Localization as a Strategic Tool for Multinational Corporations in Fast Moving Consumer Goods Industry in Nairobi, Kenya-

Abstract

The main objective of this study was to establish localization as a strategic tool for multinational corporations in Fast Moving Consumer Goods Industry in Kenya. The study followed a descriptive research design and was guided by this specific objective to establish localization as a strategic tool for multinational corporations in fast moving consumer goods industry in Nairobi, Kenya. The study targeted 50 MNCs operating in Kenya. The data was collected by way of self-administered structured questionnaires targeted on operation managers. Forty two completed questionnaires were collected. Regarding how MNCs use localization as a strategic tool to adapt to the Nairobi market the study results revealed that most MNCs customize thri products to meet the needs of the local market as opposed to standardizing their products and they produce high quality goods compared to their local competitors whereas they are not keen to seek advice from local consultants to determine their strategy. The localizing MNCs are keen on aligning their organization structures and having clear job responsibilities to enhance business continuity and adaptability. In terms of the opportunities and incentives available for localizing MNCs most of them prefer having committed specialized partners as opposed to having direct entries into the region. In addition to this we identified that there are numerous gaps in the market that MCs can exploit given their diverse resources. Regarding the effect of localization to MNC’s overall performance, the study established that localization enhances performance because localization helps to meet target customer’s needs. Additionally, it enhances ties with local distribution channel members, hence better financial results. The study recommends that future study should focus on specific factors that MNCs localizing in Kenya should consider to ensure successful localization. To this end, the study concludes that multinational corporations in Kenya should localize their strategies and products much further in order to enjoy the benefits associated with localization as noted above. However, they should carefully manage costs associated with localization so as to ensure that the costs do not exceed the benefits.