Entry strategies used by atlas Copco Eastern Africa ltd to enter into the East African market

Abstract

This research project was a case study which sought to establish the entry strategies used by Atlas Copco Eastern Africa Ltd (ACEA) a Multinational Corporation, to enter into the East African market. ACEA operates in 13 countries and its main business is supply of equipment, installation and aftermarket support. It is structured in four main divisions which include Compressor Technique, Construction Technique, Mining and Rock Excavation Technique and Industrial Technique. The study used primary data which was collected using an interview guide that had open-ended questions. The data was obtained from the two top managers of ACEA who are in charge of running the business in the region and also in charge of making and implementing key decisions in the operation of the company. The interview guide was edited for completeness and consistency. Content analysis was then used to analyse the respondents’ view on entry strategies used by the company to enter into East African market and the findings were presented in a continuous prose. The study found out that each division has a key role to play in the overall strategy of market entry and sustenance in the region. It was found out that divisions used different entry strategies to serve the region some overlapping each other. The research found that the company has used entry strategies like Foreign Direct Investments in form of wholly owned subsidiaries in countries like Kenya and Tanzania; exporting in countries such as Somalia, Burundi, Rwanda; Joint Ventures in several countries through strategic partnerships in Ethiopia, South Sudan, Madagascar, Uganda, Eritrea and Sudan. The study concludes that ACEA has used more than one entry strategies depending on the intentions of the company towards aspired control, challenges offered by that market as well as the risks involved in operating in that market.