Effect of Entry Mode Strategies on the Performance of Shipping Firms in Kenya

Abstract

Entry mode strategies are important as they affect the performance of shipping firms in Kenya. The topic of study was the effect of entry mode strategies on the performance of shipping firms in Kenya. The objective of study was to establish the effect of entry mode strategies on performance of shipping firms in Kenya. The research design adopted in this study was a cross sectional survey. The population of interest in this study comprised of 42 shipping firms in Kenya. The study used Primary data. The data was collected using semi structured questionnaires that were personally administered to the logistics and operations managers in all 42 shipping firms in Kenya. Descriptive statistics method was used in the study and analyzed using Statistical Package for Social Sciences (SPSS). Inferential statistics including regression and correlation analysis were also carried out to link the independent variables to the dependent variable by use of a regression model. The study found out that the legal framework for trade and investment, trade and investment incentives in Kenya, political factors such as political risk, stability and predictability, foreign trade and investment regulations in Kenya, the political economic policies of the host country, and the prospects of economic growth. Other methods of analysis in addition to inferential and descriptive analysis could be done to compare the outcomes. The recent economic performance indicators and GDP/GNP per capita income over the last 2 years, the socio-cultural factors such as social institutions, religion, material culture, norms and values are environmental factors that have been found to affect companies’ entry strategies. The study also found out that most of the shipping companies in Kenya use exporting as the main entry mode strategy, in addition to turnkey projects, licensing, franchising, joint ventures, and wholly owned subsidiaries. The study also concluded that there is a significant relationship among the independent variables (Exporting entry mode, Licensing entry mode, Turnkey operations entry mode, Franchising entry mode, Joint ventures entry mode and wholly owned subsidiaries) and the performance of shipping companies in Kenya. The researcher had time constraints being an employee and an MBA student at the same time. Balancing between work and the research produced limitations which spilled over to the research. Suggestions for further research is recommended in other sectors or industry. Carrying out similar research on firm performance in other countries of Africa where shipping industry is organized and developed, is recommended to improve performance of shipping firms in Kenya.