Internationalization Process Adopted by Bidco Oil Refineries in Penetrating the East African Market

Abstract

With increased globalization and the dynamic nature of the business environment companies are facing increased pressure in the domestic market. There is also an increasing desire from companies to exploit available market opportunities. Companies are thus keen to explore new market and reap profits from international markets. Companies that want to explore new markets and expand internationally must follow a process. The objective of this study is to understand the internationalization process of a manufacturing company. For the purposes of this study Bidco Oil Refineries has been chosen as the case study to understand the factors the company encountered as it expanded in the East African market. The study adopted a case study design where both primary and secondary data sources were considered. Primary data was collected using an interview guide as the key instrument. The research targeted six senior managers as head of departments in the company. Secondary data was collected through internal documents, strategy papers, chief executive officers speeches and internal performance reports. The study revealed that there are several factors to be considered by any manufacturing company expanding into the East African region. The study revealed that the company was consistent in its internationalization process adopting the same strategy for both the expansion to Uganda and Tanzania. Notably the study revealed that legal and political environment in the regional had a huge bearing on the expansion process of the company. vii The economic performance of the countries in the region also emerged as one of the key considerations the managers of the company look into before determining the desirability of the market in the country. The education system differences and lack of governments investment in research and development was identified as one of the challenges regional companies faced. Since they lack the regional expertise to produce innovative products geared towards satisfying the regions requirements. The research contributes to existing literature on the internationalization process of companies and the challenges faced by Multinational Corporation in their expansion process.