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.