Critical success factors for multinational enterprises operating in the fast moving consumer goods industry in Nigeria

Abstract

Due to market saturation and the attractive opportunities offered by globalisation, increasing numbers of multinational enterprises (MNEs) are expanding into Africa. Nigeria, in particular, is perceived as one of the most opportune markets in the story of “Africa rising” and is home to Africa’s biggest economy and population. Accordingly, several MNEs have attempted to gain market share in the fast moving consumer goods (FMCG) industry in Nigeria. Yet, it is evident that the external environment is unstable and challenging. Although there are laws and policies in place to encourage foreign investment, the external environment of Nigeria is not always conducive to international business operations. MNEs face challenges of corruption and political uncertainty, the liability of foreignness, challenges from local competition, and infrastructure deficiencies. This has led to the failure of several MNEs; however, others have managed to thrive, even in the current economic recession. From this, the primary research question was derived as; what are the CSFs for MNEs operating in the fast moving consumer goods industry in Nigeria? Upon further investigation, there has been no academic research conducted on the CSFs for MNEs operating in the FMCG industry in Nigeria. Therefore, this dissertation sought to vaddress this knowledge gap by asking two secondary research questions: what are the strategic CSFs for MNEs operating in the FMCG industry in Nigeria and what are the operational CSFs for MNEs operating in the FMCG industry in Nigeria? A generic qualitative research approach was employed and thirteen semi-structured interviews with senior managers from MNEs operating in Nigeria were conducted. The unit of analysis was MNEs operating in the FMCG industry in Nigeria and included retail and manufacturing MNEs. Based on the interviews, nineteen strategic CSFs and six operational CSFs were identified. From these, it was evident that understanding the external environment, understanding and meeting the needs of the consumers, and building strong relationships were the most significant SCSFs. Whereas, producing quality products, ensuring efficient distribution and back-up supplies of water and power were vital OCSFs. This study brought to light some of the harsh realities of operating in Nigeria as well as the potential to be successful. Using the existing literature and the advice provided by the participants, this study has numerous implications for future and current managers, as well as the Nigerian government and academics. This study contributes to the body of knowledge about CSFs and sheds light on a topic not previously written about.