Successful strategies followed by multinational enterprises to expand into Africa

Abstract

Africa is known as the last growth frontier, but it is also known as the continent with the most challenging external factors. Multiple entities have invested and exported into Africa, some have succeeded where others had to withdraw out of the countries. This dissertation focuses on three exceptional MNEs, specifically in the retail industry, that have succeeded despite the challenges they had to face. These three companies are Walmart (an American company), Carrefour (a European company) and Shoprite (a South African company). A mixed-method approached was used to determine the challenges and the lessons the MNEs had to face and how they have managed to overcome these challenges. It involved an in-depth case study of each of the three MNEs. Furthermore, interviews were conducted with company officials chosen based on their knowledge and expertise in the African markets. The findings from the research shows that it is possible to expand into Africa following different strategies. Massmart only takes measured approaches into Africa, and only expand into new countries is based on the market potential and the ability to succeed. Carrefour's main strategy is to acquire other companies to move into Africa. Shoprite on the other hand claims that there is no written strategy that was followed when they expanded into Africa. It is also evidential that government regulations (ownership of land, unnecessary regulations, etc.) pose as a rather large threat for companies wanting to invest in Africa. This research contributes to the knowledge base concerning the African markets and how to successfully expand into Africa by following different strategies.