Two Important Lessons From Successful Transnational Companies

What we can learn from the strategy of transnational companies


Transnational companies have worked hard to achieve their global reach, and there are many lessons to be learned from their achievements. The most important lessons aren’t magic formulas to follow, but are insights into how they grew.

No matter what business you’re in, here are 2 important lessons from some of the world’s top transnational companies that you can apply in your own business:

1. Continually respond to the market’s demands

Responding to the market’s demands seems like basic advice. However, it’s advice often ignored when a company becomes attached to their product or service. Sometimes responding to the market’s demands requires entering an entirely new sector, or modifying your existing approach.

How Unilever became a top transnational company

Founded in 1930 as a Dutch-British company, Unilever got its start by selling soap, processed foods, and other consumer goods throughout several countries. Today, the company is known for making popular products like Ben & Jerry’s ice cream and Dove Soap.

Grossing $8 billion in 2016, Unilever remains one of the most successful producers of goods nationwide.

How did they do it? They didn’t start out with a vision to become a transnational company; rather, they evolved into one by 'retaining what was useful and rejecting what no longer worked.'

In other words, they didn’t just open up headquarters all over the world and expand. Their products, which came first, required proximity to local markets. They had no choice but to expand as their market required. They also weren’t afraid to change gears when they saw the market moving in a new direction.

For example, during World War II, the entire food industry was driven by raw materials. Unilever’s most important raw materials were tea and edible oils like the kind used in margarine. However, when the demand for raw materials dropped, they shifted their focus to preservation technology and distribution systems. This was a smart move.

Through this new focus, they figured out an efficient way to handle frozen products and became the world’s largest ice cream company. Their technology also earned them strong market positions in other frozen foods.

There’s nothing more effective than continually evolving to meet market demands. If Unilever had continued to position itself as a supplier of raw materials, they’d have missed the window of opportunity that brought them major success.

Changing to meet technological demands

Another great example of an international industry leader that expanded to meet market demand is Ria. Based out of New York City, Ria is the third largest money transfer service in the world. With over 100 companies in the sector, this company has been emulated by many other money transfer services.

The company was originally established in 1987 as a brick-and-mortar business to help migrants send money back home. Today, they’ve satisfied the market’s demand for sending money online.

According to a case study published in the May 2016 Transnational Marketing Journal, 'As of December 31, 2015 Ria’s global network spanned over 147 countries with services in more than 292,000 locations with growth that shows no signs of slowing.' Ria has even surpassed Western Union to become the market leader in the US-Mexico corridor.

2. Transnational leaders have power

The average person may not be able to influence the policies of advertising platforms like Facebook and Google, but transnational companies do.

Facebook and YouTube have been facing severe scrutiny for promoting fake news and offensive content. The content is user-generated, but advertisers are holding the social media companies accountable for allowing what they call a 'swamp' of fabricated news, racist, and sexist content.

Advertisers have a problem with the content because their ads are being displayed next to the offensive content. When consumers see ads alongside questionable content, they associate it with the advertiser. This happens despite the fact that companies don’t have complete control over where their ads are displayed.

Unilever is just one of several corporations that threatened to pull their digital ads if the companies didn’t do anything.

In the article linked above, Google said they support Unilever’s position, "There is nothing we take more seriously than the trust and safety of our users, customers and partners, and we will continue to work to earn that trust every day."

While Google may value the trust and safety of users, what drives their operation is advertiser dollars. Unilever – one of the world’s largest transnational companies – pulls a lot of weight in that department.

It’s all about value

While there is no magic formula for achieving transnational success, one thing is clear: success occurs in direct proportion to the value of goods and services provided to consumers. With this comes the power (and responsibility) to impact social change.

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