Foreign Market Entry Strategies and Financial Performance of Kenya Reinsurance Corporation in Foreign Markets

Abstract

The objective of this study was to research on the foreign market entry strategies adopted by Kenya Reinsurance Corporation Limited when entering foreign markets and its financial performance of in foreign markets. The research made use of a case study research design. The researcher collected primary data by conducting interviews. The study relied on qualitative data corrected by the researcher. The researcher employed an interview guide since it enabled the collection of first hard information regarding the study phenomena. In this study, the researcher relied on primary data collected from three managers of Kenya Reinsurance Corporation Limited. Interviews were conducted with the finance manager, business development manager and the research and strategy manager. The primary data collected was qualitative in nature. Content analysis was employed to analyze the data that was collected through conducting interviews on the three managers. The study findings showed that Kenya Reinsurance Corporation uses foreign market entry modes such as exporting, strategic alliance and foreign direct investment. The study also concludes that financial performance of the corporation has improved since it started entering foreign markets due to positive contribution of revenue and profits from foreign markets. The study also established that Kenya Reinsurance Corporation relies on market research to select its foreign market and the modes of foreign market entry. The study established that exporting of reinsurance services and signing of strategic partnerships were preferred by the corporation as the first modes of foreign market entry since they involved less commitment of capital. The study established that involvement of employees and key stakeholders of the corporation is key to the success of foreign market entry process. The study main limitation was interviewees unwillingness to give much information without exposing the corporation’s confidential information. This was mitigated by assuring the respondents that the information was purely for academic use. The study recommends the use regular updates to communicate the process of foreign market entry and financial performance of the corporation in foreign markets. The study recommends continued market research at predetermined intervals to ensure that the adopted foreign market entry strategies remain relevant. Further research can be done by combining both primary and secondary data and investigating the impact of foreign market entry strategies on the corporation performance using correlation analysis. A similar study can also be done on other Kenyan reinsurance companies.