Factors considered in adopting expansion strategies by Technobrain limited Kenya

Abstract

A major issue in international business is the appropriate choice of entry mode into foreign markets. There are many ways of expanding a business. Expansion strategies fall in the corporate level strategy as they relate to choices of product and markets for an organisation to enter or exit. A firm will not select all of the possible expansion strategies but will choose one or a combination of a few strategies based on various factors that are either internal or external. The objective of this study was to establish the factors that have been considered in adopting expansion strategies by Technobrain Kenya. The study was a case study as it focused on one firm, Technobrain Kenya, where data was collected through interviewing the Chief Executive and the Regional Director. Interviews allow people to convey to others a situation from their own perspective and in their own words. The analysis of the data was done through content analysis. Based on the findings it was clear that there were various factors that affected the choice of the expansion strategies adopted by Technobrain. Technobrain had expanded through market development, mergers and acquisitions, licensing, partnering and product development. These expansion strategies were selected based on both internal and external factors as noted by the respondents. The internal factors considered were either company factors or product factors while the external factors were either market factors or marketing factors. Company factors included market knowledge, overall goals of the firm, internal barriers and motives of the company to expand. The only product factor that affected the choice of expansion strategy based on this study was the nature of the product or offering. Market factors that were considered included similarity of the markets, market life cycle, market growth rate, and level of competition within the target markets. The marketing factor that was of influence in the choice of expansion strategy was communication strategy that was to be adopted in the markets. The study concluded that the careful consideration of these factors in selection of expansion strategies had played a great role in the growth of the firm over the last 17 years that has seen Technobrain Kenya grow to serve 22 countries and provide end to end IT solutions. Due to the fact the study focused on one firm, there is a risk of generalization. However the study also noted that a lot can be learnt from a particular case. The study recommended that organisations should carefully consider internal and external factors when making a decision on which expansion strategies to adopt as this will provide them with clear direction as they expand based on their internal capacity and the industry that they operate in. The study suggested that further research can be done on other companies especially in the IT industry in Africa as well as studies on the expansion strategies adopted by other African companies into Africa and beyond irrespective of the industry and making comparison to the IT industry.