The development of a growth-strategy support model to enable cross-border expansion stratagems
Abstract
As a result of globalisation, many of the world's developing economies experienced
periods of good economic growth. The southern African country of Mozambique is a
prime example of such positive experiences. Foreign investors' appetite to capitalise
hereon has nevertheless been dampened due to associated levels of uncertainty,
market and regional instability, lack of market intelligence, and many other unknown
variables. Again, Mozambique is a prime example of such negative realities.
This research focuses on a case study organisation's uncertainties in its growth
ambitions into Africa, specifically Mozambique. The primary objective of this
research was to develop an elaborated Action Design Research (eADR) inspired a
growth-strategy support model that is able to deliver the necessary consistency and
accuracy that will support organisational growth strategies in targeted territories.
Unfortunately, the level of uncertainty within developing economies requires an
unconventional approach to strategy development (perhaps more of a stratagem
approach) when collecting, analysing, and monitoring market intelligence for
investment purposes.
The research design included a literature phase and a (validated) empirical phase.
The research contribution was the delivery of a theory-ingrained, pragmatic decision
support model. The resultant growth-strategy support model can be used to mitigate
and reduce risk exposure when embarking on investment or expansion strategies. The
empirical research was conducted in an interpretive paradigm using a qualitative
research methodology. Due to the complexities inherent to the Mozambican business
environment, the study was executed in a realism framework taking cognisance of
stakeholder and stewardship theories.
In reaching the primary research objective, three supportive sub-objectives were
identified: (1) the development of a holistic decision-support framework that serves
as a guiding framework in formulating the envisaged decision-support model, (2)
development and validation of an Alpha-design growth-strategy support model, and
(3) delivering a Beta-design growth-strategy support model through the refinement
of the Alpha-design model.
• Sub-objective 1: SWOT and PESTLE analytical techniques were utilised to
analyse the uncertain Mozambican business environment. The primary data were
collected during semi-structured interviews with selected industry participants
operating in relevant industry sectors across Mozambique. The resultant decisionsupport
framework was developed from identified key factors – analysed and
ranked according to their potential severity.
• Sub-objective 2: The Alpha-design model was developed as a proof-of-concept
version of the growth-strategy support model from the contributions of the industry
participants, guided by the principles of the eADR approach. The different elements
of the PESTLE categories were assigned weighted ratings, which enabled the
comparison and analysis thereof in context of the organisation's discretionary
weightings (given by the researcher). This allowed for the evaluation of the
expansion strategy's suitability in the context of the predetermined risk appetite
and risk tolerance levels.
• Sub-objective 3: While developing a Beta-design model, a researcher-practitioner
team with first-hand industry knowledge revisited the findings of the earlier eADR
iterations. The industry participants were employed in strategic decision-making
roles identified, and the group debated the advantages and disadvantages of the
Alpha-design model as part of the refinement process. They analysed the data
collection process and the development stages of the Alpha-design artefact. They
communicated their opinions on the discretionary weightings applied before
making suggestions for further investigation.
The refined growth-strategy support model developed in this study can assist
companies in highlighting potential macroeconomic risks related to a targeted
investment territory. Doing so may empower them to alleviate the levels of uncertainty
before finalising their investment or growth strategies in solving this real-world
problem. As developing countries continuously evolve, the growth-strategy support
model and the initial decision-support framework need to be treated as living artefacts
and amended as macro and micro environments change.