Foreign Market Entry Modes of South African Firms
Keywords:
Internationalisation, Market entry, market selection, Emerging market firmsAbstract
This paper seeks to gain insight into the foreign market entry modes undertaken by South African firms during internationalisation. Extant literature on foreign market entry modes has largely concentrated on firms from developed economies and on those from China and India. Very limited attention has been given in the literature to emerging market firms from Africa, and South Africa, that engage in internationalisation. No study has focused on the type of foreign market entry modes that South African firms favour and choose when they undertake internationalisation. With this in mind an exploratory qualitative study was undertaken. Semi-structured interviews were conducted with 43 senior managers at seven major South African firms. Results indicate that South African firms prefer entry modes that allow for full ownership and maximum control over their international subsidiaries operations and strategy. In contrast, licensing and greenfield ventures are the least preferred entry modes for South African firms. The value of this study is that it addresses gaps in literature on South African firms and foreign market entry modes during internationalisation. The paper is of value to managers and policymakers regarding the implications of choosing certain foreign market entry modes.
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