Its primary interest is on the impact of the entry of

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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 research questions. 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 & Varadarajan, 2011). 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...
View Full Document

This document was uploaded on 01/24/2014.

Ask a homework question - tutors are online