The internationalisation of South African enterprises: A focus on international market selection

Abstract

A systematic approach is considered a rational and formal decision-making process, where objective selection criteria – including statistical methods – are used to analyse a potential target market (Costa e Silva et al. 2018:581; Musso & Francioni 2014:302; Papadopoulos & Martín Martín 2011:133–134). In comparison, a non-systematic approach is considered more disjointed and irrational (Brewer 2001:156; Cavusgil & Godiwalla 1982:52; Papadopoulos & Martín Martín 2011:139). Orientation: The selection of attractive foreign markets has been identified as one of the most important decisions in an enterprise’s internationalisation process. Research purpose: The primary objective of this study was to determine which international market selection (IMS) processes, if any, South African enterprises follow when selecting international markets for expansion. Motivation for the study: Whilst a significant effort has been made to close the gap in knowledge regarding the IMS processes followed by enterprises from emerging markets, little is known about the IMS processes of South African enterprises. Research design, approach and method: This qualitative descriptive study collected data through semistructured interviews conducted with senior managers who have been or are involved in IMS at 12 South African enterprises. The collected data was analysed using thematic analysis. Main findings: The study found that the majority of enterprises who participated in this study use a systematic, four-step IMS process. However, the process is more flexible than that proposed by some theoretical models. In particular, the selection criteria used when analysing a market are considered flexibly and, in some cases, even in parallel instead of sequentially as proposed by some models. Practical/managerial implications: Research shows that mistakes related to the inappropriate and inadequate evaluation of markets are almost always more expensive than the costs associated with conducting a systematic IMS. Therefore, this research provides guidelines to enterprises on how to conduct such an IMS. Contribution/value-add: This study contributes to the extant IMS literature by broadening our understanding of the IMS processes followed by South African enterprises and in doing so, answers the call to close the emerging market knowledge gap.