Certified Production & Operations Manager (POM) Practice Exam

Which international operations strategy focuses on achieving both high cost reduction and high local responsiveness?

1. Global strategy

2. International strategy

3. Transnational strategy

4. Multi-domestic strategy

The correct answer is: Transnational strategy

The transnational strategy is designed to balance the need for cost efficiency with the necessity for local responsiveness. This approach enables organizations to leverage economies of scale and reduce operational costs by standardizing certain aspects of their operations while simultaneously adapting to the unique preferences and requirements of local markets. By employing a transnational strategy, a company can optimize its production processes and supply chain, taking advantages of lower production costs in some regions while also customizing products and services to meet local tastes and regulatory requirements. This dual focus is crucial for companies operating in diverse and competitive global markets, as it allows them to remain agile and responsive to local customer needs while achieving overall efficiency and cost savings. Other strategies, like the global and international strategies, may prioritize cost reduction or local responsiveness more exclusively, leading to potential trade-offs between the two. The multi-domestic strategy typically emphasizes local responsiveness at the expense of cost efficiencies, further distinguishing it from the transnational approach, which seeks to harmonize both aspects.