International Strategy: Context, Concepts and Implications

Chapter 8 Which Country?

MOTIVATION

Most companies begin life in a single country. This still leaves them with another 192 in which to sell their products.¹ Once they have their feet under them domestically, every firm that wants to expand geographically therefore has to decide in which countries to compete.

Indeed, many companies making their first international move have had to wrestle with a choice, like that described in Chapter 2 facing the small Spanish furniture manufacturer. With limited resources it could pursue either the unexpected, but large, one-time order from Uzbekistan, or make a long-term investment in a showroom and sales representation in France. While one obvious solution would be to go for the larger or faster growing market, decisions made simply on the size and attractiveness of the market ignore differences between countries. Even answers to simple questions, such as whether anyone in the Spanish firm can speak Uzbek, might lead the company to avoid the potentially more attractive option, to say nothing of its concern about the political, and possibly even the personal, risk of doing business in Uzbekistan. How does a company weigh up the relative merits of different countries as markets?

Even mature companies that already have a global footprint face the question of how to allocate and prioritize capital and management resources among countries. WebCT, a provider of learning management systems for college students (now merged with BlackBoard), faced ...