Entry-Level Export Strategies in Developing African Countries

Abstract

Considering Nigeria as an economically and demographically viable target market, this study examined entry-level export strategies that could facilitate the expansion of foreign firms to the Nigerian market. It was necessitated by the intricacies experienced by foreign companies in obtaining credible information about the Nigerian market for internationalization decision-making. The study adopted a narrative literature review design, relying on experiential insights and secondary data obtained from government and industrial sources in Nigeria to obtain the information presented in the investigation. An in-depth content analysis method was used to analyze the secondary data obtained for the study. From its findings, it was revealed that Nigeria is a profoundly viable export destination for a wide variety of foreign products including consumer electronics, ICT accessories, fashion, cosmetics and smartphone accessories. Nevertheless, the country’s volatile economic condition poses substantial risks for foreign companies in terms of foreign currency fluctuations; but using an export strategy, these risks can be considerably mitigated. This indicates the need for careful and deliberate export planning before entry into Nigeria to ensure that exporters familiarize themselves with information and knowledge of the workings of the Nigerian market. To this end, we recommend that intending export companies should carefully select suitable market segments they can consistently serve; they should also ensure to obtain all necessary certifications and permits from key agencies like the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), and Standards Organization of Nigeria (SON) to ensure smooth operations; and in terms of export entry option, we recommend a hybrid approach (direct and indirect exportation), which avails companies the opportunity of using local expertise and network to achieve effective distribution while maintaining strong control over their products.