Effect Of International Market Entry Strategies On Growth Of Local Horticulture Firms In Nairobi County, Kenya

ABSTRACT

The general purpose of the study was to investigate the effect of international market entry strategies on growth of local horticulture firms in Kenya with special focus on firms operating in Nairobi County. The study was guided by the following objectives: To establish the effect of export strategy on growth of local horticulture firms in Kenya; To establish the effect of franchising strategy on growth of local horticulture firms in Kenya; To establish the effect of strategic alliance on growth of local horticulture firms in Kenya and lastly to establish the effect of joint venture on growth of local horticulture firms in Kenya. The study was informed by four theories namely: Absolute advantage theory, International product lifecycle theory and transaction cost theory. This study will use descriptive survey research design. The population of the research was the local horticultural firms in Kenya which were mainly drawn from Nairobi and other parts of the country. According to the Kenya Bureau of Standards, there are 187 firms registered with diamond mark label as of October 2017 from which populations of 123 firms were selected. Primary data were collected through a questionnaire. Descriptive and inferential statistics were used to evaluate respondents’ data. The researcher used the most common internal consistency measure known as Cronbach’s alpha (α). The recommended value of 0.7 was used as a cut-off of reliabilities and used descriptive statistical tool SPSS and MS excel tools were used to analyze and present the data. The results indicated that exporting strategy, franchising strategy, strategic alliances, joint venture were positively and highly correlated with growth of local horticulture firms in Kenya. Based on the findings it was recommended examination of more market entry strategies into the foreign market for the exploration of the market opportunities. Local Horticulture firms should critically analyze the various strategies at their disposal in entering a new market before making decisions on how to enter the selected market. Market entry strategy plays a very important role in determining the successfulness of the firms. Export strategy should be exercised by a firm who primarily view international markets as a means of disposing excess production, or a firm with limited resources available for international expansion. The study concludes that export strategy, franchising strategy, strategic alliances and joint venture strategy affected growth of local horticulture firms in Kenya. The study also concludes different strategies affected growth of local horticulture firms in Kenya. Joint ventures is seen as more favorable when the partners’ strategic goals converge while other competitive goals diverge and lastly joint venture partnership gives business better control over operations and also access to host market knowledge.