EXAMINING THE EXPORT STRATEGIES AND ITS EFFECTS ON THE PERFORMANCE OF AGRO-PROCESSING INDUSTRY OF GHANA

ABSTRACT

The general objective of the study is to examine export strategies and its effects on the agro processing industry of Ghana. The study adopted a descriptive and exploratory research designs. Purposive and convenience sampling technique were used to select the managers and junior staff respectively. Structured questionnaire was administered to 50 respondents. Data were analysed with the aid of SPSS. The study discovered that the type of export strategy pursues by the agro processing companies can to a very high extent influence their performance. The study had again revealed that a unit change in export strategy would bring 0.589 (59.8%) in organizational performance. The R square result above implies that the independent variable has 85.4% influences on organizational performance. Meaning that export strategy has strong effect on organizational performance. The study conclude that company reputation, importers distribution network, personal contact with overseas distributors and export marketing knowledge, together with these production quality and systems quality management, quality assurance processes and others expertise were available in their firms give value to the firms to effectively compete in the export business therefore must be tactically looked at. Furthermore, the long years of experience in business management and agro-oil exporting by majority of the workers puts the companies at a great advantage because the more an employee stays in an organization, the more skilled and professional he becomes. The study had discovered that export strategies adopted by the agro processing companies within the Brong Ahafo Ashanti Regions are positively affecting their performance. It is therefore recommended that the current strategies must be improved to sustain performance of the companies. These can be done through adoption of quality management principles and strategic management practices. The scope of the study, time frame and financial recourses were the major limitations of the study.

CHAPTER ONE

GENERAL INTRODUCTION 

1.0 Introduction

The general introduction of the study is presented in this chapter. Specifically, the chapter encompasses the following; study background, statement of the problem, general objective, specific objectives, research questions, justification of the study, scope of the study, and organization of the project. It serves the foundation from which all the other chapters of the study are built.

1.1 Background of the study

Internationalization is the process of increasing the accumulation of knowledge in markets and institutions abroad. It has been observed that firms start the internationalization process by exporting products to culturally similar countries. However, other researchers argue that the longer a firm waits to initiate international activities, the more difficult it will be to grow internationally (Sharma and Blomstermo, 2003).

Internationalization can be perceived as a part of the ongoing strategy process of most business firms. The main differences between internationalization and other types of strategy processes are as follows: first, when products, services or resources are to be transferred across national boundaries, the firm has to select the country where or with whom the transactions should be performed. Secondly, the firm has to select the international exchange transaction modality, i.e. a foreign market entry strategy (Andersen and Buvik 2002).

Entry strategy includes the various forms of approaches and procedure and methods used by a company to start doing business in a foreign country (Shama, 2000). Entry strategy is an institutional arrangement that makes possible the entry of firm’s products, technology, human skills, management, or other resources into a foreign country (Karkkainen, 2005). There are number of available marketing strategies that are available to prospective companies who wish to enter into the international arena. There is the need to distinguish between equity and non-equity modes when considering market entry.

The Equity node implies a situation where the firms take some ownership degree of the market organization. These include wholly owned subsidiaries and joint venture. The non-equity includes; ownership and often times contractual agreements such as franchising and licensing. Some Authors also involve the possibility of combining the two (Wilkinson and Nguyen, 2003).

There are several ways to expand internationally; these have been categorized into four main strategy. These come in different forms from the very high risk strategies to the lowest risk strategy. According to Caves (1982) the following are the four most basic ways to arrange the strategies from the highest to the lowest identified four basic ways to expand internationally. These are; exporting, licensing and franchising, strategic partnership and wholly owned. In a related study the authors stated that there are six basic approaches into entering a new global market. These were outlined as follows; exporting/importing, licensing and franchising, joint venture, consortia partially – owned and wholly owned subsidiary (Cateora and Graham, 2002)

The decision to enter into relatively new market depends on the perceived risk. The selection of a particularly entry strategy is also influenced by how the individual corporate entities perceived the risk. Two companies many consider two different entry strategy towards the same country. Whereas others may adopt different strategies to enter into different countries

All these suggest that the drive to enter into new market is relative and dynamic either than a static affair (Cateora and Graham, 2002). Other study also suggests that the initial classification of new market entry can be grouped into two. Namely; the location of the manufacturing facilities and the percentage of ownership that a firms desire in foreign markets.

Many research works have reported on the motives behind internationalization among companies. Although different Authors have reported different findings, majority seems to revolve around the following: global reputation, the prospect of long term growth and development, profitability drive and enjoying an economy of scale. Others have also reported the following as the main motive behind the drive: saturation of the local market, internal competition, weak government policy and support among others. Literature review had established that some of these factors or combinations of all are usually considered when deciding to enter international market. But individual’s choices are usually influenced by different factors (Cateora and Graham 2002).

However, the global market is not without a challenge. The following are normal practices in the international market. The ever increasing dynamics, intense competition, uncertain unreliable market conditions, the rapid change in technology, short project life cycle among others.

The financial requirement and the managerial skills needed to succeed have always been a serious challenged for the under developed world. Commercialization is therefore a huge burden for the new entrants. Meanwhile literature suggests that, the success in the international arena depends on the product or service launch. Hence commercialization is a key determinant of success but also comes with financial burden (Pinto et al., 2007).

Although several studies have been conducted on export strategies little is known in terms of specific sectors. The previous had over focused on multi sector studies. Despite the role and importance of agro-processed export items in export leap strategy and economic, social and cultural development plans in the country, little study has been conducted in this domain. Majority of studies are done at the macro level that focuses on the government role in export. Few researches in country have been on micro level that focuses on company’s level. This present study, concentrates on export strategies, because one of the critical decisions in the internationalization process is the choice of an entry strategy (Quer-Claver and Andreu, 2007).

1.2 Statement of the Problem

The outcome of globalization and internationalization have resulted in the sprang of competitions and complex decisions in the world today. The decision to enter into other market has been very wide and well known. The ability to select the most appropriate export strategy is considered as vital step towards the internationalization drive. The most common forms of entry strategies include; export, import, partnership, acquisition, licensing and franchising. In the under developed world such decisions usually take long time to conclude due to inadequate fianace and limited technological know-how.

In Ghana various governments and heads of state have formulated number of policies all geared towards agricultural sector development however little in seen and known when it comes to internationalization of agro processed projects. The trend and preparation of agro processing sector in Ghana have not been consistent in past. Different approaches have been adopted by different companies but expected impacts are yet to be felt.

These challenges are usually attributed to financial requirement, low motivation, weak leadership, global competitions and taxation. These to a greater extent have discouraged other corporate entities from participating internationally. From the on-going the present study was conducted to address the issue and pose questions such as types of export strategies, benefits of exporting, challenges among others.

For more Marketing Projects Click here

===================================================================

Item Type: Ghanaian Topic  |  Size: 65 pages  |  Chapters: 1-5

Format: MS Word  |  Delivery: Within 30Mins.

===================================================================

DOWNLOAD THIS PROJECT MATERIAL NOW! CLICK HERE!

Share: