Institutions, small local firms’ strategies, and global alliances in sub-Saharan Africa emerging markets

Abstract

Purpose The purpose of this paper is to respond to the call of international marketing professionals for more studies on strategies that firms use in response to the complexities of interacting with other institutions in the emerging markets (EMs) of sub-Saharan Africa. The key research question investigated by employing the exploratory qualitative data gathered is: What strategies and global alliances do small local firms (SLFs) in Nigeria adopt to succeed under complex market conditions? Design/methodology/approach The methodology employed is exploratory qualitative research. The authors conducted extended interviews to generate rich case study data from the top management of the selected SLFs in Nigeria. The interview data were assessed using open, axial and selective coding to uncover macro-narratives that guide SLFs’ strategies and global alliances. Findings The macro-narratives derived from the qualitative case analysis reveal a theoretical framework centered on three major elements of competitive strategies in Nigeria: build global capacity and strategic alliances from the get-go; develop local strategic alliances; master matching alliance partners’ needs to create innovative payment plans and, when necessary, shift the transaction cost burden to alliance partners. Matching theory rather than traditional network theories is better at explicating SLFs’ alliances in Nigeria. Implementation of these strategies requires flexible strategic initiatives. Originality/value The study adapts institutional interaction theory, network theory, matching alliance perspective, trade credit theories and the literature on small firms’ strategies in EMs to explicate successful small local firm strategies and global alliances under complex market conditions in Nigeria. The recognition that SLFs regularly migrate and shift the burden of transactions’ cost to multiple stakeholders in the supply network by matching customers and supplier needs is important. The discovery of matching theory in explicating SLFs’ global alliances in Nigeria is unique to this study.

International entrepreneurship from emerging to developed markets: an institutional perspective

“…But informal institutions, such as through informal networks and cultural understanding, can become valuable for EM entrepreneurs (Liou and Rao-Nicholson, 2017). In particular, existing or new informal networks may provide legitimacy with important host market institutions and/or provide other resource support such as financial capital or knowledge to facilitate developed market entry (D'Angelo et al , 2013; Dana and Ratten, 2017; Oyedele and Firat, 2019). Yet, kinship ties or other informal/personal network relationships may not provide meaningful support for some opportunity development activities in the developed market (Musteen et al , 2010; Williams and Vorley, 2015).…”

The relevance of international marketing strategy to emerging-market exporting firms: from a systematic review towards a conceptual framework

“…In a nutshell, emerging-market exporting firms have been firmly acknowledged to be considerably different from exporting firms situating in developed economies primarily due to institutional differences and resource-based considerations (Buccieri et al , 2020; Falahat et al , 2018; Oyedele and Firat, 2020). In this sense, various internal and external factors are likely to come into play in the international marketing strategy formulation and implementation of emerging-market exporting firms (Boso et al , 2018; Samiee and Chirapanda, 2019), as firms based in emerging-markets follow distinctive paths to deploy their resources and to develop export strategies in order to deal with the institutional distances between their home and target markets (Assadinia et al , 2019a; Li et al , 2017).…”

“…Building on the aforementioned issues, since the formulation and implementation of international marketing strategy are subject to both internal and external factors (Gnizy, 2019; Jiménez-Asenjo and Filipescu, 2019; Lee and Griffith, 2019), it has been supported that exporting firms based in emerging countries need to follow distinctive paths in the way of internationalization compared to developed economy exporting firms (Eren-Erdogmus et al , 2010a; Samiee and Chirapanda, 2019; Xie and Li, 2018). Specifically, in spite of cost advantages, emerging economies are generally characterized by institutional turmoil, relatively low degree of economic development, and less dynamic competition (Aulakh et al , 2000; Hoskisson et al , 2000; Oyedele and Firat, 2020). Besides, emerging-market exporting firms struggle with the lack of strategic endowments such as sufficient knowledge-based resources, financial resources and research and development resources (Bianchi, 2014; Singh, 2009).…”

The antecedents and consequences of exporting cultural products

“…Strong legal institutions in the host country have also been shown to protect the investments of multinational enterprises (MNEs) and thereby influence the entry strategies chosen (Meyer et al, 2009). Institutions may also affect the strategies of MNEs (Peng et al, 2008) and small local firms in African emerging economies (Oyedele and Firat, 2020). Recently, strong legal institutions were found to protect consumers, increasing their trust in brands from the country (Lin and Chuang, 2016;Lin et al, 2020).…”