This book is designed for executives in companies that compete across national borders who wish to make valuable contributions to every discussion about their company's international strategy.
The decision maker it is written for is a senior manager within a multinational. This does not imply that the ideas apply only to large firms. That decision maker could as easily be the CEO of an Internet startup who is interested in expanding overseas, as the head of Unilever, Sharp, or Ford.
While the unit of analysis might occasionally shift from the firm to the country, the book takes as given the differences we see around the world – differences of geography, culture, economic policy, and institutional structures. This book is less about how the world economy is becoming more interdependent or what social, political, and economic forces are at work. 1 Instead, the book is concerned with how managers can effectively create shareholder value in the world today given all these differences and drivers.
This book is not about international trade theory, although the economics of comparative advantage and international trade under imperfect competition underpin it. Nor is it about international business in the sense of "how to" open an office in a foreign country, or the legal requirements of doing business in different countries, although those idiosyncrasies and vagaries are the background for the text. Neither is it about the specific functional aspects of international business – international marketing and international finance, in particular – although it draws on and refers to those disciplines when necessary. The implications of exchange rate volatility and the financial instruments available to mitigate their effects, for example, are covered when they affect strategic decisions, but the book does not attempt to treat those topics on their own terms. This is not the text to learn about derivatives, or the benefits of exchange rate devaluations, but it will illustrate how those variables affect broader strategic questions. Less is said about joint ventures than in many other texts on international business. Alliances and other forms of partnerships are common in international competition for strategic reasons that will be made apparent in the text, but their specific form, and their operational management, are better dealt with as a subject in their own right.
This is, therefore, unashamedly a book about international strategy. Since so many authors claim to cover this ground when in fact they address tactical issues, an important early part of the text addresses the two definitional questions of what is distinctively international, and what is uniquely strategic about "international strategy"?
As a result of adopting the perspective of the manager in a firm active in international competition, the audience for this book should, first and foremost, be every executive concerned with the formulation and implementation of strategy in a company that competes internationally. For them it should provide a framework and a toolset to resolve the hard decisions they must make every day. It should also be relevant to executives who, even if they do not themselves operate outside a country, nevertheless face competitors from foreign countries.
The book has less to say to policy makers who have to address issues of trade, exchange rates, policies towards multinationals, etc., and who take the country and the welfare of its inhabitants as the focus of their concern. However, in designing those policies, government officials should benefit from understanding the managerial perspective – what concerns them, what motivates them, and what shapes their decisions. Only by empathizing with the incentives and choices that corporate executives face can policy makers eff