International Strategy: Context, Concepts and Implications

Chapter 5 Generic International Strategies

MOTIVATION

At the beginning of this century a major European energy utility made two large acquisitions.¹ It bought a US electric utility based in North Carolina to diversify its country risk and enter a faster growing market. Then it acquired a large European power company with a complementary geographic presence in order to gain scale within Europe. And yet within eight years, the CEO had left, the US operation was up for sale, and a decentralized country organization had replaced the matrix structure put in place after the acquisitions.

Perhaps John Wells could have foretold the future when he slept badly flying over the Atlantic for the eighth time in a calendar year. He knew that his presence in the upcoming meeting in London would add nothing to the discussion, nor would he learn anything of value for his own operation. Indeed, as head of generation for the US utility, John had no interest in the heated debate about which design of nuclear power plant should be chosen for Europe, which was the meeting's focus, and yet his attendance as the US representative on the global utility's generating business operating committee was mandatory. Even then he wondered why his company had been purchased since it shared so little with its European counterparts.

Similarly, Pietro Garibaldi could have predicted the outcome when he struggled to get information from the UK purchasing group about its fuel purchases. Accountable for reducing the ...