What is a transnational company?

Transnational companies are those that were initially created in a specific country but that over the years have expanded their presence to international markets, giving rise to new subsidiary companies around the world.

To understand the concept of a transnational company, it is important to bear in mind that everything starts from a parent company and it will be said parent company that extends to other countries. Therefore, to know what impact this has business term we must move into the context of financial speculation.

What characteristics does a transnational company have?

One of the characteristics of the transnational company is that an organization and structure will always prevail based on the policies of the parent company and it will be the parent company who sends orders to the companies in the rest of the countries. In addition, among the properties of a transnational company we highlight that:

  • All transnational companies operate privately, and they always do so through different investors and shareholders, who at the same time define the strategies for action.
  • Transnational companies are characterized by offshoring, and that is their main strategy, so that before opening a new subsidiary company in another country, a market study will be carried out that can define what are the most beneficial conditions for the company . Along these lines, the legislation of each country in particular is essential.
  • The study of competition is the maxim of transnational companies because their objective is always to obtain the maximum possible profit, so previously when studying the new markets in which they can participate, they will always take into account how they can reduce costs.
  • Transnational companies are part of the process of globalization to the extent that they accumulate all their capital in different nations.

3 success stories of transnational companies that you surely know

There are a large number of transnational companies that we all know and each one of them belongs to a different sector. However, it is true that the sectors of activity of transnational companies are mainly those of ICT.

One of the examples of transnational companies that never fails is that of Coca-Cola, and the keys to the success of this company, we are left without hesitation with their strategies of marketing and its advertising actions that have gone down in history, so much so that today its main campaigns and spots.

If we talk about companies in the technology sector, we have to talk about the transnational company par excellence at the moment and it is the giant Apple, known for its emblematic products and its arduous research.

Finally, we will mention the Allianz company, from the insurance sector. This company, originally from Germany, has known over the years to reinvent itself and acquire even large companies in the same field of action.

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