-domestic Strategy
A multinational corporation using this strategy does not target efficiency or costs but responsiveness to local clients’ requirements. It means that instead of the company trying to force its products into the local market, it tries to offer them what they prefer. The impact is better acceptance and greater competitiveness in the new market.
Transnational Strategy
This strategy is a middle ground aimed at achieving the best of both sides. The model involves balancing the focus on cutting down costs and maintaining high efficiency with the ability to suit the local clients’ preferences. One company example of this strategy is McDonald’s, which has been very effective in different markets.
International Strategy
A multinational organization that uses this strategy is not interested in adapting operations to local conditions or costs. Instead, it targets to sell its products to newly found markets across the globe. The strategy works best for companies with high-value products that can deliver value to clients regardless of location.
🌟 Multinational Strategy Examples: Multinational Corporations
The following multinational strategy examples demonstrate their application and success with different companies. Check them out:
- Starbucks Multinational Strategy
Starbucks, a coffee restaurant chain started in Seattle, USA, in 1971, uses the multi-domestic strategy to integrate its products and services on the market smoothly. The company tailors its product to meet the needs of the customers it targets in the market. The company has decentralized its structure to achieve its goals, making it easy to swiftly respond to clients’ shifting needs without seeking the headquarters’ approval. With this design, the company has overgrown to reach over 33,833 stores in different countries. - Apple Multinational Strategy
Today, Apple is one of the most respected brands worldwide. It owes its success to the brand’s core values, which include increasing accessibility, supporting education, an inclusive work environment, privacy, equality, and carbon neutrality. The company’s strategy involves applying its values to all parts of the world. That is essential to gain a competitive edge in the international market. Therefore, it doesn’t adapt its products according to individual needs but relies on global standardization to create a unified value. In turn, this ensures the best possible brand experience for all clients. The company sees the entire world as one market and offers all the same services and products.
In conclusion, a multinational strategy means expanding globally while adapting to local markets. Effective implementation of this strategy requires careful planning, coordination, and flexibility to balance global and regional needs, as we illustrated with the examples of Starbucks and Apple. We recommend checking out our samples, as they will also be helpful for you.