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Unformatted text preview: COSATU is the biggest trade union
federation in South Africa and all the above trade unions are its affiliates.
COSATU is in alliance with the ruling political party, the African National
Congress; Minister of Economic Development; Minister of Trade and Industry; Minister of Agriculture, Forestry and Fisheries; and South African Small, Medium and Micro Enterprises Forum (SMMEF). 10 1.6 Research Problem As retail MNEs explore opportunities in emerging markets, there are many success
factors confronting them. A less understood phenomenon by both practitioners and
academics are the stakeholder management dynamics during entry into these markets.
The study focuses on this problem, using the case of Wal-Mart in South Africa. The
research problem confronts both academics and business people as they seek to better
understand what it takes to succeed in diverse markets. 1.7 Structure of the Report Chapter One of this report is an introduction to the study. The chapter defines the
research problem, sets out the need for the research as well as its objectives and
motivation. It also sets out the scope of the research. In addition, it sets out the
background to Wal-Mart and its entry into South Africa.
Chapter Two contains a review of academic literature and theory that forms the context
and justification of the study. The literature review starts with internationalisation in
general and retail internationalisation in particular; followed by the general theory of
stakeholder management, and concludes with stakeholder management during retail
entry. A summary of the literature review at the end of the chapter shows the integration
of the literature and the research focus.
Chapter Three sets out the precise purpose of the research, followed by the research
questions. Chapter Four gives details of, and explanations for, the qualitative archival
analysis method that was used, and defines the unit of analysis, the population, the
sample size and sampling method. The details of how data was collected and the
process of data analysis is provided. The chapter concludes with limitations imposed by
the research method.
11 Chapter Five presents the results of the research. The chapter starts by presenting
emerging themes from the data, followed by results presented in accordance with the
Chapter Six discusses the results in terms of the research questions. The discussion
integrates the findings with existing literature as well as insights from the researcher.
Chapter Seven contains conclusion and recommendations. It highlights key findings of
the research, provides recommendations to practitioners and academia, and establishes
conceptual limitations of the research, concluding with recommendations for future
research. 12 CHAPTER 2: THEORY AND LITERATURE REVIEW 2.1 Introduction With the growing importance of the emerging economies in world trade (World Bank,
2011) there is considerable interest on entry into emerging markets by the MNEs. While
MNEs from developed countries still dominate global business, accounting for the lion’s
share of FDI flows, there is some notable growth in developing country MNEs
(Ramamurti, 2010). No serious MNE can ignore developing markets, especially
emerging markets. Chan, Finnegan and Sternquist (2011), citing Planet Retail, point out
that by 2008 global retail sales will have reached $14.3 trillion, 50% of which will be
generated outside developed countries. Numerous studies have been devoted to finding
the reasons for internationalisation (Elg, Ghauri, & Tarnovskaya, 2008). The reasons
given are summarised below, in no particular order and not mutually exclusive: Domestic competition (Vida & Fairhurst, 1998); Market saturation (Vida & Fairhurst, 1998); Pre-empting competitors (Hill, 2007); Acquisition of technical expertise (Rugman, 2009); Secure natural resources (Bhaumik & Gelb, 2005); Increase sales and growth (Bhaumik & Gelb, 2005); and Search for cheap labour (Alexander, 1990). A challenge for developed country MNEs is how they perform in this new theatre for
trade and global economic growth. More specifically, how do they enter these markets?
Developed country MNEs often lack the experience of operating in emerging markets,
13 and are ill-prepared for the challenges they encounter. Verbeke (2009) and Bhaumik
and Gelb (2005) point to information asymmetry regarding the business environment of
the host country as being a challenge. Luo and Shenkar (2011) advance a theory of
cultural friction to explain the complexity of MNE entry into new markets. There is wide
acceptance that emerging markets, although they themselves are not homogeneous,
are markedly differently from developed country markets (Reinartz, Dellaert, Krafft &
Emerging markets pose opportunities for higher returns amidst complex socio-economic
challenges that can have a direct bearing on business. They are often characterised by
immature markets and institutional weaknesses or voids to varying degrees. For
example, a retailer seeking to enter...
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This document was uploaded on 01/24/2014.
- Winter '14