Abstract:
Globalisation of the marketplace has led to internationalisation becoming increasingly vital for
companies’ survival. This rapid increase in the level of internationalisation has seen many
retailers look for expansion opportunities outside their borders. South Africa is a very significant
market in Africa for multinational retailers and has seen many of them expand and explore
opportunities there. This growth in multinational retailers entering and operating in the South
African market has created challenges for SMMEs who have difficulties competing with larger
logistics third party providers in the local market due to many multinational retailers outsourcing
their logistics capabilities to global and larger third party logistics providers instead of local
SMMEs. This research study seeks to understand the drivers and barriers of logistics
capabilities outsourcing to South African SMMEs by multinational retailers during their
internationalisation. SMMEs are the backbone of many economies, particularly emerging market
economies such as South Africa. Throughout the globe, SMMEs are the largest business group
and create more jobs than any other business group thus indicating their importance and
relevance which justifies the need for further research. This research study followed a
qualitative method which was underlined by an interpretive and inductive research approach to
gather in depth insights from the participants. This provided an analytical lens to explore what
influences the decisions to outsource logistics capabilities by multinational retailers with the aim
to reveal how SMMEs can participate more in the supply chains of internationalising
multinational retailers. Data analysis was done from the transcripts which allowed the
researcher to develop codes which were grouped into categories/themes that related to the
research questions. Available academic literature was compared and constructed with the
findings revealing that: (i) the internationalisation process of multinational retailers in South
Africa has two stages, which are the early and late stages, (ii) , (iii) selection processes and the
ability to create partnerships with local providers have a significant influence on multinational
retailers’ decision to outsource to local SMMEs, (iv) in the early stages of the internationalisation
process, due diligence has significant influence on multinational retailers’ decision to outsource
to local third party logistics providers, (v) standardisation of processes plays a significant role in
influencing multinational retailers’ decisions on outsourcing in the late stages of the
internationalisation process.
