Entry mode selection of multinational enterprises entering high risk countries in sub-Saharan Africa
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University of Pretoria
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.
Description
Dissertation (MCom)--University of Pretoria, 2016.
Keywords
UCTD, Organisational Model, Mass-production enterprises, Project-based enterprises, International market selection
Sustainable Development Goals
Citation
Van Coller, S 2016, Entry mode selection of multinational enterprises entering high risk countries in sub-Saharan Africa, MCom Dissertation, University of Pretoria, Pretoria, viewed yymmdd <http://hdl.handle.net/2263/60522>