Emerging markets multinational enterprises : internationalisation of South African chemical companies into the rest of Africa

Abstract

The internationalisation of multinationals from emerging markets has increased remarkably over the last two decades which has caused a fundamental shift in the global economy whereby more focus is now being directed to the foreign expansion strategies pursued by these firms. There is a growing debate amongst IB scholars about the applicability of existing theories and frameworks in explaining the rise of emerging market multinationals. The objective of this research was to explore internationalisation strategies of multinationals from emerging countries to provide more insights and understanding into the foreign expansion approaches employed by these multinational companies (MNCs) when investing in other emerging economies with the focus on foreign expansion of South African chemical companies into the rest of Africa. A qualitative exploratory study was followed where 15 semi-structured interviews were conducted with senior managers and executives across four South African chemical companies. The findings indicate how the rising competition in the domestic market due to the introduction of international competition and the increase of local market competitors led to the successful internationalisation of South African companies from the chemical. The study also shows that chemical companies from South Africa adopt a gradual internationalisation approach when expanding into the rest of Africa and these companies based their foreign expansion on firm-specific advantages that were shaped by the unique history South Africa.