The literature reviewed shows the importance of competitive advantage not only to a firm but also to a group of firms and to Multinational Companies (MNCs) operating in foreign countries. According to Gupta and Govindarajan, (1991), Kogut and Zander, (1993), knowledge management in MNCs is a major source of strategic competitive advantage. The main reason to attribute to the success and thriving of MNCs is their ability to effectively transfer knowledge across borders. Knowledge transfer in MNCs has become a great leverage and a positive relation to the ability to add into their sets the skills of geographical dispersion, competence and capabilities, this in turn enables innovations in both technology and management skills and forms synergies that can significantly boost the MNCs competitive advantage (Bartlett and Ghoshal, 1989; Cantwell, 1995; Gupta and Govindarajan, 2000; Hedlund, 1986).
H1: Nestle Ltd and Cadburys Ltd operations in Ghana will greatly benefit from the knowledge transfer from other subsidiary sisters companies thus boosting their competitive advantage
In the past, firms’ internationalization has been considered as being propelled by the desire to exploit ownership advantages as advocated by Dunning and Narula (1995) and or accessing low cost resources and raw materials, adapting to existing products and processes to different demand and market conditions across economies. More literature shows that the ability of MNCs and their subsidiaries to generate more self knowledge depends on the local knowledge sources (Cantwell et al., 2000). Therefore relationship between the subsidiaries and the local research institutions is very crucial for the creation of knowledge, as well as linking with the customers, competitors and market research institutions as this is necessary in creating a basis for existing products and introducing new technologies (Pearce and Papanastassion, 1999; Zander, 1999). This has been an active debate over the last few decades focusing on the idea of a MNC creating home based competencies and investing in them with an aim to create new skills and competencies which are best for identifying opportunities in the approach of a new market. Whatever form of entry mode decided by the exporter, the marketing organizations or intermediaries will have to be agreed upon, after carefully taking all factors into consideration (Albuam & Duerr 2008).
H2: Identifying with local research centers and tapping into available market information sources helps an MNC to identify opportunities in an international market
The decision to invest or to do business in a foreign economy should be guided by the potential of the market in the economy an MNC seeks to invest in. Graham (2005) stated that the first criteria for identifying investment options in a foreign market largely depends on answering the question, “Can consumers and end users afford its products and what potential for success does the business venture have?” Wolfe and Snyder (2003, p.25) propose that one should have an astute business acumen to identify and implement opportunities in this age of new customer majority. The success of a business’ effort for internalizations is dependent on many parameters. According to Luo (1998) the host economy specific know-how is a major driving force behind international expansion. Fahy (1996, 24) states that there seem to be a growing discovery that the boundaries between econmies and markets, goods and services have become more blurred and that these determining factors contain significant service components. This is the basis for market integration and standardization.
H3: Market integration and standardization are factors to consider when venturing to international markets as they encourage differentiation.
CHAPTER 3: METHODOLOGY
This chapter is broadly divided in two parts. First is the methodology section which will briefly explain what kind of research strategy and approach is used, this will help build a background to the study design. The second part will delve in detail on the study design and the data collection tools employed. It will highlight the data collection method in this case interview, construct measuring tools, sample selection and data collection. Finally ethical issues and reliability will be addressed.
Research Approach and Strategy
This research is tasked to find out how international marketing strategies help firms achieve competitive advantage with an emphasis on UK companies and their success in the Ghanaian market. The focus will be on Nestle Ltd and Cadburys Ltd. The research has been guided by three hypotheses that were generated and subsequently examined. The hypotheses were examined via an empirical study and finally the theory was revised after analysis of the study’s findings.
The research was based on a qualitative approach. This was so preferred because it described both implicitly and explicitly the purpose of the study. The qualitative research approach was also preferred because of its inflexibility and ease in making meaningful comparison of responses across participants and study sites i.e. the two different MNCs in Ghana. It was also chosen because the questions posed by the interviewer were open-ended. Hence the respondents would give rich, meaningful, culturally salient and explanatory responses. The other mode of data collection apart from interview was via case studies that are carried out on Nestle and Cadburys Ghana Ltd.
For this research, secondary data was collected from books, journals and articles, and most of the data collected was qualitative in nature. The emphasis was put on journals that mainly included: ebsco, questia, emerald, and phoenix. These were preferred as they are strictly peer reviewed and hence reliable. Most of the journal articles used were good quality academic journals, which were well referred by other authors and were mostly empirical in nature. Finally the time frame in terms of year of publication for the articles, journals and books of the secondary sources materials was also considered so that the findings were not solely based on a certain period in time or too old to form a conclusive report of current experiences.
Secondary data enriches a study but it is not solely sufficient and the collection of primary data forms an integral component of every study. Primary data is a key component that greatly supports the present research objectives as required of the study. Moreover primary data specifically addresses the issues raised in the research questions. The primary data was collected via administration of interviews as the study was qualitative in nature. Open-ended questions were posed to recruited respondents. In each company, open-ended protocols were used to interview managers and employees from the marketing departments. The innterviewees comprised of 5 managers and 25 employees from each company. Each interview lasted between thirty minutes to one hour. It was conducted face-to-face in English and recorded immediately. Questionnaires were also administered to employees in various departments and these included: marketing, accounting and production. Definite answers and hence results were generated. This greatly enhanced the process of data analysis. 100 respondents were recruited from each company to fill the questionnaires.
Since it was only two companies that were under investigation, there study’s scope comprised of personnel from both companies. 5 managers and 25 employees from each company’s marketing department were chosen randomly for the interview. This ensured no need for further sampling as the responses got from the respondents of choice was deemed to be representative enough of the entire work force in both companies under study.
The data collected from the interviews and the recording was rechecked for accuracy by the interviewer and recorded. Simple summaries of the data were made using simple graphical analysis thereby describing the ‘what is’ of what the data showed. Inference on the data was sought by classifying the data on the likeness of a response by a group of respondents, the hypotheses were tested against these inferences and summaries were made.
Ethical procedures were followed and ethical principles observed in collecting, analyzing and presenting the data to the study. All personal information was kept confidential and the identity of respondents was anonymous as evidently noted in the introduction of the interviewer to the interviewees. Further, the research employed the voluntary mind of participants and no response was coerced or forced from an interviewee and the responses were also held in confidence. They freely decided whether or not to answer a question and there was no bias in terms of gender, race or cultural orientation. Lastly identifiable traits of the respondents like names, address, phone number or any other data that would breach the confidentiality or anonymity of the respondent were not asked from the respondents thus safeguarding their identities.
The study faced limitations in terms of sample size since only two of the MNCs subsidiaries are in Ghana. The number of respondents was also low due to the fact that not many of them were available for the interview and the subsidiaries management only allowed the initially stated 25 respondents from the marketing departments. The limited time was also a barrier since the open ended interviews evoked conversation between the interviewer and the respondent giving more detailed and in-depth insight about the study issue. If more time was allocated, more respondents would have given more responses and more data would have been generated to enrich the study. Finally the research faced another hurdle in analyzing the data since it was all qualitative and it proved difficult to quantify and subject to statistical analysis. Consequently there was no standard/reference point for statistical analysis. Having open ended in-depth interviews with the managers made the analysis more complex since every response was unique and it was difficult to pool responses for data analysis. Fortunately, this was counteracted with data generated from the questionnaires.