Thesis
An investigation into the market entry mode decisions of international retailers in the developing Nigerian market : an institutional and transaction cost perspective
- Creator
- Rights statement
- Awarding institution
- University of Strathclyde
- Date of award
- 2012
- Thesis identifier
- T13273
- Qualification Level
- Qualification Name
- Department, School or Faculty
- Abstract
- Chief executives and management teams of large retail organisations and other type of firms acknowledge that globalization is the most critical challenge they face today. They are also keenly aware that it has become tougher now to identify internationalization strategies and to choose which countries to do business with. While some have stuck to the strategies they have traditionally deployed, which emphasize standardized approaches to new markets, others have operated with a few local twists. As a result, many multinational corporations are struggling to develop successful strategies especially in emerging markets. Retail entry into the developing Nigerian market has been seen to be particularly challenging as a result of the absence of specialized intermediaries, regulatory systems, and contract-enforcing mechanisms - "institutional voids," which hamper the implementation of company strategies. Using a multiple case study of twelve retail firms in the Nigerian market, this study assesses the entry mode strategies used by foreign retail firms in Nigeria. It draws on both the Institutional theory and the Transaction cost theory. The present study reveals that both internal and external factors (firm specific and host market environmental factors) influence the entry strategies adopted by foreign firms in the Nigerian market. These include unique brand concept, international experience, product/company reputation, firm size/ market resource commitment, cost of operation, network relationships in the market, as well as company habits, market population and wealth, close retail market distance, regulatory, legal, political and economic systems in the host Nigerian market, etc. The cost of operation and network relationships in the market directly relate to the transaction cost perspective while the formal and informal classifications of the institutional theory cover such other areas as: regulatory, legal, political and economic systems in the host Nigerian market, unique brand concept, international experience, product/company reputation, firm size/ market resource commitment, as well as company habits, market population and wealth, and close retail market distance. This study is one of the foremost to consider these two important perspectives in the context of a developing market like Nigeria. This study has several implications for the companies and their managers and also implications for the underpinning theories of transaction cost and institutional theory. Several recommendations are provided some of which are that: international retail firms should consider granting greater autonomy in decision making and use of networks to the subsidiaries in Nigeria because this increases their ability to learn from the foreign market and to realise innovation advantages associated with linkages to valuable sources of information and knowledge. The firms should better understand the characteristics of the various entry modes open to them and align these with their company strategies. The host Nigeria government is also called upon to improve the various institutional frameworks to boost FDI into the retail sector of the economy.
- Resource Type
- DOI
- Date Created
- 2012
- Former identifier
- 948497
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