Ultimately, what determines success for companies expanding overseas is their grasp of the underlying principles of competition. These intrinsic laws and fundamental logic help us identify structural trends, and strategic opportunities are invariably embedded within such trends. The Art of War lays bare the underlying logic of winning, and it can help overseas-bound enterprises avoid common decision-making traps.

Strategy Before Action

The Art of War opens with the declaration: "The art of war is of vital importance to the State. It is a matter of life and death, a road either to safety or to ruin. Hence it is a subject of inquiry which can on no account be neglected." This is the most fundamental reminder for decision-makers: strategic decisions are matters of survival, and they must never be made casually—they demand the utmost caution and thorough deliberation. The same applies to the decision to go overseas: it must be approached with seriousness, prudence, and comprehensive scrutiny. Treating overseas expansion as a lighthearted venture, blindly following the herd, or rushing in recklessly is a sure path to catastrophe for any enterprise.

The most profound lesson of military history is that strategic errors made before the fighting begins are nearly impossible to correct once hostilities commence. Never count on improvisation or luck to carry the day without preparation. There are not that many accidental victories in this world—the outcome is often determined before the first move is made.

Sun Tzu continues: "The general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat—how much more so no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose." The more thorough and penetrating the analysis, the greater the odds of success; the cruder and more one-sided the analysis, the smaller the odds—and going in with no preparation at all guarantees defeat.

Sun Tzu

The victorious army only seeks battle after victory has been won, while the army destined for defeat first fights and then seeks victory.

This is the core dividing line between winners and losers. Winners always amass sufficient conditions for victory and secure an advantageous position before committing to a decisive battle—and the same holds true for going overseas. That is why their overseas success is a high-probability outcome: they fight battles they are confident of winning. Losers, by contrast, often charge in with no preparation, driven by a "let's just get out there first" mentality. When they fail abroad, they can only blame bad luck—which is, in essence, a profound abdication of responsibility to the company and its employees.

"Seeking victory after fighting" is essentially blind decision-making; "seeking battle after victory" is rational decision-making. Before going overseas, a company must conduct rigorous assessments, planning, and preparation—achieving a clear-eyed understanding of its purpose, its resources and capabilities, its path of execution, and its likely outcomes. In a word: calculate before you fight, plan before you move. This is the essential starting point for any overseas decision. Companies that approach overseas expansion with a gambler's mentality often pay a steep price.

So how does one assess the odds of success in cross-border competition? Sun Tzu's framework of the "Five Factors" provides the answer: the first is the Way, the second is Heaven, the third is Earth, the fourth is the Commander, and the fifth is Method and Discipline. In the context of overseas expansion, these five factors constitute the five core elements of success.

The Way: Value Symbiosis as the Foundational Strategic Logic

The Way is the fundamental determinant of success or failure. Sun Tzu says: "The Way means causing the people to be of the same mind as their leader, so that they will face danger with him without fear of their lives." The essence is aligning the entire organization behind a shared will, ready to brave any risk together. In contemporary business, the Way translates into a shared mission, vision, goals, and values.

For a company going overseas, the first question to answer is: Why are we going abroad? What defines success? What value can we bring to the local community? The answers to these questions fundamentally determine how far the company's overseas journey will take it.

A review of the history of global commerce reveals that the century-old multinational companies that have survived political cycles, wars, and economic crises are, without exception, long-term practitioners of value symbiosis. This is not to say that going overseas doesn't require making money—it is to illuminate the underlying logic: only by creating value for others can a company sustainably create value for itself. A genuinely successful overseas enterprise must create unique value for the local society; this is the basic precondition for success. For Chinese companies, dispelling the suspicion of being "resource predators" requires proactive sharing of development benefits with local communities, built on compliance with local laws and respect for local culture.

Sun Tzu

He whose ranks are united in purpose will be victorious.

For an overseas enterprise, "united in purpose" extends beyond internal alignment to encompass value symbiosis with the local market and society. Companies pursuing long-term success must proactively create jobs, facilitate technology transfer, fulfill social responsibilities, and meet core local needs—in order to build local influence, earn strategic support and recognition, and lay the groundwork for sustained development. Today, Chinese companies going overseas have evolved from a purely economic logic to a new stage where economic and social logic carry equal weight. To sustain growth abroad, the principle of sharing benefits with local communities must be put into practice.

"Value symbiosis" is never a mere gesture—it is a foundational strategic logic that must be upheld. If a company's values are vague or absent, if it treats overseas expansion merely as a means to make money and extract resources, and if it fails to build local value, it will be exceedingly fragile when crises strike. If a company cannot answer the question "What good does my existence do for local society?" then all its expansion is built on sand, ready to collapse at any moment.

Returning to Sun Tzu's definition—"causing the people to be of the same mind as their leader"—we might broaden the concept of "the people": here, it includes not only internal employees but also overseas local employees, governments, communities, partners, and consumers. Only when all stakeholders recognize that "this is our shared enterprise" can an overseas company truly sink deep roots into local soil and find a lasting foundation for its existence.

Heaven: Reading the Strategic Landscape and Adapting to the Times

In The Art of War, "Heaven" encompasses "night and day, cold and heat, and the seasons"—essentially, the overarching strategic landscape, the trends, and the strategic opportunities that such conditions release.

As the old saying goes: "When the times are favorable, heaven and earth conspire with you; when they are not, even heroes cannot act freely." Another adage declares: "Those who follow the times will prosper; those who go against them will perish." The starting point of strategic thinking must always be the grasp and exploitation of broad trends. Whether a company should go overseas, and in what direction, fundamentally depends on whether the move aligns with major trends in policy guidance, technological progress, economic development, industrial relocation, and geopolitical shifts.

For Chinese companies today, multiple trends are generating clear dividends of the era: strategic opportunities created by the Belt and Road Initiative, new spaces opened up by the digital revolution, sustained economic growth driven by the rise of emerging markets, and the powerful momentum generated by global supply chain restructuring and the outward shift of Chinese manufacturing. These are all macro-trends that Chinese companies cannot afford to miss.

Yet "Heaven" inherently possesses a dual nature—the alternation of yin and yang, heat and cold—and the same holds true for overseas expansion. While we see great opportunities in these trends, we must also confront their other side: intensifying geopolitical conflicts, rising trade protectionism, and surging anti-globalization currents. These are headwinds that must be navigated in the course of going overseas. The current "times" thus contain a dual tension created by the interplay of favorable tailwinds and adverse crosscurrents—an environment that is complex and highly volatile.

The key to success in overseas expansion is to first "read the landscape"—that is, to discern the logic behind macro structures and grasp the latest dynamics in geopolitics, technological change, and industrial relocation. This is the prerequisite for all overseas decisions and actions. But reading the landscape is not an end in itself. Afterward, business leaders must take two further steps. The first is adapting to conditions: innovating business models amid adversity, countering moves as they come, transforming danger into safety, and guiding circumstances to one's advantage. True masters, like surfers, are precisely those who complete their own moves amid turbulent conditions, achieving growth against the current. The second is leveraging conditions: converting the pressure of headwinds into the driving force for building a resilient global network. When you lay a solid organizational foundation during a period of pressure, you will naturally accumulate sufficient competitive momentum when the next tailwind arrives.

True masters can clearly judge the general direction while also perceiving the hidden reefs beneath the tide. They can ride favorable winds to ascend, and they can also preserve themselves and defuse crises amid crosscurrents. A good overseas enterprise must acutely anticipate changes in the macro landscape, so as to grasp the certain factors amid uncertainty and anchor the company's direction in a turbulent, complex environment.

Earth: Market Selection and the Primacy of Fit

The Art of War states: "Earth comprises distances, great and small; danger and security; open ground and narrow passes; chances of life and death." In warfare, terrain is a decisive factor: the most brilliantly fought battles in history often stemmed from a commander's masterful use of terrain, while failures often arose from a general's misjudgment of the ground. The essence of the art of command is the selection and exploitation of terrain.

In the context of cross-border competition, "Earth" represents a company's target market, and the logic is identical to warfare: choosing the wrong market means a company's strengths have no room to manifest; only by choosing a market where its advantages can be leveraged can existing competitive strengths couple deeply with the local market to unlock maximum value.

For a company going overseas, selecting the right target market is the watershed between success and failure. The ultimate outcome is often predetermined at the very first step—the choice of where to go.

How should a company analyze and select its target market? Sun Tzu's four dimensions for analyzing "Earth" provide an excellent framework:

1. Distance: Match Your Organizational Projection Capacity

In military terms, distance relates to the length of the march—the farther the expedition, the longer the supply lines and the greater the risk. For overseas expansion, this translates to market accessibility and resource projectability. Going overseas must align with organizational capacity, especially the capacity to project resources and influence. This involves three critical radii. First, the supply chain radius: can raw materials be supplied reliably, and can logistics costs be sustained? These are calculations that must be made in advance. Second, the management radius: can you effectively control overseas operations, and can you find reliable local agents? This determines the baseline of management. Third—and the most easily underestimated—the cultural radius: can you understand local business logic, social customs, and consumer psychology? The hidden costs of cultural distance are routinely underestimated by far too many who venture abroad, while culturally proximate markets carry an inherent natural advantage.

2. Terrain: See the Competitive Logic Behind Barriers

Militarily, "difficult terrain" refers to commanding heights—hard to take but, once secured, serving as a barrier that deters others from entering. "Easy terrain" is open and flat—easy to enter, but since anyone can enter, competition is inevitably fierce. For overseas expansion, this translates to market barriers: high-barrier markets are difficult to enter, but once a foothold is established, you hold the high ground and can control the wider area. Low-barrier markets are easy to enter, but they also mean you must be prepared for a prolonged war of attrition.

3. Breadth: Match Capacity to Your Strategic Intent

In military terms, "breadth" refers to the capacity of a battlefield. For a company, it means market capacity: large, high-capacity markets allow for a full, systematic deployment, while smaller markets are harder to expand in and are better suited to flexible, light-model approaches. Market capacity and size matter, of course, but they are not absolute—the key is alignment with strategic intent. Some markets may be modest in size but can serve as regional hubs or strategic springboards. This kind of strategic value deserves equal attention, as even a small market may represent the true commanding height worth seizing.

3. Life and Death: Avoid Traps, Seize the Initiative

"Life and death" refers to the risk profile of a market. "Living ground" allows freedom of advance and retreat, providing good space for development. "Dead ground" is a high-risk zone fraught with traps, where a rash entry can lead to total loss. Before going overseas, a company must think through which markets it can enter and control, and whether it can seize the initiative once inside. More critically, which markets must absolutely be avoided? If problems arise, can you extricate yourself intact? These questions must have answers before entry.

The core value of this terrain analysis framework is to clarify a company's competitive advantages and ensure deep alignment with the target market. Not every company is suited to the same market, and competitive advantages cannot be transferred to every market. No matter how well you perform domestically, it does not mean your strengths will prevail across all overseas markets. Each market demands unique competitive advantages and different playbooks. Many formidable domestic companies stumble abroad precisely because they overlook this principle.

Sun Tzu offered three core warnings for campaigns abroad, which remain strikingly relevant to today's overseas expansion: "Those who do not know the plans of the neighboring states cannot enter into alliances. Those who do not know the terrain—the mountains and forests, the defiles and marshes—cannot conduct an army. Those who do not use local guides cannot gain the advantage of the terrain."

First, those who do not know the plans of neighboring states cannot enter into alliances. Going overseas means developing on someone else's turf. You must thoroughly understand in advance the local political, economic, legal, cultural, and religious landscape; the industry's interest structure and competitive dynamics; and the backgrounds, strengths, and true strategic intentions of all stakeholders. Without this foundational intelligence, you cannot effectively integrate local resources or complete your layout in advance—and you will easily fall into unexpected traps and invite unforeseen troubles.

Second, those who do not know the terrain cannot conduct an army. Going overseas involves numerous traps, both visible and invisible, each capable of proving fatal. Without adequate market risk analysis beforehand, without identifying where the traps lie, and investing rashly, you will discover that behind the surface opportunities lie nothing but pits—and you will sink into the marshes of the market, unable to pull yourself out. Countless companies have already paid astronomical tuition for this lesson: risks must always be grasped before the fact.

Third, those who do not use local guides cannot gain the advantage of the terrain. "Local guides" refers to local talent who understand the terrain. To deepen your presence in a local market and enjoy its dividends, talent localization is an unavoidable imperative. Local talent better understands local consumer habits and behavioral patterns. Without local talent, even the best products often fail to crack the market, and even the most abundant resources are simply wasted. Only by employing local staff can you fight local battles well.

It bears emphasizing that while terrain is critical, the goal is never to find a perfect market—because no perfect market exists. For an overseas enterprise, the key is not to find the best market, but to find the market that best fits your capabilities and strategic intent.

The Commander: The "Wisdom, Trustworthiness, Benevolence, Courage, Strictness" Capability Model

One of the current challenges for Chinese companies going overseas is the acute shortage of leaders who meet the requirements of cross-border operations. For an overseas enterprise, the global leadership of its commander is a decisive factor in success or failure. The five leadership qualities proposed in The Art of War—"wisdom, trustworthiness, benevolence, courage, and strictness"—provide a clear framework for shaping the capabilities of overseas leaders.

Wisdom: Systemic Judgment + Cross-Cultural Insight

"Wisdom" is the prerequisite for a leader to make all the right decisions. For an overseas enterprise, "wisdom" does not mean cleverness in small matters, but rather systemic strategic judgment and insight into different cultures. This is the foundation for gaining a foothold in unfamiliar environments.

Trustworthiness: Building Three Layers of Trust to Overcome the Trust Deficit

Chinese companies going overseas often face varying degrees of trust deficit—partly from stereotypes and prejudice, and partly from the negative legacy left by some companies' short-term profit-seeking behaviors. Overseas enterprises need to build a trust system on three levels. First, trust with employees: whether expatriates or local hires, compensation, promotion, and training commitments must be documented in black and white and strictly fulfilled—only then can the organization be united in purpose and earn employee identification and trust. Second, trust with partners: partners must be convinced that you are a long-term investor, not an opportunist. Trust is the product of long-term accumulation and the most powerful leverage for subsequent project cooperation. Third, trust with local society: many overseas companies focus solely on winning over the local government but fail to earn the trust of local communities and the public, making it impossible to secure a favorable environment for sustained development. Only by making good on promises can a company take root and flourish.

Benevolence: Building a Community of Interest and Emotion Through Empathy

The core of "benevolence" is the principle that "the benevolent love others." In going overseas, a company must not treat local employees and communities merely as resources or tools; it must genuinely build a community of shared interests and shared emotion. For expatriate employees, managers must not focus solely on business metrics while ignoring the intense cross-cultural adaptation pressures they endure. Without attention to employees' psychological well-being, high turnover and low engagement easily follow—and may even trigger mental health crises. Good leaders need empathy: making employees feel understood and heard is the only way to create a team atmosphere of safety and trust.

Courage: Decisive Responsibility in Advancing and Retreating

Sun Tzu says: "Advance not seeking fame; retreat not shirking blame." This is the finest interpretation of "courage": courage is not the bravery of a hothead, but the willingness to bear risk and seize fleeting opportunities when it is time to advance. Overseas operations face enormous uncertainty and pressure; it is impossible to wait for authorization from headquarters for every matter. Without accountability, no team can be led to victory on foreign soil. Even more critical is having the courage to retreat when necessary—fearing no loss of face, taking responsibility without hesitation. Not every overseas project will succeed. Knowing when to execute a strategic contraction and cut losses in a timely manner sometimes requires more courage than forging ahead recklessly.

Strictness: Replacing Rule by Person with Rule by System for Multinational Management

The management radius of overseas operations often spans borders, time zones, languages, and legal systems. The personal, relationship-based management style common in China is difficult to sustain abroad, and the boss-decides-everything model simply cannot meet the demands of cross-regional management. The essence of "strictness" is to replace personal management with clear institutional systems—ensuring orderly operation of multinational teams—while still maintaining a human touch in the management process.

Method and Discipline: Systematically Rebuilding the Organization's Global Governance Capacity

In Sun Tzu's framework of the Five Factors, "Method and Discipline" refers to "military organization, chain of command, and logistics"—corresponding to today's organizational structure, personnel management systems, and logistical support, as well as systemic organizational management capabilities. Organization is the structure, command is governance and control, and logistics is sustainment. For an overseas enterprise, these three together constitute the complete organizational capacity that supports overseas operations.

Genuine victory is always decided at the organizational level, and this is especially true for going overseas. Overseas expansion is never simple market extension; it is, in essence, the reshaping of an enterprise's global governance capabilities. How to make business units distributed across different countries, time zones, and legal systems collaborate efficiently—neither losing control nor becoming rigid—is a core challenge. Without a systemic reconstruction of organizational capacity, it is impossible to support the company's effort to take root in overseas markets.

Cross-cultural management is the most prominent deep-layered test. Chinese overseas enterprises inherently carry Chinese management DNA: intense goal orientation and agile, flexible responsiveness. In the domestic market, these are great strengths, but in overseas environments they often run into walls. Overseas employees generally draw clear boundaries between work and personal life, place high value on the spirit of contract, and will not accept arbitrary changes to established rules. Balancing unified standards to ensure efficiency and compliance with the need for localized, flexible competitive capability places enormous demands on the organization. Companies must find the equilibrium between the two.

Supply chain and logistics support is another critical area. Sun Tzu observed: "A country is impoverished by an army maintained at a distance; distant transport strains the people." In overseas campaigns, long-distance transport consumes national power and leads to impoverishment—and this principle holds just as true today. If a company going overseas must ship all its raw materials, components, and semi-finished products from home, the costs of logistics, tariffs, and time will devour all profit margins and may even drag down the entire enterprise. Sun Tzu's prescribed solution is crystal clear: "forage on the enemy"—that is, build a localized supply chain and support system.

The Highest Wisdom of Going Overseas: Winning Without Fighting

The Art of War contains many additional insights of great value to Chinese companies going overseas. I will briefly highlight several.

Five Questions for Assessing Victory: A Self-Assessment Framework for Overseas Capability

The Art of War proposes: "He who knows when he can fight and when he cannot will be victorious. He who understands how to handle both superior and inferior forces will be victorious. He whose ranks are united in purpose will be victorious. He who is prepared and waits for the unprepared will be victorious. He whose generals are capable and not interfered with by the sovereign will be victorious." These can serve directly as five assessment dimensions for overseas projects: First, do you know when to fight and when not to?—that is, have you objectively assessed the target market and clearly judged whether you can enter and succeed? Second, do you understand how to handle both large and small forces?—that is, do your resources match your strategic ambitions? Third, are your ranks united in purpose?—that is, can shareholders, management, and overseas frontline teams reach deep consensus on strategic execution? Fourth, are you prepared against the unprepared?—that is, have you established systemic risk early warning and contingency plans, "repairing the roof while the sun shines"? Fifth, are your generals capable and free from interference?—that is, can overseas teams receive sufficient authorization?

The Interaction of the Direct and the Indirect: A Dual Mindset of Staying Grounded While Striking Unconventionally

"In all fighting, the direct method may be used for joining battle, but indirect methods will be needed in order to secure victory." Going overseas requires both building "direct" systemic capabilities—including standardized quality control, compliance governance, and supply chain resilience—and achieving "indirect" victory through differentiated adaptation, flexibility, and innovation tailored to local market characteristics.

Know the Enemy and Know Yourself

Sun Tzu

If you know the enemy and know yourself, you need not fear the result of a hundred battles.

This is one of the most widely known sayings, yet it is also one of the most easily neglected principles in cross-cultural management. "Knowing the enemy," in particular, means for an overseas enterprise not merely understanding competitors' products and strategies—true knowledge of the enemy requires penetrating understanding of the target market's cultural psychology, social strata, operating logic, and even its unwritten rules.

Weighing Advantage and Harm: Always Maintain Risk Awareness

The Art of War emphasizes: "One who does not fully understand the harms of using the military cannot fully understand the benefits of using it." Decision-making must see harm in advantage and advantage in harm—first recognizing dangers, then weighing returns. Going overseas inherently carries both opportunity and peril. Only by understanding how to avoid harm while pursuing benefit can one truly enjoy the rewards of overseas expansion; otherwise, one will assume even greater risk.

The Highest Form of Generalship: Strategy First, Diplomacy Second

Sun Tzu

Thus the highest form of generalship is to balk the enemy's plans; the next best is to prevent the junction of the enemy's forces; the next in order is to attack the enemy's army in the field; and the worst policy of all is to besiege walled cities.

Price wars and head-on clashes are the lowest strategy. Going overseas must not become Chinese companies continuing to compete ruthlessly abroad, engaging in destructive competition. True masters prevail through "strategic positioning" and "alliance and cooperation"—and the awareness and ability to build alliances are especially crucial for Chinese overseas companies. This includes not only fostering alliances among Chinese companies abroad, but also building a united front with local stakeholders—local law firms, PR agencies, industry associations, and even the general public—creating a local "support network" to hedge against risk.

Avoid the Solid, Strike the Void: Find Your Foothold

Before Chinese companies collectively went overseas, American, European, and Japanese multinationals had long established themselves in many markets, building brand advantages. As latecomers, Chinese companies must find their competitors' weak points to break through. Transsion's successful entry into the African market is a prime example: by avoiding the head-on competition with Samsung and Apple in the high-end segment and instead targeting the mass market—essentially a "rural encirclement of the city" strategy—it perfectly embodied the principle of avoiding the solid and striking the void.

Complete Victory: The Highest Wisdom of Going Overseas

Sun Tzu

To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy's resistance without fighting.

The highest form of wisdom in The Art of War is complete victory. The most brilliant overseas strategy is not to engage in endless battles with competitors in global markets, but through precise localization, deep embedding, and value symbiosis—to truly integrate into the local market, become "one of us," and make competition no longer necessary.