Any company that ships worldwide or provides services to consumers or businesses in other countries is considered a global company. An international strategy is usually the first approach most businesses take with global expansion: exporting or importing goods and services while maintaining a head office or offices in their home country.
Global expansion as a business doesn’t have a one-size-fits-all approach. As companies grow and scale, they may choose to invest more in their target markets.
In fact, companies choose from a variety of models, including:
**Transnational Strategy: Transnational businesses operate with a central or head office in one country that coordinates local subsidiaries in international markets. This organizational structure means that there is one overarching brand and center of operations that determine overall decision-making and supply chain management, harnessing the power of scale. Companies McDonald’s, Nike, and Coca-Cola use this model.Multi-Domestic Strategy: When businesses use completely different sales, marketing, and product strategies based on the specific companies they’re operating in. Rather than one global brand, there are many smaller, country-specific brands tailored to local tastes and local customers. Big-name wellness brands like Johnson and Johnson use this model.Global Strategy: When businesses define one global brand, making little to zero changes for other markets. Tech giant Apple is a great example of this - the technology is the same (with a few minor changes in keyboards) wherever you go.**
Companies don’t often choose one model forever. What may start as an international strategy can morph into a transnational or multi-domestic one.
Any international business strategy balances two sides of one graph:
Global integration: How centralized operations are vs. globally distributedLocal responsiveness: How customized a product or service is to a local economy vs. completely standardized
An international strategy ranks low on both global integration and local responsiveness since it’s essentially an extension of a business’ domestic strategy.
With this model, international businesses operate with a central or head office. Rather than use subsidiaries or local branches, an international business keeps a head office in one location, usually their home market. This organizational structure means that there is one center of operations and brand and little to no infrastructure investment in other countries.
Choosing an international business strategy gives you several advantages:
A global, standardized brand that is immediately recognizableMore efficient processes and consolidated management with economies of scaleLower costs with centralization and streamlined operationsSimpler product portfolio
However, there are some trade-offs companies make by pursuing an export-driven strategy:
High taxes and tariffs for import and exportCoordinating supply chain managementCustomer service, especially with time zones, languages, etc.Driving demand and awarenessLocalization and translation (Don’t worry — we can help with that!)
Regardless of these challenges, an international strategy is by far the most popular for businesses, especially as they take their first steps toward globalization and international expansion to different countries. If you’re not sure how your products will respond to different markets, or just want to test it out, following the export model is the safest option.
One of the biggest challenges for international businesses is driving demand and awareness in local markets.
Because these businesses are less embedded in local customs or languages, it can be difficult to know how to appeal to these consumers.