Entry Strategies Adopted by Kenyan Insurance Companies in Expanding to Comesa Region

Abstract

International expansion strategy is becoming the norm in many firms' corporate strategy due to globalization pressures and increased regional integration among emerging regional blocs in the Africa continent. Increase of business opportunities among regional member states due to relaxation of trade barriers and more investments especially in the mining, agricultural and industrial sectors have increased investing firms' risk profile that need to be insured. The purpose of this study was to identify entry strategies adopted by Kenyan insurance firms in the expansion process within COMESA region, the influence behind choice of strategy and challenges experienced in their internationalization process. The researcher undertook a study of 11 insurance firms using a census survey method. Data was collected with the aid of a questionnaire to respondents, analyzed using descriptive statistics and presented using tables. The study findings reveal that many Kenyan Insurance firms prefer entry strategies that enable them retain ownership and control of the expansion process of which the predominantly used Greenfield strategy favors. The study findings also reveal more than one entry strategy can be used by a firm depending on firm specific competencies and new unpredictable opportunities encountered during internationalization process. The most challenging factors in their expansion process were the political environment and country regulations firms encounter across the region. Insurance firm associations, government agencies and other policy makers need to formulate favorable policies and oversight regulations to the insurance sector. Kenyan insurance firms should be prepared to adopt innovative entry strategies to keep up with ever changing external environment dynamics, conduct continuous market research to create products that fit varied consumer needs across the region and replicate home competencies in foreign markets.