Internationalization of Operations by Medical Kenya Limited

Abstract

Internationalisation is the process of engaging in trade and business activities which cross national frontiers. The objective of the study was to analyse the internationalisation of operations by Medicel Kenya Ltd. This included the analysis of the involvement and commitment of the firm to international business activities. The commitment of firms to international business, takes the form of either fast based or slow gradual approaches, based on the firm’s objectives, resources and market characteristics. The incremental approach is frequently used as an expansion market entry strategy by firms. Commitment arises from careful consideration of set up costs and maintenance costs. The research was qualitative in nature. The study chose to analyse data using content analysis, in order to bring out key themes of the study, as well as make inferences from the study .The data collection was through interviews with the decision makers and implementers of international operations concerns in the firm. The study reviewed available literature, to provide insight into international business operations and processes. The study selected internationalisation theories based on their practicality and relevance to the international business field. The chosen theories and models analysed were, the Uppsala model, which explains the incremental approach which firms adopt in order to increase their involvement in foreign markets .The location specific theory in the study related the location advantages that firms enjoy and which influence their choice of an international market. The study sought to find a suitable model for the company. The findings were derived from interpretation of collected data, to provide an insight on how the firm had achieved internationalisation, as well as other firm and environmental factors that influenced internationalisation by the firm. The findings assisted in investigating the effectiveness of the theories applied to the study. From the results it was concluded that the behavioural approach and the locational approach have their strengths in explaining the internationalisation of the firm understudy. Exportation was found to be the major entry mode selected by the firm understudy .The study identified that the internationalisation had been an incremental process, influenced by factors which were considered as favourable for the pursuit of international business by the firm. Various recommendations to regional policy makers were indicated in the study. Policy makers were advised to facilitate and ease internationalisation efforts of SME’s through various strategies that create an enabling environment for the firms such as reduction of complex and bureaucratic practices that hinder foreign market entry. Policy makers including governments were recognised in the study as necessary for the advancement of interregional business in the global arena. Acquisition of internal knowledge was recommended as a practice that would propel the firm’s internationalisation efforts. The study recommended that the adoption of internal analysis mechanisms were necessary for matching the firm’s capabilities to the external motivations for internationalisation. This would prevent the firm from engaging in foreign markets that would not result in profit maximization for the firm.