This research aim was to investigate the motivation and patterns of SSA firms’ internationalisation studying firms from different sector of the economy. The findings suggest that various factors were interplay in the motivation and patterns of Nigerian firms’ international rather than a single factor. The study draw on the internationalisation theory (Uppsala Model) and OLI model as the theoretical positioning for the study (Johanson and Vahlne, 1977 and 1990; Dunning, 1988). The finding reveals that case firms’ internationalisation process was gradual, consistent with the Uppsala model, but there also exists contradiction in some aspect of the findings. For example ADG international experience started as an importer rather as an export …show more content…
Again the firms ownership advantage also play more significant role in the foreign expansion rather the psychic distance and the need to invest in a close proximity market was a strategic intent of the firm to expand in the region as a way to take advantage of the firm specific ownership advantage, regional growing market and regional economic integration. Though ADG and DCW could classify as psychic distance investment but BDM and CCR has invested initially at the Francophone countries not consistent with psychic distance. The insight from the study therefore indicates that physical market proximity had played a role in the market entering of Nigerian firms rather that psychic distance. While previous studies has shown that Nigerian bank was motivated by the recapitalisation and consolidation in the 2004 and 2005 as well the need to follow their customers to foreign market were the motivation behind Nigerian banks internationalisation (Boojihawon & Acholonu, 2013; Amungo in Adeleye et al 2016 p:69-98). This study emphasized that Nigerian firms’ motivation for foreign expansion are driven by vary factors that both internal and external to the firms. The external sources include the institution factors such as the government policies, home factors such as the large market and population, economic growth, profitability and host countries factors as illustrated in …show more content…
(2010), as co-creator of the economic system and the firm strategy the organisation adopt will have a significant impact on the on the economic outcome. This finding in this study indicates that favourable government policies has enhanced the emergent of high profile Nigerian which the outcome of the firms’ internationalisation has been positive to (a) the firms, ADG for example from the initial foreign subsidiaries in 2011 have established subsidiaries and production factories across 14 countries. In terms of financial performance and returns, the foreign operations are also showing increased year on year revenue. These have also been the case for all the case firms embarking on further expansion from the initial market entry. ADG revenue in 2015 increases year on year by 26%, this is due to an increase in the sales volume of 35% in the foreign market. Even though most of the earnings are still from the domestic market, but the foreign subsidiaries have begun to witness an upturn in terms of sales and revenue (ADG annual report 2014 and 2015). Also, the year on year production capacity has also surged with about 87% in the same period. While the revenue from domestic market only increased by 4.75% in 2015 from 2014, the West and Central Africa revenue increased by 582% and South and East Africa with 340% in the same period (ADG annual report 2014 and 2015). (2) to the government and country as these firms have contributed to
The rise in globalization over the last few decades has helped facilitate and encourage corporations to expand into international markets. This paper will review the five common international expansion entry modes, and the pros and cons of each method. Finally, my employer is in the technology industry and I will breakdown and recommend which entry mode would work best for international expansion.
A Multinational Corporation (MNC) can be defined as “a single entity that controls and manages group of goal-disparate and geographically dispersed productive subsidiaries” (Triandis and Wasti, 2008, p. 2). Multinational corporations are entities that make Foreign Direct Investment (FDI) and produce added value in countries other than the country in which they are headquartered. One of the key objectives of the MNC is to obtain capital where is it cheapest and to invest FDI and undertake production in areas that yield the highest rates of return (De Beule and Van Den Bulcke, 2009). However, many theories have been advanced to account for the decision-making process that MNCs undertake in relation to FDI. The purpose of this paper is to explain the two main theories – internalization theory and OLI eclectic paradigm theory – and to critique these in relation to some of the other conceptual models that have been advocated.
This essay will analyse Tata Motor Company and its motive for internationalization and include the background information on the company then it will go on to consider the definition of theories as well as applying them to the Company. The paper will focus on theories which are Dunning Eclectic paradigm; Learning Theories and Porter Diamond .Tata Motors Company is one of the largest automobile companies in India with a 42 billion organization. Further the product range of automobiles, information and technology is varied and covers almost all the segment of the car market as per the Tata Motors (2014).The research shows (Business Leadership Management (BLM), 2013) the motive for internationalization is due to its acquisition and its ease the
Firms exist with the purpose of create and deliver economic value (Bensaco et al 2010, p. 365); therefore, business that create better economic value than its competitors will attain an advantage position in market place. Companies might try to improve its sales (profit) through domestic expansion, product diversification or by internationalisation; this report will focus on the reasons of espressamente Illy to expand internationally; additionally, its sources of competitive advantage and, the analysis of three markets in which company want to participate.
When it comes to doing business internationally the decision making is more complex. There are many interactions between each country that need to be addressed. In order for a business to be successful in the international market they need to examine and analyze all the facets of their company. They need
We all know that comapanies go international for many reasons but always typical goal is comapny growth and expantions. When a company searches for new interesting markets abroad and also hires international employees, using well designed international strategy can for sure expand business on foreign markets. Internalization strategy of companies is now possible because is no problem to manage business by phone or e-mail. There is also no problem to travel by plane from Europe to Asia in few hours what was not possible in past.
Why would a company go international? There are many reasons why companies would go international, but generally a company goes international so they can seek opportunities in domestic markets, or they seek solutions to problems that cannot be solved through domestic operations. There are many profitable possibilities by going internationally and these include greater profit potential, offers new locations to sell products, it may provide better access to needed raw materials, it may access to financial resources from many nations, and lastly it may allow labour-intensive activities to locate in countries with lower labour costs. For a small business to become an international business they must use five guidelines the first is global sourcing, exporting and importing, licensing and franchising, joint ventures, and wholly owned subsidiaries. The first two are market entry strategies and the remaining are direct investment strategies.
The study gathered time series and annual data for the period covering 1987 to 2009. The methodology comprises econometric techniques such as; Augmented Dickey-Fuller (ADF) Unit Root test, Ordinary Least Square (OLS) method, Error Correction Mechanism (ECM) and Johansen Co-integration test. The key findings emerging from this study indicates that financial liberalization in Nigeria has been significant on her economic growth. Hence, it justifies the assertion of Mckinnon (1973) and Shaw (1973) on financial liberalization. The study also concludes that financial liberalization has not refrained investors from seeking funds from banks at the deregulated lending rate. Instead, the lending rate allowed for the effective and efficient intermediation of funds to the users of funds to participate in productive activities that add to economic growth. Exchange rate determination by international market forces of demand and supply has not been detrimental to the economy of Nigeria but rather it has been significant to boost economic growth. The macroeconomic instability resulted from financial liberalization does not have a negative influence on the overall output of the economy. So, it can be observed that macroeconomic instability cannot be attributed to financial liberalization. Even if financial development is significant for economic growth, financial liberalization has not really increased the depth of the financial system which would consequentially impact on the economy positively. The degree of openness is an important aspect of globalization which indicates that the trade relation of Nigeria with the rest of the world has contributed significantly towards economic
By study their viewpoint of business, this can give value to international business. Every business as part of its economic objectives always wants to grow. Domestic market is likely to saturate after a limit and ...
Oesterie, M. J., Richta, H. N., & Fisch, J. H. (2012). The influence of ownership structure on internationalization. International Business Review, 22(1), 187-201.
What is culture? Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the universe, and material objects and possessions acquired by a group of people in the course of generations through individual and group striving
...ll as private sectors have gone international with new ventures outside the country. These companies are generating revenue, though modest compared to their overall sales revenue, by deputing their expert personnel outside.
The progression and evolution of international business has played an integral role in the overall development and progress of the world economy, culture, and politics. The multinational corporation was an essential part of this process and has roots as far back as the 15th and 16th centuries in Western Europe, specifically in the nations of England and Holland, during a period known as mercantilism. This was a time of unprecedented global exploration, colonization, and other imperialist ventures. Organizations such as the British East India Trading Company, promoted both global trade and the acquisition of natural resources, primarily for their home countries in areas including Africa, East Asia, and the Americas. Global trade was the primary factor in the growth of the world economy during this time. However the modern MNC, as it is known today, did not appear until the 19th century. These new entities provided a new level of inter-firm connectedness, a wider division of labor, and a higher level of product integration across countries in which MNCs are growing. Studies have shown that modern MNCs are characterized by a high degree of complexity, and have not followed a linear pattern in their development. In addition, it is crucial to understand the geographical context in which these MNCs were founded. This paper will analyze the development of the multinational corporation (MNC) from the 1870s to the modern day and examine it what ways, and to what degree it has changed over time.
International Marketing, at its simplest level, involves the firm making one or more marketing mix decisions across national boundaries (Jobber, 2010). At its most complex level, it involves the firm establishing manufacturing facilities overseas and coordinating marketing strategies across the globe (Jobber, 2010). There are various reasons for going global, some of which are: to find opportunities beyond saturated domestic markets; to seek expansion beyond small, low growth domestic markets; to meet customers’ expectations; to respond to the competitive forces for example the desire to attack an overseas competitor; to act on cost factor for example to gain economies of scale in order to achieve a balanced growth portfolio. The methods of market entry that could be used are indirect exporting (for example, using domestic –based export agents), direct exporting (for example, foreign –based distributors), licensing, joint venture and direct investment. I found this par...
NIGERIA AND THE PATH OF ECONOMIC PROSPERITY. Economic development is a term that economists, politicians, and others have used frequently since the 20th Century. The concept, however, has been in existence in the West for centuries. The term refers to economic growth accompanied by changes in output distribution and economic structure. It is concerned with quality improvements, the introduction of new goods and services, risk mitigation and the dynamics of innovation and entrepreneurship.