Abstract:
Throughout the years, different theories and models have been developed regarding
multi-national enterprises' (MNEs') entry into foreign markets. One such model is the
Organisational Model, identifying three different types of enterprise, each selecting a
different mode of market entry during foreign market expansion. These are: massproduction
enterprises, disaggregate-production enterprises and project-based
enterprises. This model was based on studies focusing mainly on the US, Europe
and Asia. Research indicates, however, that MNEs increasingly identify sub-Saharan
Africa (SSA) as a region for possible expansion. In view of persistent risk within the
SSA region, this study's focus is on determining which entry modes MNEs use when
entering a perceived high-risk market in SSA.
This research study focused on MNEs that have expanded or are currently
expanding into a perceived high-risk country in SSA. A qualitative research design
was selected, applying an in-depth case study analysis to six different MNEs two MNEs representing each type of enterprise as categorised by the Organisational
Model. Semi-structured personal interviews were conducted with each participant.
Each interview focused on elements relating to the MNE's perception of, and
approach to selecting entry mode into, high-risk markets.
Findings predominantly did not find support for the Organisational Model, indicating
that MNEs entering perceived high-risk markets in SSA preferred different entry
mode strategies and approached risk consideration differently. Some findings did
confirm the literature, by indicating that MNEs consider country risk when entering a
foreign market in SSA.
