- •Acknowledgement
- •Abstract
- •International Market Entry Strategies
- •Regulatory Environment
- •Challenges of International Expansion
- •Purpose of the Study
- •Research Objectives
- •Research Questions
- •Justification for the Study
- •Scope of the Study
- •Delimitations
- •Chapter 2: Literature Review
- •Introduction
- •International Expansion
- •Internationalization/Transaction-Cost Theory
- •Eclectic Theory
- •Resource-Based Theory
- •Uppsala Model
- •International Market Entry Strategies
- •Exporting
- •Licensing
- •Franchising
- •Joint-Ventures/Strategic Alliances
- •Acquisitions
- •Wholly-Owned Subsidiaries/Greenfield Operations
- •Figure 2‑1: Selecting Market Entry Mode: Risk Profiling
- •Regulatory Environment
- •Challenges of International Expansion
- •Research Gaps
- •Chapter 3: Research Methodology
- •Introduction
- •Research Methodology
- •Research Methods
- •Research Approach
- •Research Design
- •Choice of Companies
- •International Expansion
- •Host Country Overview: Kenya
- •Company Overview: eabl
- •Table 4‑1: Kenyan Beer Market
- •Source: Irungu (2012)
- •Market Entry Strategy
- •Regulatory Environment
- •Market Performance
- •Market Challenges
- •Case Study: sab Miller (Colombia – Grupo Bavaria)
- •Company Background: sab Miller
- •International Expansion
- •Host Country Overview: Colombia
- •Company Overview: Grupo Bavaria
- •Market Entry Strategy
- •Regulatory Environment
- •Market Performance
- •Market Challenges
- •Chapter 5: Discussion of Findings
- •Introduction
- •Case Analysis: Diageo (Kenya)
- •Case Analysis: sab Miller (Colombia)
- •Cross-Case Analysis
- •Chapter 6: Summary, Conclusions, and Recommendations
- •Introduction
- •Summary
- •Conclusions
- •Recommendations
- •Future Research
- •Chapter 7: References
- •Chapter 8: Appendices Table 8‑2: Common Size Analysis: Diageo and sab Miller
- •Source: Diageo (2013) and sab Miller (2013a)
- •Table 8‑3: Comparison of Market Entry Modes and Performance
- •Source: Diageo (2013a), eabl (2013), and sab Miller (2013)
International Market Entry Strategies
A firm that has already considered international market expansion as part of its corporate strategy has to select the most appropriate market entry strategy. An international strategy follows the following outcomes; identification of international opportunities, developing international strategies, and selecting the entry mode (Hitt, Ireland, & Hoskisson, 2011).
The choice of entry mode is usually dependent on the internationalization strategy that is adopted. Resources and capabilities also determine the ability to leverage on one mode over another. An organization has understand its current positioning, the point of focus (future growth strategies), and how it intends to achieve them (Thomson & Martin, 2005).
This focus applies to execution of corporate strategy and can also be extended to internationalization. According to Ghauri & Cateora (2010), the main market entry modes are; exporting, piggybacking, licensing, franchising, joint-ventures, consortia, manufacturing/wholly-owned subsidiary, and countertrade (reverse manufacturing).
Some organizations progress from exporting and expand their market presence through licensing and joint-venture initiatives. Cost implications, local knowledge, regulatory environment, and technology transfer dictate the most appropriate market entry strategy. The openness and competitiveness of the industry is another vital factor.
Regulatory Environment
International market entry is mainly influenced by the efficiency of the regulatory environment. The ability of an organization to gain competitiveness in external markets is dependent on government attitudes towards FDI (Foreign Direct Investment). There are limitations depending on sectoral weighting by the state.
According to Porter (1998), national advantage is determined by; firm strategy, structure, and rivalry, factors of production, demand conditions, and related and supporting industries. These dimensions are vital in determining country attractiveness and competitive environment that is guided by existing legislations.
Essentially, different countries promote certain sectors by offering tax incentives while protecting others with ownership caveats. The ability to access capital, skilled workforce, adequate markets, and suitable infrastructure is defined by government policies towards development and FDI as part of long-term country growth strategy.
Increasingly, governments are focusing on opening up most of their domestic sectors to international businesses. This can be partly attributed to progressive governments and the rules enforced by joining trading blocs such as NAFTA, WTO, EU, and ASEAN. In effect, they have tempered the domestic regulations to be compatible with international ones.
Harmonization of tax and business practices as part of the regulations governing the trading blocs has hastened the opening up of international markets. This is evident in emerging markets like China which have become investment magnets. The effectiveness of the regulatory environment is critical in encouraging and sustaining internationalization.