Market Attractiveness, Industries Environment Competitiveness, Entry Mode Choice Analysis -Methods Applied AHP, SWOT, Malmquist Index, Stepwise-Regression, and Proxy Framework Methods (SSA region)-
Year: 2016
Type: article
Abstract: Purpose: The principal objective of this study is to conduct empirical research on potential attractive markets in Sub-Sahara African, based on general macro environment and industry competitive analysis, to differentiate, identify, and highlight those countries with potential attractive markets and the ones with higher risks for investment.Measure and document the influences of the supporting industries total factor productivity in agriculture, electricity, gas & water and financial sectors in overall potential market attractiveness.The results, meant to establish the effectiveness of the existing policies also as basis for remedying any shortfalls for long-term sustenance of potential attractive markets and robust development of the region.The general macro analysis and the industry competitiveness, analyzed in terms of standalone and trading blocs to identify the industries contribution on potential attractive markets.Lastly, the author seeks for a viable entry mode choice in SSA markets, applying Dunning's eclectic theory.The goal of the outcome is to enable organizations senior managers make efficient and faster competitive actions and responses in strategic decisionmaking process on potential markets in Sub-Saharan countries.Design/Methodology/approach: Due to the economic and social complexities of the Sub Saharan region coupled with deficiency of data in the firm level.This study adopts hybrids of techniques for exhaustive analysis.The general macro environment analysis for market attractiveness in chapter 2 adopts analytical hierarchy process (AHP) and SWOT methods.The supporting industries analysis in chapter 3 applies DEA based Malmquist Index (1953), to calculate the trend in total factor productivity of the agriculture, energy and financial sectors, and stepwise regression, to examine the contribution of the input variables to the formation of the total factor productivity growth.The industry competitiveness analysis in chapter 4, integrates various tools from different scholars, which includes qualitative SSA's economics development literature review, the traditional long-term (Porter competitiveness 90s), the input-output tables (Manfred et.al, 2013), and the DEA based Malmquist TFP Index (Fare et.al 1994).Lastly, in chapter 5, the market entry mode, adopts Dunning's eclectic theory qualitative methods.Findings: In general macro-environment the resulting priorities reveals attractive market potential in twenty SSA countries.However, in terms of the contributions or effects of total factor productivity growth and the industry competitiveness on overall market attractiveness the results reveal ii horrendous performances.The supporting industries total factor productivity results reveals, regressive state in agricultural and energy sectors in most of the countries.While the industry competitive analysis reveals, in most countries the industries are using outdated technologies, the major cause of mediocre performance especially in the secondary sector or manufacturing the least contributor in overall potential attractive markets.In standalone markets, Angola is the most competitive in almost every industry.However, in overall market attractiveness, Mauritius is the best practice model.In trading blocs, the Southern African Development Community (SADC) is the most competitive and the region with the potential attractive market.This analysis provides better understanding of the trade-offs in the decision making process and the effectiveness of applying various models in decision-making processes.Combining AHP absolute measurements with MI index, Input-Output tables and Dunning's eclectic in multi-criteria decision problem offered comprehensive results on theoretical and practical problems.Research Limitations/ Implications: Follow up study is necessary in market attractiveness model with more variables in sub-criteria level for better assessment of the overall markets.Moreover, more research is necessary in most of the countries especially those countries where the supporting industries are liabilities and yet have higher weighted priority in general macro environment. Practical implication:The hybrid of various models is expedient tools for those searching for new markets in Sub-Sahara African or other developing countries. Originality value:The research advances the body of knowledge on market attractiveness by addressing the shortcomings of the traditional macro analysis (PEST) and expands past studies on developing countries market potential analysis.In addition, the authors designed useful scholarly frameworks for industry environment analysis and suggested the viable mode of entry in SSA markets.Expanded or advanced the analytical hierarchy process by incorporating conventional relative measurements with conventional absolute in multi-criteria decision-making minimizing subjectivity in the global environment.Combined and expanded the Porters five forces with a proxy framework for better industry evaluations by adding time dimensions.
Author: Peter Symon Nganga
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2381721208