Factors That Influence International Trade of Multinational Corporations in the Premium Liquor Industry in Kenya: a Case Study of Pernod Ricard Kenya Ltd

Abstract

The purpose of this was to establish the factors that influence international trade of multinational corporations in the premium liquor industry in Kenya: a case study of Pernod Ricard Kenya Ltd. The value of this study was to help the players in this industry understand better those factors that influence international trade in the premium liquor industry. These players can be both local and international players. They would be able to know those factors that affect them from social, economic, legal, political and technological angle. The study was anchored on the international trade theories such as the mercantilism, absolute advantage, country similarity theory, product life cycle theory and current dominant trade theory.The study adopted a non-technical, exploratory approach that combined both qualitative and quantitative tools. The target population were 48 staff of Pernod Ricard Kenya Ltd through a census sampling. Questionnaires were the source of primary data and the study employed exploratory data analysis and presented in frequencies, percentage, means and standard deviations using tables.The study concludes that the political factors influencing international trade of Pernod Ricard Kenya Ltd are the threat of terrorism, the dynamic political environment, the interaction between the organization and other international bodies/nations and political instability. Among the legal factors were the legal barriers between various countries, restrictive laws, lack of supportive legal systems and the high taxation rates. The study further found that the economic factors were the high rate of competition, the cost of buying premium liquor and finally the amount of income extracted from the international markets. The socio-cultural factors were the religious disparities between the market structures, the different cultural practices across the global players, the religious believes between the players at the international market and the drinking occasions across the market. The environmental factors were the process of customs clearance, the ability of the organization to access business permit, the presence of a friendly business environment and the rampant cases of corruption. Key conclusions are that threat of terrorism, too many legal requirements, lengthy customs clearance processes, religious disparities and very high competition influence IT. Recommendations include the government working to ensure systems support IT. Security is controlled to avert terrorism and promote fair competition practices.