Factors Influencing The International Expansion Of Nigerian Banks

Additionally, entry visas for those expatriate are very complicated. The recruitment of qualified skilled experts is difficult and they are not staying long in the country. Because Larson had a promise to increase the share of local ownership, the local partner 's participation seems very important. If the expatriate general manager of the Nigerian operation has delivered a very negative report, the operation should still continue. There are great amount of demands for products in Nigeria and competitions seem not very high. Since different country have different business cultural, to successfully operate the company in Nigeria, Larson have to cope with their way of doing business. After the share of local ownership increase, they cultural of the business might change to the local way. And the company will have more access to negotiate with the government.

The internationalisation process of the firm has been a subject, which has been motive of study for a number of

1. The international business environment is multi-dimensional, including economic, political, socio-cultural and technological influences. While each can be viewed in specific national settings, increasingly they have become interrelated through processes of globalisation. In particular, the role of transnational corporations has been a key to the deepening interrelationships across national borders. Yet, globalisation has not led to convergence. Considerable diversity between nations and regions continues to shape the

British grocery and general merchandise retailer Tesco PLC had announced they were to depart from their international operations within Japan and the United States markets, Tesco had stated that they were to end of such operations due it being unprofitable (Reuters, 2013). This paper seeks out to critically analyse and address the factors which had led to Tesco’s failure in the Japanese and United States market. To aid in justifying the influences in Tesco’s departure relevant international business literature will be evaluated for the suggested reasons for the exit. Furthermore, Part (B) of the paper seeks out to discuss the management of transnational businesses , a range of theories concerning the internationalisation of firms will be compared and contrasted, for instance the explanations presented by Vernon, Johnson and Dunning will aid towards the reasons for the internationalisation process of emerging market multinationals.

There are five major forces that are leading international firms to the globalization of their operations which includes (1) political (2) technological (3) market (4) cost and (5) competition. Many firms initiate international operations to gain assess by combined markets through exporting product or producing within the area.

Internationalisation advantages purely relates to the fact that should it be advantageous to internationalise once all things are considered, it should be done. Thus, Sternquist’s (1997) adaptation of Dunning’s (1981) elective paradigm theory only captures the motives behind internationalisation and whether it is the right idea to expand globally; it does not focus on the strategy firms undertake to enter foreign markets and how they behave once there.

Over the last few decades there has been a substantial amount of attention being diverted towards born global firms who unlike ordinary firms, have defied the traditional stage wise process of internationalization. These firms have long puzzled researchers and challenged the basic perception of internationalization. As a result it has given way to a new field of research and aroused global interest in the emergence and success of these firms. This essay will go on explain why born global firms emerge, the factors that influence them and examples of born global firms in the real world. Uppsala’s theory of internationalization (Johanson & Vahlne, 1977 ) and Stephen Hymer’s Three Determinants theory are used to further analyze this essay.

Before entering the international market, it is vital for businesses to consciously understand the language, culture, religion, demographics, political system, legal system, and economy of the foreign country. Failing to recognise these factors may result in business failure or inability to operate in said country. While these factors are important, additionally so are the market, supplies, investors, locations, and competitors in the country of expansion, as they will affect business success. There are multiple methods that businesses can employ in order to expand into the international market; export (both direct and indirect), foreign investment, relocation of production, management contracts and franchising.

Lately, the international financial integration has increased. Over the years, the world economy has witnessed an increase in the number of individuals and businesses using international banking services. In today’s competitive global economy banks have the option to solely service their home market, to export services to foreign markets, or to establish a presence in that market. Essentially, banks have two options of expanding their operations in foreign markets. They can either service foreign clients through their domestic offices or they can establish a presence in the foreign markets. In general, the reasons for bank internationalization in

Drawing from multiple data sources coupled with semi-structure in-depth interviews as primary qualitative data source and supported by secondary data from both (published and unpublished) sources, namely - the organisations, private documents, annual reports, financial reports, documents and data from public domain, databases, aggregated data, statistics and reports from Central Bank of Nigeria, National Bureau of Statistics, National investment promotion commission, UNCTAD, World bank, Africa Development Bank. The interview was conducted with individual in strategic positions within the case companies. The fieldwork and data collection took place between December 2014 and April 2016 in London (UK), Abuja, Lagos, and Owerri Nigeria. A case study design is adopted in this thesis because of the contemporary nature of the phenomenon under investigation and case study research also provides the platform for theory development and expansion, especially in an area of new research topic whereby a fresh perspective and insight is required

Drawing from multiple data sources coupled with semi-structure in-depth interviews as primary qualitative data source and supported by secondary data from both (published and unpublished) sources, namely - the organisations, private documents, annual reports, financial reports, documents and data from public domain, databases, aggregated data, statistics and reports from Central Bank of Nigeria, National Bureau of Statistics, National investment promotion commission, UNCTAD, World bank, Africa Development Bank. The interview was conducted with individual in strategic positions within the case companies. The fieldwork and data collection took place between December 2014 and April 2016 in London (UK), Abuja, Lagos, and Owerri Nigeria. A case study design is adopted in this thesis because of the contemporary nature of the phenomenon under investigation. Also, a case study research provides the platform for theory development and expansion, especially in an area of new research topic whereby a fresh perspective and insight is required

What that means in Nigeria, we had good growth, we had high profitability the firms were able to generate fund at home which was then reinvest in other African countries, and where we see opportunities was identified. A firm ownership advantage may include resource endowments and favourable domestic

Alpha is the largest and most internationalised Nigerian manufacturing firms. The firm’s evolution, expansion and internationalisation is an example and a proof of a good government economic policy that propelled a visionary businessman with entrepreneurial abilities to build one of the largest…multinational firm in SSA (Interviewee Alpha_g1 September 2015). The firm’s domestic expansion had contributed to a large extent to the increased levels of industrial development and the economic growth of Nigeria in the past 15 years.

The findings indicate the internationalisation process of Nigerian firms deviate from the main stream theoretical claim such as Uppsala model. It can be said that Nigerian firms internationalise to close proximity country not close psychic distance in their early stage of their internationalisation as they follow their clients to render services across border. Proximity not due to Psychic Distance as alleged in Uppsala Model but to the presence of home countries customers presence in the host countries. Home institution factors had also play a role in the rapid growth of the firms due to the recapitalisation requirements by the Government and this allow the firms to bring in capital and to utilise that capital wisely and embark in foreign expansion. (OLI) The recapitalisation and stock listing gave the firms more resources and capacities to be in a better position to compete better in a foreign market this is in line with Ownership capabilities of OLI theory,

Beta is a “new generation banks” in Nigeria, incorporated in 1990 and commenced operations in 1991 as a private limited liability company. The bank evolved and witnessed a rapid growth to attain the universal banking status in 2001 as a result of a policy of deregulation in the Nigerian banking sector allowing Nigerian banks to operate foreign subsidiaries. The same year Beta became the first Nigerian bank to establish foreign retail banking subsidiary in the region to respond to the bank 's customer’s needs in the ECOWAS region, particularly in WAEMU. Especially as it had been, the strategic goal and management vision of BETA to established foreign subsidiaries in various countries, to support Nigerian businesses abroad (BETA_g2