Slightly more than a decade ago, Europe was warned that U.S. business was about to take over the continent, but the competitive balance has shifted and the Americans are taking another look at their strategy.

Some of the U.S.-based multinational corporations that flocked to Europe in the postwar period have slowed their investments on the continent and many are sending their U.S. executives home. Some companies with plants in Eurpoe now find that they can manufacture more cheaply in the United States. Others are discovering that exporting to Europe can be profitable.

Instead of dominating the world business scene as they once did, the Americans find themselves challenged in Third World markets by equally clever foreign companies offering products as good as or better than those made in the U.S.A.

While the U.S. firms have been adjusting to more and stronger competition overseas, foreign corporations and individuals have been taking advantage of the change in economic fortunes to invest at record levels in the United States.

"What we are seeing today is not the Americanization of Europe but the growth of a Western style of business culture and taste which covers Western Europe, the United States, Canada much of Latin America and part of the Far East, including Japan," the cheif executive of a major U.S. manufacturer in Europe said.

The often-quoted warning about the U. S. commercial invasion of Europe was sounded in 1967 by the French journalist-politician Jean-Jacques Servan-Schreiber. He worte that by 1982 "it is quite possible that the world's greatest industrial power, just after the United States and Russia, will not be Europe but American industry in Europe."

Now it seems clear that U.S. business has not taken over Erope. But neither has it been turned out of the continent. Instead U.S. business has become an integral, essential element in the European economy, existing side by side with revised European enterprises.

The American presence in Europe is so immense -- and still so profitable -- that even five years of steady decline for the dollar, world recession and heightened competition have not diminished its dimensions.

What has happened in the last few years is that the strong, well-managed U.S. corporations have elected to put down deeper European roots while the weaker companies have pulled up stakes and gone home, or moved to easier markets.

"American investment is down in Europe, but then all investment is down," an American government expert in Brussels commented. "There is no trend toward disinvestment."

According to a U.S. diplomat in Paris, there is no strong trend for investment up or down. "The strong are getting stronger and the weak are getting out," he added.

The U.S. Commerce Department reported in August that in 1977 U.S. investment overseas totaled $148.8 billion, of which 40 percent -- more than $60 billion -- was in Western Europe. Sales by the American subsidiaries in Europe that year totaled more than $220 billion, 20 percent more than the total output of Italy, and about 11 percent of the entire European economy outside the Soviet Union.

U.S.-owned companies in 1977 were responsible for nearly 15 percent of all sales within the European Economic Community, where most of their factories and offices are located.

Despite the generally sluggish world economy, U.S. companies in 1977 increased their overseas investment by 9 percent. Foreigners raised their investment in the United States by 11 percent, bringing the total to $34 billion.

The U.S. presence in Europe is small compared with the size of U.S. domestic business. But many of the companies that have established themselves abroad are conspicuous major participants in the European economy and have done extremely well.

Last year, for instance, Ford Motor made twice as much money overseas as it did at home. Citicorp, the world's second-largest banking firm (after Bank of America) earned 90 percnt of its profits overseas.

A 1974 survey showed that such companies as National Cash Register, Coca-Cola, Gillette, Hoover, IBN, International Flavors, Pfizer and Sperry Rand made half or more of their profits abroad.

More recent surveys has shown that U.S. corporations have slowed their acquisition of affiliates overseas and that multinationals based in other countries are the acquisition leaders.

This reinforces the condlusin that the Americans who have survived the five-year European recession are in vesting in their better affiliates and selling off their losers.

The EEC, which surveyed multinationals in 1976, found that while Europens owned twice as many international companies and were expanding more ratidly, the U.S.-based companies were much more profitable.

EEC officials concluded from this that "American multinationals achieve a total turnover which is 43 percent higher than the turnover of approximately twice as many European firms."

To the casual observer, the U.S. presence in Europe seems greater than it actually is because of the conspicuous success of relatively few companies in some areas.

For example, U.S.-woned companies produce 30 percent of the automobiles sold in Europe and a large portion of the gasoline that fuels them, as well as two-thirds of the computers sold on the continent. Western European airlines, with few exceptions, fly U.S.-made aircraft. Yugoslavia, the most independent of the Communist nations, has in recent years bought for its national airline nothing but U.S. airliners.

Walking any major city street in Europe, visitors are assaulted by U.S. brand names -- Coca Cola, Marloboro, Levi Strauss, Wrangler, Kodak, Parker, Arrow. In some cities these traditional favorites have been joined by McDonald's, Burger Chef, Baskin-Robbins, Tandy and Mister Minit.

Americans dominate some fields. In advertising, for example, they own the top five agencies in Britain, four of the first fove in West Germany, three of five in France, Spain and the Netherlands. And they continue to be strong in accounting, management, consultancy and banking.

In supermarkets, which reflect dramatic changes in European eating habits, Kellogg's cerals have expanded rapidly, as have different brands of Florids orange juice, some of it shipped frozen from the United States and some of it packaged in Europe.

One export product, bourbon whisky, is finding acceptance in Europe for the first time, although it still lags far behind U.S. cigarettes as a symbol of the American's overseas presence. Most U.S. brands are manufactured locally. Some have been adopted as local.

"H. J. Heinz has been in England so long that people no longer think of it as an American company," a U.S. business expert in London commented. "Hoover is so entrenched that the brand name has become an English verb meaning "to vacuum.'"

On the other hand, in the broader range of industrial output, U.S. firms have been set back by strong European competition.

Ten years ago, U.S. companies were the largest in 11 of 12 major industries -- aerospace, automobiles, chemicals, electrical equipment, food machinery, stell, metal products, paper, oil, pharmaceuticals and textiles -- as well as in banking.

In 1976, Americans led in seven, West Germany in three, British and Japanese in one each and one was jointly owned by British and Dutch interests.

"The American presence in multinational business remains the largest single presence, even though it was overstated in the late 1960s, as a good deal of reserrch on non-U.S. business has now disclosed," according to Lawrence Franko, who participated in a massive survey of the subiject for the Harvard Business School. "Other countries' multinationals are expanding, not retreating."

The movement is illustrated by the automobile business, which in the last year has seen General Motors and Ford expand in Europe while Chrysler was selling out to Peugeot-Citroen.

The tire industry shows a similar pattern. In the last two years, Goodrich has given up manufacturing in Europe and Firestone has cut back, while Goodyear has continues to make good profits and is expanding its research center in Luxembourg.

In Belgium, site of many U.S. investments, J. C. Penney is a major retailer through its Sarma subsidiary. On the other hand, Sers Roebuck did not do well in Belgium and recently sold its retail outlets to a French conpany.

"Europe has become more and more competitive," a U.S. tire man commented. "In this industry, Europe's technology caught up and passed the American."

The big mover in the tire business has been Michelin of France, which decess to start manufacturing in the United States and to take a lucrative share on the market away from the huge U.S. rubber companies.

Some experts believe that the first multinational corporation was the Singer Sewing Machine Co., which opened a factory in Glasgow in 1867. At that time the old German Bayer chemical corporation had an analine plant in Albany, N.Y., and the Swedish Nobel company was making dynamite in Hamburg, Germany.

Westinghouse Airbrake came to Europe before World War I because it found a better reception for its products among nationalized railroads when it manufactured on the continent.

After World War I, Ford, General Motors, Procter & Gamble, Remington Rand and Hoover invaded the continent.

The big explosion came between 1946 and 1970, when the value of the American presence increased more than twenty-fold to $21.5 billion.

"By the early 1970s, the United States had become more of a foreign investor than an exporter of domestically manufactured goods," Prof. Robert Gilpin of Prinaceton University wrote in a recent book on multinational corporations.

The overseas expansion was fueled by great sales successes. From 1966 to 1976, annual sales went from $40 billion to $207 billion, an increase of 500 percent at a time when the European economy grew by about 300 percent.

The tide started to turn in 1975. In 1973 and 1974 U.S. affiliates saw their sales go up 33 percent and 30 percent, but in 1975 and 1976 the gains were relatively modest at 12 percent and 11 percent.

While sales fell and competition became sharper, operating costs continued to rise. European labor, which had worked longer hours for less money than U.S. labor, used the period of steady prosperity to bid wages and fringe benefits up at world-record rates.

A Citibank survey found that between 1970 and 1977, in terms of local currencies, real labor costs (after eliminating the effects of inflation) went up the most in Italy (70 percent), followed by Belgium (61 percent), the Netherlands, West Germany and Sweden (all 48 percent) U.S. labor costs in the same period rose 12 percent.

Citibank found the highest wages in Sweden -- $10.30 an hour compared with the U.S. average of $8.71.

Belgium and the Netherlands were also above the U.S. average. Britain, at $3.62, had the lowest of the 12 major economies, including Japan, that were examined.

As wages rose sharply, governments supported them by enacting a complex, expensive system of social benefits.

Also, the fall of the dollar has made if difficult for companies that rely on domestic sales for most of their profits to invest in strong-currency countries such as Switzerland, West Germany, Belgium and the Netherlands. American executives are not eager to move overseas unless their companies guarantee them protection from dollar erosion and pay them substantial cost-of-living differentials. Some of the most successful U.S. companies in Europe, such as IBM and Ford, have trained local executives to take the place of U.S. citiaens.

As they look at the new investment possibilities, Americans in Europe carefully examine the economic and political factors.

For years, Britain was the most popular site for U.S. companies because of the common language and easy market entry. Then as the European Economic Community developed, at first without Britain, the Americans moved into the Benelux countries and West Germany because of their central location and strong industrial traditions.

Now France is getting attention because the French government clearly encourages foreign investment. Ireland gets attention because of its low labor costs, but its location poses a delivery problem. Opain is also attractive, because costs are relatively low and the cuntry is expected to enter the EEC within the next five years.

"On paper, Britain is clearly the best plave to make a new investment," an American executive based in Germany said. "As a practical matter, however, given the problems with labor unions in Britain, right now I would choose France for a new plant."

With the dollar so cheap compared with European currencies, and the European market about as large and rich as the American, many U.S. companies are discovering their potential as exporters.

U.S. automakers, despite big investments in Europe, are setting an example that has Europeans worried and is stimulating some consolidation among Continental automakers.

"There is no product being made by an American campany in Germany today that couldn't be made at a lower price in the United States and sold in export," a U.S. trade official said in Bonn.