Emerging markets multinational enterprises : South African retail giants moving into Africa

Abstract

The global strategies of the three South African retail giants are examined with a view to understand what factors motivate South African multinational enterprises to move into Africa, as well as what motivates their particular choice of countries, and how the capabilities and resources are deployed and managed in their foreign operations, so as to remain competitive in both local and foreign markets. The South African retail giant geographic expansion is a way to penetrate new markets, explore new opportunities and deliver the growth they seek on the journey to high performance. Their choice of countries is determined by various factors that contribute to the competitive nature of a country, namely: national values and cultures; macro and micro economic environment; political stability; institutions, and history. As these emerging market multinational enterprises cannot depend on countryspecific advantages, the contenders accelerate their development of firm-specific advantages at a rapid rate. South African companies have developed expertise for trading in Africa as they are more familiar with the physical, regulatory and social terrain than businesses from other parts of the world. The market, the culture and realities of infrastructure, poverty, lack of skills, as well as the technology in their non-South African operations are not a shock to the South African companies. The business strategies will, therefore, not entirely be the same as those of the multinationals from the developed world.