Abstract:
Business relationships have been studied as a driver for firm competitiveness
through relationship marketing, but not as a strategic advantage when entering
an economy. Prior research has identified several dimensions of market entry
drivers from host country, home-location, sector-related as well as firm-level
perspectives. This research study takes a managerial perspective and argues
that relationships and their benefits are pivotal during market entry strategy
formulation. It asserts that firms should alter their market entry strategies,
specifically for emerging economies, taking into consideration the net gains of a
client.
This study used a mixed method design involving exploratory research and
explanatory research. Semi-structured face-to-face interviews were conducted
to make sense of the use of relationship benefits when entering the African
market. An online self-administrative questionnaire was also used to gather
further insights of attributes that individuals use when entering the East African
Community (EAC) market.
The findings revealed that institutions do stipulate the rules of the game in an
emerging market. Although the research results were not conclusive regarding
a wholly owned subsidiary being favoured for entry into an emerging market
with stronger institutions, it was conclusive in indicating that firms still favour
joint ventures into the EAC. Relationship building is time consuming and many
who are given the opportunity to interact with clients still do not grasp the merits
of building these relationships. This could be the reason why in general
individuals still rely on social benefits like friendships; interactions beyond
business relationships; sharing of information and knowledge with the client as
opposed to psychological benefits.
