The transnational model

The Transnational Model by A. Bartlett and Sumantra Ghoshal

Dr. Stephan Buse, The Transnational Model

Challenges of Globalization

Need for Global Efficiency
Need for Local Responsiveness and Flexibility
Need for Cross-Market Capacity to Leverage Learning on a
Worldwide Basis (Worldwide Learning)

Dr. Stephan Buse, The Transnational Model
© Dr. Stephan Buse

Global Efficiency
Converging consumer tastes and preferences
Technological innovations force companies to develop and produce on a global basis (realize experience curve economies)
This requires internal restructuring (rationalized product lines, standardized parts design, specialized manufacturing operations)

Dr. Stephan Buse, The Transnational Model
© Dr. Stephan Buse

Local Responsiveness and Flexibility

National government (regulations concerning local content, import restraints)
Large and growing group of consumers rejects homogenized product designs and performance
Concept of flexible manufacturing

Dr. Stephan Buse, The Transnational Model
© Dr. Stephan Buse

Cross-Market Capacity to Leverage Learning on a Worldwide Basis (Worldwide Learning)
Knowledge-clusters emerge throughout the world fast diffusion of technology increasing costs of R&D (avoidance of double inventions), coupled with shortening product life cycle (take advantage of already available internal know-how) Dr. Stephan Buse, The Transnational Model
© Dr. Stephan Buse

Common Basic Strategies

High

Global
Strategy
International
Strategy

Cost pressure Multinational
Strategy

Low
High

Low

Pressure for local responsiveness
Dr. Stephan Buse, The Transnational Model
© Dr. Stephan Buse

Maximize local responsiveness develop the product and marketing strategy according to national demands
Shift all value-creation activities to local business units high cost structure due to duplication of production facilities
Portfolio of independent business units