Question

Shine Enterprises Inc. is a large financial conglomerate that operates in more than 50 countries and employs over 80,000 people across the world. It operates through multiple regional product divisions, which tend to function as autonomous profit-and-loss centers. This allows the company to reap significant economies of scale. Though each division acts as an autonomous firm with its individual regional leaders, frequent sharing of knowledge between the divisions allows for global learning. These factors help the company reconcile product and service differentiations at low cost. Which of the following strategies does Shine Enterprises Inc. most likely use?A) A focused-differentiation strategyB) An international strategyC) A multidomestic strategyD) A transnational strategy

Answer 1

Answer: D. Transnational strategy

Explanation:

With a transnational strategy, a company will operate in different countries in order to have access to a larger market from which they can get more profit.

Companies using this can have a centralized structure or a decentralized one where the divisions in various countries are very independent. This is what is being done in this scenario and the advantage of this is that it enables the divisions in the country to be more efficient at facing country specific challenges because a domestic company would understand things better.