Foreign market entry strategies and challenges faced by South African Breweries Ltd in the Kenyan market

Abstract

Strategy is the game plan to succeed and is vital in ensuring success in all organizations. Entry strategies are plans put in place in entering and tapping new markets. A strategy can only deliver its purpose if it is well formulated and implemented. Foreign markets are those outside the country boundaries that a firm operates in; markets in other countries. The purpose of this study was to establish the foreign market entry strategies and challenges encountered by South African Breweries Ltd in entering the Kenyan market. The study had two objectives to be analyzed. First objective was to establish the entry strategies used by SABMiller into the Kenyan market. The second objective was to establish the challenges faced while entering the Kenyan market. Data for both objectives was collected by a way of an interview guide and results analyzed using content analysis, which summarized the essential features and relationships of data In order to generalize and determine patterns of behavior and particular outcomes. These were coded to enable the responses be grouped into various categories. The findings indicated that the success of foreign market entry is influenced by strong understanding of the markets operations and regulations, customer loyalty and defense strategies put in place by incumbent firms. The greatest challenges faced by SABMiller in entering the Kenyan market were; regulations by the Alcohol Control Act of 2010, harsh competitive environment as experienced through aggressive counter attack reactions of the incumbent firms who already control giant portion of the market share.

The recommendation of the research is that a further study be conductedto establish the effects of the foreign market entry strategies adopted and the success of reaction of incumbent firms in their defense.