What is a key characteristic of transnational strategy?

A transnational strategy is characterized by its ability to simultaneously pursue global efficiency and local responsiveness. This strategy seeks to balance experience-based cost advantages, which come from the efficiencies of operating on a global scale, with location advantages that arise when operations are tailored to meet specific local market demands.

The effectiveness of a transnational strategy lies in its dual focus: on one hand, it aims to leverage commonalities across different markets to reduce costs and increase competitiveness, while on the other hand, it recognizes the need to adapt products or services to fit local tastes, preferences, and regulations. This balance enables companies to capitalize on scale efficiencies without completely sacrificing the ability to tailor offerings to the nuances of regional markets.

In contrast, some of the other choices reflect approaches that are too one-dimensional or limiting. Emphasizing cost reduction only can hinder a firm's ability to address local needs effectively, while avoiding localization completely would ignore the necessity of responding to different market demands. Additionally, focusing solely on local market demands can lead to lost opportunities for cost efficiencies that could be achieved on a broader scale. Therefore, the essence of a transnational strategy is its unique ability to integrate and balance these competing priorities.