Market Entry Strategies And Organizational Culture Of Global Logistics Firms In Nairobi Kenya.

Abstract

Global logistics companies have realized that in order to keep being profitable and cope with the emerging market trends and requirements, venturing into other markets outside of their normal geographic areas is the way to go. The market entry strategy that is chosen and applied during the internationalization process is very key if success is to be achieved. Consequently, upon successful entry, companies have to adopt an organization culture that fosters their stability in the new markets and encourages more growth. The research objective of this study was to determine how different market entry strategies influence the organization culture that is adopted by global logistics firms venturing into the Kenyan market and in particular Nairobi. Three organization cultures namely; bureaucratic, entreprenual and competitive cultures were studied in relation to 8 market entry strategies preferred by global logistics companies. The study adopted a cross-sectional descriptive survey design where primary data was collected by use of a questionnaire with questions presented on a Likert Type Scale. The target respondents were marketing managers and human resource managers of the 67 registered global logistics companies that have set up in Nairobi Kenya. The study was therefore also a census study. Questions asked bordered general demographics, various methods of market entry strategies into the Kenyan market and how each of them has contributed to the organization culture of that specific company. Data was analyzed using descriptive statistics and Statistical Package for the Social Sciences (SPSS). The study found out that there is a very strong positive relationship between the market entry strategy used and the organization culture adopted. It was clear from the findings that global logistics companies preferred market entry using licensing, Foreign Domestic Investment (F.D.I) and exporting in that order. These market entry strategies leaned strongly towards adopting a bureaucratic culture. Subcontracting and joint venture strategies adopted an entreprenual culture while mergers, acquisitions and joint ventures adopted a competitive culture. Some of the limitations of this study were lack of failure to achieve 100% respondents rate with only 70% of the companies providing the required data and also the fact that companies upon successful entry may choose to adopt a certain organization culture but later on change it at the discretion of the management mostly upon achieving the required stability in the market. This study did recommend that further research be carried out in addition to the 8 market entry strategies and the 3 organization cultures that were the subject of study. There was also the recommendation that other researchers expand this study to other industries besides global logistics companies with a good recommendation being manufacturing, information technology and even marketing companies.