Determinants of foreign entry strategies: a case of Kenyan firms ventirung into Southern Sudan

Abstract

This study argues that the emerging economy of Southern Sudan offers Kenyan firms many opportunities for trade and investment while presenting real challenges in the foreign business environment. The choice of a particular foreign entry strategy is very significant for carrying on business across borders and bad choices may result in eventual business failure. The study sets out to examine factors that determine the choice of entry strategies and their significance to Kenyan firms venturing into Southern Sudan. Chapter 2 reviews concepts and theories on foreign entry strategies in existing literature. It reviews characteristics of the various foreign entry strategies and explores the significance of the foreign business environment and the firm's internal environment while selecting the optimal entry strategy. In chapter 3, the design and methodology for the study is established. A primary research method is selecled. CEOs, Regional integration Managers, Business Development Managers and Marketing Managers in Kenyan firms venturing into Southern Sudan are deemed to have significant input to the choice of entry strategy. A sample" of 36 respondeajs is randomly selected among these and targeted for a self administered survey, In chapter 4, data collected is reviewed, verified and analyzed. 18 executives offer valid responses to the study which are analyzed to establish trends and patterns of significance or indifference to factors in the foreign business environment and firm specific factors. Correlations are established between factors in the decision making context and the levels of significance to the firm specific factors and others in the foreign business environment. ( ix Chapter 5 presents conclusions and recommendations from the findings in the study. The study confirms generalizations found in existing literature that the decision on foreign entry strategies is a function of parameters in the foreign business environment, firm specific parameters and factors in the decision making context. In addition, the study finds the following trends among executives in Kenyan firms venturing into Southern Sudan. A significant proportion (41%) of the executives is indifferent to the socio-cultural factors in Southern Sudan in selecting their entry strategy Indifference to the political-legal environment while selecting the foreign entry strategy increases as the age of the executive reduces A significant proportion (50%) of the executives is indifferent to their pursuit for location economies in choosing their foreign entry strategy A large majority of the executives (66.7%) is indifferent to their firms' internal cultural diversity while selecting their entry strategy With scarce information and little experience among firms on doing business in Southern Sudan, the study recommends that Kenyan firms utilize existing knowledge in the domain of international business, especially concepts on " emerging economies while venturing into Souther-n .Sudan.