Strategies and Barriers to Internationalization of Nigerian Agricultural SMEs

The assignment discusses the challenges and opportunities faced by small agricultural businesses in expanding their operations internationally. The speaker, who runs a poultry farming business, shares his experiences and insights on the potential benefits and limitations of internationalization. He notes that local market competition is high, but there is a possibility for growth through expansion into other areas within Nigeria or even internationally. However, he highlights the need for investment in technology, standardization, and finance to meet international standards and demands. The speaker also emphasizes the importance of government support and loan facilities for small businesses like his own. He concludes that with the right strategy, contacts, and infrastructure, agricultural businesses can benefit from internationalization through growth, higher profits, and brand recognition.

Running Head: Internationalization
STRATEGIES FOR SMALL AND MEDIUM ENTERPRISE
INTERNATIONALIZATION AND BARRIERS OF
INTERNATIONALIZATION AND EXPORT PERFORMANCE OF
LOCAL AGRICULTURAL BUSINESSES IN NIGERIA
Name:
Year:

Internationalization
Abstract
Internationalization is an effective strategy that enables the small and medium enterprises
(SMEs) across the world. Entering the international market enables the SMEs to tap the larger
customer base and increase the profitability. However, for operating in the international
market successfully, the businesses need to have innovative strategies and advanced
infrastructure. The SMEs often lack adequate resources and innovative ideas and so, these
organizations fail to operate in the international market successfully. The agricultural SMEs in
Nigeria face intense competition in the domestic market. So, the organizations are focusing on
entering the international market. In the current research, survey is conducted among the
professionals who are involved to the agricultural businesses. The findings of survey, after
thematic analysis of the responses, indicate that the lack of knowledge, financial resources,
innovative ideas and advanced technology are the key barriers to internationalization.
Operating in the international market would be easier if the businesses invest in e-commerce
technology and market research.
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Acknowledgement
I would like to express my special thanks of gratitude to my teacher who gave me the golden
opportunity to do this wonderful project on the topic, STRATEGIES FOR SMALL AND MEDIUM
ENTERPRISE INTERNATIONALIZATION AND BARRIERS OF INTERNATIONALIZATION AND
EXPORT PERFORMANCE OF LOCAL AGRICULTURAL BUSINESSES IN NIGERIA, which also helped
me in doing a lot of Research and I came to know about so many new things I am really
thankful.
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Contents
Abstract......................................................................................................................................... 2
Acknowledgement......................................................................................................................... 3
Chapter 1: Introduction................................................................................................................. 6
1. Introduction........................................................................................................................... 6
1.1 Aim and Objectives of the Research.....................................................................................7
1.2 Research Question............................................................................................................... 8
1.3 Outline of the Research........................................................................................................9
1.4 Literature Review............................................................................................................... 10
1.5 Methodology......................................................................................................................11
1.7 Barriers of Internationalization and Export Performance of Local Agricultural Businesses in
Nigeria...................................................................................................................................... 12
1.8 Conclusion.......................................................................................................................... 13
Chapter 2: Literature Review.......................................................................................................14
2.1 Introduction to The Nigerian Agribusiness industry...........................................................14
2.2 Internationalization and its benefits in SMEs.....................................................................15
2.3 Barriers of SMEs Internationalization.................................................................................15
2.4 Need for internationalization.............................................................................................21
2.5 Conceptual framework.......................................................................................................23
2.6 Organization Readiness......................................................................................................27
2.7 Conclusion.......................................................................................................................... 28
Chapter 3: Research Methodology..............................................................................................29
3.1 Introduction....................................................................................................................... 29
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3.2 Research Objectives........................................................................................................... 30
3.3 Research Question............................................................................................................. 31
3.4 Research Method...............................................................................................................31
3.5 Research Design................................................................................................................. 32
3.6 Research Approach............................................................................................................ 33
3.7 Research Philosophy.......................................................................................................... 34
3.8 Sampling Technique........................................................................................................... 36
3.9 Data Collection Technique................................................................................................. 37
3.10 Data Evaluation Technique...............................................................................................38
3.11 Ethical Consideration....................................................................................................... 39
3.12 Validity and reliability.......................................................................................................39
3.13 Limitation of study........................................................................................................... 40
CHAPTER 4: DATA ANALYSIS........................................................................................................42
4.1 Introduction....................................................................................................................... 42
4.2 Presentation of Data.......................................................................................................... 42
4.3 Analysis.............................................................................................................................. 50
4.4 Conclusion.......................................................................................................................... 52
Chapter 5: Conclusion..................................................................................................................53
5.1 Introduction....................................................................................................................... 53
5.2 Linking to Objectives.......................................................................................................... 53
5.3 Recommendations............................................................................................................. 57
5.4 Chapter Summary.............................................................................................................. 58
Appendix 1: Survey Questionnaire and Responses......................................................................69
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Chapter 1: Introduction
1. Introduction
Small and medium-sized enterprises are some of the most effective sources of growth for
advanced industrialized countries and for emerging countries alike. The underlying growth
prospects in such kinds of enterprises are huge compared to large organization. SMEs have
gained recognition over time with their own characteristics (Dimitratos et al., 2016). The
agencies are considered as one of the large parts of the private sector of the developed and
developing countries. However, it was seen that SMEs have a causal link with economic
development as there is evidence that show that small firms usually faces larger growth
constraints than the big firms due to less access to external finance (Eniola&Ektebang, 2014).
Internationalization is usually denoted by big business; however, it is slowly being carried out
by the small business as well with their limited resources (Dimitratos et al., 2016). The reason
behind internationalization is to increase sales, diversify associated risks and operation, getting
better clients, reduces costs and other benefits for business. The agricultural sector of Nigeria
has always faced with issues such as the lack of development, marketing problems, unstable
prices and others (Eriksson et al., 2015). Nigerian cultivation perseveres through the disasters
as much as possible for the vegetables, 30% for roots and tubers, and 20% for grains (FMARD,
2001). Internationalization will help them to improve on these potential barriers so that they
can experience continuous growth. The agricultural sector of Nigeria is experiencing a lower
development and growth rate over decades with an average growth rate standing at 6 to 8
percent per year. Thus, it became necessary to research the strategies that small and medium-
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size enterprise like the agricultural production of Nigeria can use to promote their
internationalization process and solve the issues they are facing such as growth sales and
profitability.
1.1 Aim and Objectives of the Research
The aim and objectives of the dissertation will help in offering a clear view to the research on
strategies for small and medium enterprises internationalization and barriers of
internationalization with reference to export performance of local agricultural businesses in a
developing country like Nigeria and areas that need to be achieved through thorough research
and analysis.
AIM: The research aims at examining the strategies that SMEs can use to internationalize the
local agricultural production in Nigeria. The research focuses on identifying the ways in which
the small and medium sector enterprise can grow internationally. The research also aims at
how the SMEs in Nigeria deal with the financial constraints. This study will explore whether
similar strategies can be implemented in the SMEs of Nigeria.
OBJECTIVES: The objectives of the research are as follows:
• To study the internationalization process: Industrialization has various meanings as it is
understood by different people on a different sphere. Understanding internationalization will
be the first and the foremost aim of the paper as without understanding this term it will be
difficult to set the strategies that can help attain the industrialization.
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• To examine the internationalization of SMEs: Industrialization of the SMEs will help in offering
a close link between these two terms as industrialization is mostly considered to be adopted by
large firms. Thus, getting it clear that industrialization can also be used by SMEs to attain
growth is also beneficial and possible in today’s world. Thus, this objective aims at explaining
the ways in which internationalization is also attached with SMEs.
• To investigate the barriers and challenges that SME local agricultural production in Nigeria can
use to internationalize: The objective that will accomplished through primary research and also
help in suggesting the strategies for SMEs in Nigeria. The objective will allow coming with the
complete outcome of the paper as it will help in knowing the strategies that are already used by
some of the SMEs in Nigeria.
1.2 Research Question
The research question for this research will be centered on; what are the barriers and possible
strategies that SME of local agricultural production in Nigeria can use to internationalize?
Rationale for the Study
The paper aims at explaining industrialization and the strategies that can be used by the SMEs
in attaining the industrialization over time. The study focuses majorly to the SMEs of Nigeria
and the strategies that are beneficial for them. The paper is beneficial in many ways as
internationalization and globalization are one of the major motives of every company as it
improves competition and helps in surviving in the competitive world. Further, the strategies
that will be found in the outcome of the research will not only help the small firms of Nigeria,
but it can also effectively be used by any other SMEs operating worldwide, thus, and the
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rationale of the study is that it offers worldwide benefit. Moreover, Nigerian firms will be able
to benefit from the research outcome as many of them still thinks that it is difficult for the SMEs
to expand their market.
1.3 Outline of the Research
The underlying sector offers a structural view of the paper in which the entire research will be
conducted along with the methodology used. The paper will be divided into different chapters
with each chapter having their own roles and objectives. Chapter one is the introduction part
that offers a description and purpose of the research is has been conducted. Chapter two is a
literature review that is formed after analyzing and studying past and current literature on the
topic. Chapter three is a key stage of the research that states the methodology that the
researcher used to collect the data for the study and the ways it used to analyze the data for
the final result. This chapter is followed by chapter four which presents the results and finally,
the discussion chapter showing all the possible outcome of the primary research conducted.
The last chapter is the conclusion and recommendations chapter, which finalizes the range of
outcome of the research based on the stated objectives.
1.4 Literature Review
Internationalization is the process of planning and modifying the products in a way that can be
adapted by local languages and cultures of other areas. Internationalization is always confused
or compared with globalization in which the expansion of products to internationalize the
market is involved (Eriksson et al., 2015). Knight (2015) has further described
internationalization as an increasing importance of international trade, international relations,
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treaties and other alliances with the global market. Internationalization has various benefits for
the SMEs that can help them grow in a better way. Dimitratos et al., (2016) has explained that
SMEs are able to dispense business risk across the markets they enter. It also helps in
generating increased sales and revenues that can be invested in the technologies and new
production processes. These are the key elements that are required in the growth process. It is
further stated the internationalization allows the enterprise to cooperate with the foreign
companies and get access to better technologies and ability to add innovation in the business.
Lastly, it helps in better efficiency and operational benefits for improving production potential.
Musteen, Datta& Butts (2014) has mentioned that the SMEs try to respond to the cross-border
marketing opportunities offered by the overseas opportunity that is given by their relational
contacts. Thus, business, as well as social networks, are found to be the most important factor
in the internationalization stage of such SMEs (Sui & Baum, 2014). Further, there should be
other elements as well such as business networks, knowledge of the market and others.
Dimitratos et al., (2016) has pointed out that the internationalization of the agricultural sector
has been the major factor in the contribution of the economic health of the industry.
1.5 Methodology
The methodology helps in the research process that can be adapted to collect resources that
can help in investigating the strategies that can be used by the SMEs to adopt
internationalization. The researcher will use a qualitative research design to move forward with
the research. Further, a descriptive design in which a survey process will be used by the
researcher to collect the information on the topic. An inductive research approach will be
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followed as the researcher will induce the data directly from the source. The data collection
method used by the research will be the primary method in which a survey will be conducted
through a questionnaire (Lewis, 2015). The participants of the survey will the agricultural
production companies that have already internationalized over the years to know the strategies
they have used. 10 agricultural production companies will be surveyed that has taken
internationalization and has been successful (Happo et al., 2017). The survey will be done in an
ethical manner with required confidentiality and bias-free responses.
1.6 Essential Strategies for Small and Medium Enterprise Internationalization
Internationalization, as a process of enhancing the utility of a commodity to meet international
standards, ensures that SMEs remain committed to offering the highest levels of quality. The
inclination to extend services to multiple countries cannot be ignored on multiple grounds
(Eniola&Ektebang, 2014). Most profoundly, it is necessary to adopt a continuous and
permanent strategy for increasing the client. The local customers will often not be enough,
hence the inclination to engage other nations. Secondly, most markets are increasingly defined
by highly integrated population such that internationalization has to commence locally.
1.7 Barriers of Internationalization and Export Performance of
Local Agricultural Businesses in Nigeria
The inability to penetrate the overseas markets is one of the biggest stumbling blocks for
countries looking to take advantage of internationalization for growth and development
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purposes. Countries such as Nigeria, or any other fast-growth do not get to choose the kind of
partners to trade with or the extent of partnership (Eniola&Ektebang, 2014). On the contrary,
the desire to take SMEs to the global level commences with the establishment of a local policy
that relies on the nature of the relevant legislation of the other countries (Hansemark, Olsson
&Mollestam, 2016). The underlying challenge may be articulated on the basis of the exporting
barriers which may be acknowledged on the basis of how hard or easy a country manages the
challenges.
On the other hand, unlike the large enterprises, SMEs are characterized by lower resources,
especially regarding finances. Multiple barriers come in handy for countries such as Nigeria
constantly looking to exploit the world markets. Firstly, SMEs will end up having low demanding
potential concerning the underlying competitiveness in the global markets (ZucchellaBrugnoli&
Dal Bianco, 2010). Even with the provision of superior commodities, it will often be difficult to
outdo the already existing players, working on higher scales. Secondly, low resource scale
suggests that the SMEs may fail to match the required demand for certain products in the event
that individual agencies manage to enter the market.
A constrained access to finances also implies that the large enterprises have an upper hand
regarding the production and distribution of various commodities. In this case, SMEs have to
either establish a higher process or settle for minimal returns on investment. Those that
achieve success in the long-run end up taking more time and are constantly frustrated by huge
competition. Many countries adopt the SME system with the goal of enhancing growth and
creating employment. In this case, SMEs from multiple countries converge in the global markets
leading to high competition.
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1.8 Conclusion
Most of the emerging economies continue to acknowledge the criticality of SMEs for
economic growth and development purposes. Such agencies come in handy especially for the
low and medium-income earners, constantly looking for different investments opportunities.
Other than the provision of essential resources, SMEs are also the haven for developing
different ideas as multiple come together to address common needs. The high growth potential
of the agencies is also a subject of consideration given that parties involved target certain
degrees of return on their investments. From the above analysis, it can be concluded that the
research on the strategies for SME in the agricultural sector of Nigeria will help the agricultural
production firms to move internationally in the future. As a fast developing country, Nigeria
stands to gain from internationalization, largely by addressing the underlying barriers of SMEs
internationalization such as domestic government policies, foreign policies of a country, export
tariffs or regulations, availability of resources such as technology, man power, cheap labor and
availability of raw materials.
Chapter 2: Literature Review
2.1 Internationalization and its benefits in SMEs
One of the big benefits for internationalization is free trade. The barriers and the tariffs within
the countries as well as continents provide more freedom in order to import or export various
products from. There is modern technology and the engineering are found to provide the world
with the opportunity for moving the products as well as the information with faster and
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cheaper rate. It also provides the companies in case of the possibility of easily expanding
products and services for the larger customer base. The consumer can achieve the profits from
the free trade as like the companies as they can lower the process for the products as well as
services through the more open market (Baumgartner &Rauter, 2017). It is the ability for
choosing the products and services from the large selection which will push the companies in
case of competing with each other; it will lead the lower prices for other kinds for benefits
consumers.
The labour and the knowledge movement can move around and thus it has provides the
knowledge and skills for the highest bidder. Thus it is easier for future workforces in order to
educate themselves or they will get more knowledge from other places because of the
knowledge movement due to the internationalization (Kotabe& Murray, 2018).
2.2 Barriers of SMEs Internationalization
Some example of SMEs barriers are- financial barriers, managerial barriers, industry and firm
specify barriers and so on. The financial barriers thus have been checked as particularly
significant for the SME where there are the novel products as well as technologies (Cheong,
Song, & Hu, 2016). In this respect, from some past research, it has been found that it holds for
the organization as it relies heavily in the case of advanced knowledge as per the instance from
the research institutes or for the universities. Removing the barriers by implementing the
strategies as those are needed of the hour to make the small and medium agriculture
enterprise effective and healthy (Kotabe& Murray, 2018).
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Types of Barriers:
There are many types of barriers due to internationalization which affects the economy and
business in several parts of the world. Within those there are knowledge barriers, resource
barriers, procedure barriers or the exogenous barriers as described below:
Knowledge barriers
Lack of business knowledge: The local markets in developing countries differ from the
international markets to a significant extent. For succeeding in the international market, the
businesses need strong knowledge base. The SMEs need to consider its strengths and
weaknesses and the uncertainty in international market to develop effective
internationalization strategies. It has been perceived by Hermannsdottir et. al. (2007) that
knowledge can be critical in achieving success in a foreign market. It is the best way to provide
the Entrepreneurial orientation is called the capacity for participating the innovative processes
for attempting the degree for risky ventures as well as taking part with the proactive
developments. It has been characterized that there are some SMEs setting up for
administrations so that they can approach bundling of items related to become the global
purchasers (Meyer & Peng, 2016). SMEs have governed and administered through internal
management, the government along with the medium scale agro-based undertakings. This
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sector has some ability in the making of mass demanded things which are consumed in homes
and ventures.
Other than the financial issues Nigeria has faced the problem in the field of knowledge barrier.
There are four sources which represent this export barrier as it affects the activities which
include the internal resource constraints, exogenous variables, export knowledge along with
the procedural barriers (Fransen, Verlegh, Kirmani& Smit, 2015). These export knowledge
barriers thus refer to the lack in the case of information as it is related to the export activity. As
per the pioneering work which can be defined as the total market knowledge on the basis of
the internationalization, it is needed to assert that there is a lack of knowledge within the
foreign markets which constitute the barrier as it will increase the commitment for
international activity among the company (Genus, Rigakis, & Dickson, 2003). It is also found
that there are many things which are identified as the knowledge barriers, like the lack of the
awareness for the export assistance, the lack of awareness of the benefits for the export
markets (such as higher sales, profits and channel expansion etc), the lack of the knowledge for
the best potential markets and the lack of the qualified staff which has the overall knowledge as
they want to enter the export market.
Resource Barriers
There are several studies which have been identified through the internal resources as per the
impediment as it limits the ability for the firms to export. The following factors which are being
highlighted with the internal resource barriers and there are the lacks of financial resources as
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it is necessary for the fund's requirement as they are initiating the operation of the finance
export. As per Genus, Rigakis& Dickson (2003), in the case of Nigeria, the additional barrier that
is needed to identify as the internal constraints which hamper the export activity. It is needed
to utilize the honouring letters for crediting which has been found due to the lack of personnel
in order to devote the time for the export activities (Genus, Rigakis, & Dickson, 2003).
Moreover, a firm needs a various number of external support resources, like banks which are
willing to support the international activities of the organizations or in the case of local trading
firms which enable export operation of manufacture indirectly.
Lack of Financial resources: The SMEs need significant amount of financial resources to enter
the international market (Ali, 2018). Most SMEs will go to the level of getting loans from the
banks, using their homes as assurance security without considering the last result of losing their
homes with the true objective of developing international markets (Brea Solís, Casadesus‐ ‐
Masanell, &Grifell Tatjé, 2015).‐
According to Goldman (2018), financial problem is a potential hindrance or blockage in taking
decision for going international operation. In his research study, Goldman (2018) has
mentioned that the organization needs to strengthen its financial condition in order to
effectively go for international operation. The discussion indicates that the main reason for this
is the lack of financial planning. Hence, it can be argued that SMEs need to have proper
financial planning in a way to avail the opportunity to operate at an international level.
Procedure Barriers
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It is needed to identify the limit of export activities as per the factors which are pertaining to
the procedural barriers. As per Elkington (2018), the SME’s are found to be interested in case of
exporting their faces with the number for the procedural barriers. Those procedural barriers are
found to relate with the activity itself as it has the origins for the firms within the domestic
market for the foreign markets (Elkington, 2018). As per Baumgartner &Rauter (2017),
procedural barriers are subdivided within two types, one is controllable and that can be easily
resolved and another is not controllable which requires the case-by-case decisions. The
businesses need to overcome the procedural barrier through the experience, like the non-tariff
barriers. It is based on the relevant export that the literature indicates among the procedural
barriers which include the following issues, such as, red tape and the documentation. This red
tape or the bureaucracy can be identified as the obstacle for exporting, importing tariffs like
there is another factor which is identified for stumbling the block of exporters. There are the
non-tariff barriers like the establishment of the various quality control as well as the safety
standards where it occasionally involves the requirement for adapting the products as per the
needs of various foreign markets transportation (Baumgartner &Rauter, 2017). There are also
some distribution difficulties for the foreign markets as well as the domestic markets as it is
found to limit the ability for the exporters. There is the difficulty for finding the trustworthy if
distributor for Nigeria.
Exogenous Barriers
It is finally identified that as per exogenous barriers which are needed to obtain the uncertainty
of the international markets. It is largely due to the activities for the other players within the
market and mainly it is due to the activities for the other players within the market, like the
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competitors, supply and demand as well as the foreign governments. It means there are
variable transcend which controls the exporting company. There are the factors, like the
powerful competition as it can be faced the foreign markets which have been cited at this
context. There is the political instability for the foreign markets as well as the risk of losing the
money (Fransen, Verlegh, Kirmani, & Smit, 2015). There is the study which is highlighted by the
dynamic nature for the barriers for exporting. So it has been identified consistently that the
variations within the barrier as it perceptions by the export stage within Nigeria.
2.3 Need for internationalization
According to the viewpoint of (Peng, M. W. 2017), as there are a lot of barriers to the small and
medium scale agribusiness enterprises, it has been planning for internationalization. The
researcher has mentioned some of the barriers like financial barriers, human resource barriers,
and specification of the firm as well as industry (Peng, M. W. 2017). It is evident that if the
country is already rich in agriculture production then enterprises will face intense competition
from those SMEs and hence it will become one of the barriers to making entry. In a country like
USA and Canada If the small and medium agri-based enterprises want to make an entry as FDI
then they have to face a problem related to the availability of the cheap human resource. It is
because in the United States of America and in Canada the cost of labour is more as compared
to developing countries (Ali, 2018). But if talking about technological advancement and
modernization, United States of America, Canada and France are vibrant markets with tougher
competitions. It would be difficult for the small and medium scale agri based enterprises to take
a final decision regarding the entry into United States, Canada and so on. Hence, it can be said
that the decision regarding the internationalization can be taken according to the demanding
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situation of the particular enterprises. If the enterprise is enough strong and has sufficient
financial resources then it may plan to go international operation at large (Baumgartner
&Rauter, 2017). Whereas if the enterprise lack the proper financial resources and capabilities
then it needs to drop the plan to make the entry into a developed nation. In this case, it may
take the decision to enter into China, India as in this country it may get access to cheap labour
and resources. Which will give strategic as well as competitive advantages to the particular
small and medium scale agri based enterprises?
For Example if small and medium agricultural enterprises from developing countries want to
enter into the USA as the part of internationalizing their business and setting up operations in
that foreign market, then they need to first look into the matter of availability of labor as in the
USA they will not get cheap labor, but at the same time, the USA will help them with advanced
technology and equipment's. So here firm need to analyze the costs and benefits than taking
the final decision of making entry into the USA market at large.
According to the viewpoint Ibrahim (2017) the small and medium scale agribusiness enterprises
may use the location advantage theory while planning to go international. The location-specific
advantage is thus considered as the ability for the individual, company as well as the economy
for conducting better activity related to the location. It is because it will help them in analyzing
the strategic as well as a competitive advantage in an effective manner (Ibrahim et al., 2017).
The research conclusion of the researcher highlights that Location advantage theory helps the
organization is going to international operation successfully.
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Additionally, as per Okpara and Pamela (2012), it has been demonstrated that In case of SME,
there is an enormous contribution for creating the employment in developing countries. It has
been further found that in SME there is 20 to 45 per cent of the full-time business. Moreover,
there is 30 to 50 per cent for the rural household earnings (Brea Solís, Casadesus Masanell,‐ ‐
&Grifell Tatjé, 2015). In some cases, the performance for SME will be low as per the‐
expectation. It would produce the sound in case of improving within the bigger economy. In
South Africa, SMEs are found that 80 percentages of the formal business and other 95 per
cent of the overall business division are included. There is 46 per cent for financial activities
including 84 per cent of private labour are included in this sector (Chan & Huff, 2014).
Intellectual property: The lack of intellectual property protection is one of the key barriers to
the businesses for internationalization (Meyer & Peng, 2016). The SMEs offer unique products
and services which provide them competitive advantages. Lack of protection to the intellectual
property increases vulnerability of the products, services or the logos to be copied illegally. As
an effect, the SMEs are exposed to a higher risk of losing the competitive advantage. The SMEs
needs to check the form of IPR in practice in situations where they employ innovation. Those
firms are found significantly in that respect. So SMEs is needed to check that it is not affected
by the financial constraints (Meyer & Peng, 2016). Those firms which are found to engage in
both the case of innovation as well as internationalization is found as the innovation activities
which are hampered by the financial issues.
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2.4 Conceptual framework
The conceptual framework has been set up in the below figure 1 and figures 2 with the specific
components as they impact in case of agricultural SMEs for the export performance. Therefore,
there is the conceptual framework hypothesizes that there is the commitment for the
institutional components in order to have the impact over the entrepreneurial orientation
along with the global system capacities for Agricultural SMEs as per the export performance
(Dell'Era, Landoni, &Verganti, 2015). There are the internal resources for the business for
having the impact in case of agricultural SMEs performance which is the most respected
entrepreneurial orientation for the firm as it is needed to intellectualize for the innovation,
reactiveness along with the risk-taking activities for the company. Therefore, the institutional
environment components would find as the influence for the impact in order to EO for the
export performance. Thereby, it is the conceptual framework which provides the general
structure in case if investigational analysis along with it shows that there are the
diagrammatical estimation connections which are needed to induce for the study question
(Elkington, 2018). Therefore, the hypotheses are found to produce for each kind of research
question. There are the hypotheses which as it can be produced for many kinds of research
questions. It is the study research model which is needed to assess in which way the variables
will be accompanying in order to determine the agricultural sector for the performance of
SME’s (Whyte &Lohmann, 2015).
There may be the internal resources for the SMEs and it is the EO of the organization. Those
resources are as risk-taking, innovative along with proactive.
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On the other hand, there are some Institutional environmental factors which are related to the
government, legal along with wider factors (Fransen, Verlegh, Kirmani, & Smit, 2015).
As per the prevailing theory, there is the variable which is found to be probable for affecting the
export performance as it is measured.
There are three other types of research questions which are needed to ask within the model. So
the framework that is identified the effect for the institutional environment factors, like the
government policies with the impact for the EO as per the agricultural SME with the export
performance (Genus, Rigakis, & Dickson, 2003). In that case, the framework development is
found to be imperative as it will be ascertained along with describing the main factors which
will influence the variable for dependent and that suggests that there is the development in
case of the policy system as it will address the causes (McAdam, Bititci, & Galbraith, 2017).
Therefore, the firm resources like EO which is emphatically or the contrarily impact with the
performance of the company. It is further observed that there is the emerging economy like
Nigeria, institutional environmental variables which will influence for the impact for the
entrepreneurial orientation for the agricultural SMEs (Goldman, 2018). It is the entrepreneurial
orientation in case of SME where the capacity for the institutional environmental elements
which is needed to be relative with the significant enough as there is the impact on the export
performance (Green, 2016).
In case of the export undertakings for the firms which is considerable measurement as it will
focus in respect to the movements with the substantial multinational companies and it is
needed to assist for building up the knowledge for internationalization for small business.
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Further, there is a lot of analysis which inspects the elements for the export performance as it
has been contemplated with the entrepreneurial orientation along with the institutional
environment as per the government policy (Kotabe& Murray, 2018). This study thus explores
that there is the institutional environment component which influences the effect for the
orientation in an entrepreneur. Thereby the conceptual frameworks are drawn in figure 1 and 2
as follows:
Figure 1: Conceptual Framework for Institutional Environment in respect to the
internationalization
Source: (McAdam, Bititci, & Galbraith, 2017)
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Figure 2: Conceptual Framework of barriers in SME
Source (Elkington, 2018)
2.5 Organization Readiness
Therefore, the organization will go abroad for carrying out foreign activities and supports the
model of internationalization. It is, on the other hand, refers to the gradual unidirectional
learning process within the continuum and thus it will support the well-known stage of
theories. In this case, the internationalization has meant the great possibility for the firms
where it will expand the operations. Thus the readiness of the firm is considered as the concept
for identifying the firm which is ready to internationalize (Zoogah, Peng &Woldu, 2015). Also,
the internationalization readiness of the firms refers to the focal point for the research
performed on this basis.
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2.6 Internationalization of SMEs from developing countries
Osei-Bonsu (2014) mentioned that the SMEs in developing countries show limited interest to
enter the international market. Osei-Bonsu (2014) also mentioned that the SMEs from the
developing countries show less tendency to develop network with other businesses. Some
SMEs from the developing countries sometimes adopt the born-global model for
internationalization although most of these organizations prefer using traditional ways such as
exporting. The born-global model helps the organizations to operate in the international market
from the initial days of operation. As per the study conducted by Osei-Bonsu (2014), the key
success factors for the internationalization process are managerial capabilities, organizational
processes in the international market and the networking abilities. The study also indicates that
production capabilities of the SMEs also play an important role to get success in the
international market.
2.7 Conclusion
There is no doubt that SME is assumed or plays a vital role in cases of economic development
and developing nations. However, the barriers that are associated with internationalization of
SMEs is regularly inhibited with the lack of resources, their know-how as well as the experience
which will effectively take the interest for different types strategies for internationalization
exercises which includes exporting. Therefore, in the case of SME, it is the developing nations
and there is a high export orientation and it is ready to improve. It is further overtaking the
contenders along with it will make the same for the figured export risks in an effective way in
order to have beneficial customers for the global markets. There is the low EO. Further, the
SMEs are found to build up the hierarchical capacities along with the global experience for well-
doing a thing in case of export the activities as regardless of difficulties which may take in
compel for endeavours within the local market condition. Other than any doubt, it is needed to
go up against the difficulties along with outperforming then for the development as well as
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flourishment. So, within Nigeria, it is the SME export which is being worked in the export
markets. For this reason, the governments create the tax incentives measurement as well as it
will take the license which provides the permit that will be more SME’s friendly. It is allowed
the frameworks for making it less demanding for the export of SME.
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Chapter 3: Research Methodology
3.1 Introduction
Research is systematic along with the scientific search for the relevant information. It also
includes the careful investigation for exploring the ideas as well as searching new facts about
the knowledge. It is a way to resolve the problem of research in a systematic way and used to
identify, select, process as well as examine the information about the topic. In a dissertation,
the methodology section provides permission to the reader in examining the overall validity
and reliability of the study. The selection of methodology to use will be based on the research
questions, a formulation which is informed by the research perspective (Mackey &Gass, 2015).
Methodology helps in understanding the products of scientific inquiry and the process itself. It
having the aim of describing as well as examining the methods, by offering lights on the
limitations and resources, clarify the presuppositions along with the consequences. Moreover,
they are associated with their capabilities in front of the experts who have the effective
knowledge (Taylor et al., 2015). This assists in developing a critical and scientific attitude
disciplined thinking as well as observe the things effectively. The methodology section helps in
enriching the practitioner and their practices which provide chances to effective study. As the
consumers of research output assist in inculcating the capability to examine as well as utilize
the results of earlier research with the reasonable confidence and also help in making the
rational decisions (Flick, 2015).
The current chapter describes the research type, research design, approach, philosophy,
sampling technique, collection and analysis of data, validity and reliability and ethical
consideration in the study.
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3.2 Research Objectives
• To analyze the meaning of internationalization
• To evaluate the internationalization of SMEs
• To examine the strategies for the SME Internationalization
• To investigate the barriers and challenges that SME local agricultural production in
Nigeria may use to internationalize.
3.3 Research Question
• What are the barriers and possible strategies that SME of local agricultural production in
Nigeria can use to internationalize?
3.4 Research Method
Research method refers to the strategy which is used in implementing and executing the plan.
It is necessary that researcher need to select an appropriate research method which help in
conducting the research effectively and proficiently. Research methods are the strategies which
are utilized in the collection of data in order to uncover the new information (Lewis, 2015). Two
types of research exist. They are;
1. Qualitative: It is a logical technique for perception in social affair the non-numerical
information. This sort of research portrays the implications, ideas definitions, attributes, images
alongside the depiction of things yet not to their tallies or measures. The three normal
subjective strategies are member perception, inside and out meetings, and center gatherings.
Every technique is explicitly suited for acquiring and gathering an explicit kind of information
(Ary et al., 2018).
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2. Quantitative: In this research method is emphasizing on the objective measurements
along with the statistical or numerical examination of a collection of information through a
questionnaire and survey. Some distinctive characteristics of quantitative research include
structured tools and it helps in collecting in-depth along with the actionable data from the
survey respondents. It is affiliated with the ideas from the scientific method that is theories and
hypotheses. It is necessary to include the experimental control and manipulation of variables
for measurement (Bryman, 2017).
The researcher will use qualitative research to move forward with the research as this type of
research in conducting the individual interviews which help in exploring the experiences, ideas,
perspectives and situations with the small number of respondents. The methodology helps in
the research process that can be adapted to collect resources that can help in investigating the
strategies that can be used by the SMEs to adopt internationalization.
3.5 Research Design
The research design incorporates the arrangement of techniques and systems which is utilized
in gathering and looking at the proportions of the factors which is determined in the
exploration issue. A research design refers to the arrangement of conditions and collections
that is descriptive, correlational, semi-experimental and experimental. In the research design
method, both the variables are included whether it is dependent or independent. This will help
in attaining the goals and objectives (Lewis, 2015).
Descriptive: It is a logical strategy which incorporates the watching and depicting the conduct of
the subject without effect on its way. It is a sort of study which is structured in portraying the
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members in a precise way. This examination helps with depicting the general population who
partake in the investigation.
Exploratory: This plan of research is extremely productive. It gives examination so present
deterrent can be inspected in an appropriate way (Meyers et al., 2017). This exploration helps
in doing a successful examination with the goal that advancement or enhancement of pleasing
so compelling choice can be made.
Experimental: This plan is exceptionally powerful and the scientist is utilized based on enhanced
quantitative techniques. In this examination, an in-depth investigation is performed for quite a
while with the goal that objectives can be cultivated. It includes the set of factors are kept
steady while the other arrangement of factors are estimated as the subject of the examination
(Marczyk et al., 2017).
A descriptive design in which a survey process will be used by the researcher to collect the
information on the topic. Descriptive research design refers to the scientific method which
include observing as well as describing the behavior of a subject without influencing it in an
effective way. This research design help in understanding the specific situation with the
identified population over a period of time.
3.6 Research Approach
It is a plan along with the procedure which comprises of various strides of expansive
presumptions to the definite technique for accumulation and social occasion of information,
analysis as well as interpretation. The approaches related to research based on the nature of
the research problem which needs to be addressed.
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Research approaches should be classified into two parts that are inductive and deductive. The
deductive method works from the more general to the specific as it is said to be a top-down
approach. This approach starts with a big picture. It assists in breaking down from there into
different and smaller segments. This approach is simple as well as not data-intensive as it relies
mainly on the historical data and it is opposite to bottom up approach.
(Marshall et al., 2017). In this, the researcher made the hypothesis from the theory, then
according to the hypothesis, an observation made and at last made the confirmation. The
inductive approach works also an ineffective way by moving from specific observations to the
broader generalizations and theories and said to be a bottom-up approach. In an inductive
approach, first need to make an observation, then according to observation patterns need to
prepare. Then with the patterns, the hypothesis needs to prepare and at last, the theory can be
prepared. Deductive method assists in deriving the new conclusions from the fundamental
assumptions as well as from the truth which is established by the other methods
(Sekaran&Bougie, 2016). It includes the procedure of reasoning from certain laws which are
assumed to be true. Inductive method expecting the economists to be an economic historian
which assist in collecting the materials made the generalizations and verify the conclusions by
applying it into different events.
An inductive research approach will be followed as the researcher will induce the data directly
from the source. It is an effective method of reasoning in which premises are viewed as
supplying the effective evidence for the truth and honesty of conclusion. With the conclusion of
deductive argument is certain, truth may be probable and it is depending on the given
evidence. While selecting the inductive approach by using the thematic examination for study
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which determine the objective of study to obtain an understanding on phenomenon. It does
not provide focus on testing the hypothesis.
3.7 Research Philosophy
Research philosophy refers to the manner by which data related to marvel should assemble. In
this, data should be established on doubts and that should be considered by the expert.
Research philosophy is the belief which helps in identifying and examining the information. This
assist in conducting the effective research and research can be conducted as per the
assumptions. It ought to be isolated into two sections which incorporate interpretivism and also
positivism (Hughes & Sharrock, 2016).
Interpretivism is a type of subjective system as it depends upon both the prepared specialist
alongside the human subject as the instruments need to quantify each and every phenomenon
and includes both observation and interviews (Hughes & Sharrock, 2016). It prefers the
humanistic qualitative method and includes the researchers to interpret the elements of study
which integrates human interest.
Positivism depends on logical research and dependent on the fund and also factual. Positivism
includes the control of reality with the assortments in only a lone free factor which help in
recognizing regularities and besides need to outline associations between some constituent
components of the social world (Padilla-Díaz, 2015). Positivism has a long and in addition rich
chronicled convention. It is embedded in the overall population that instances of data are not
grounded in positivist by essentially rejected as logical thus it is invalid.
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In this research, interpretivism philosophy need to be used as it has a tradition that is no less
glorious than that of positivism, nor it is shorter. Interpretivism philosophy is selected because
it is associated with the philosophical position of idealism and also used to group together
diverse approaches which include social constructivism, and phenomenology as it rejects the
objectivist within the world of consciousness.
3.8 Sampling Technique
It is a procedure which is utilized in the statistical analysis in which predetermined numbers of
observations need to be taken from the large population. The methodology which is utilized in
sampling from the larger population depends on the type of analysis being performed but it is
categorized into different parts that are random as well as systematic sampling.
In front of the researcher, there are diversified kind of sampling techniques which incorporates
irregular, stratified and non-stratified sampling. In this research, researcher is using random
sampling as is the basic technique where researcher select the group of subjects for study from
a larger group. Each individual is selected by chance and each member has an equal chance of
being included in sample (Yang et al., 2018). The goal of this investigation is to identify the
strategies for small and medium enterprise internationalization and barriers of
internationalization and export performance of local agricultural businesses in Nigeria.
Sampling helps a lot in conducting the effective research as it is the important factors which
determine the accuracy of the survey result. If the researcher goes wrong in selecting a correct
sample, then it reflects the final result. There are a lot of techniques which assist in collecting
the samples which rely on the needs and situations (Etikan et al., 2016).
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In this research, criteria for selecting the individuals is random sampling by obtaining the
exhaustive list of a larger population and then select as it includes the certain number of
individuals to comprise the sample. It describes the unbiased representation of total population
and if the sample does not represent the population then the variation said to be as sampling
error. The participants of the survey will be the agricultural production companies that have
already internationalized over the years to know the strategies they have used. Agricultural
production companies will be surveyed that has taken internationalization and has been
successful.
3.9 Data Collection Technique
Data collection helps in portraying the device alongside the system and that ought to be utilized
to gather data alongside this, they need to distinguish the factors and that should be estimated.
This strategy is isolated into two techniques which incorporate the primary and secondary
sources. The primary source includes a questionnaire, survey or interview but secondary source
involves books, journals or articles.
Primary sources include the original materials on which research is based. Primary sources are
said to be as first-hand testimony along with the direct evidence which assists in concerning a
topic under the consideration (Miksza et al., 2018). In the primary source, they are presenting
the data in its unique shape neither deciphered, consolidated and analyzed by alternate
essayists. Regardless of whether the source if essential as it tends to be dictated by the viable
way which is utilized by the specialist.
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Secondary sources assist in offering the interpretation as well as analysis depends on primary
sources. It assists in offering the effective support on the specific thesis as well as argument and
persuade the reader in accepting to the certain the point of view (Townsend, 2016). Such works
are included in the different steps which are removed from the event which assist in attaining
the benefits.
The data collection method used by the research will be the primary method in which a survey
will be conducted through a questionnaire. The survey will be done in an ethical manner with
required confidentiality and bias-free responses.
3.10 Data Evaluation Technique
The information or data which is gathered through research by utilizing a poll or different
systems. Data evaluation and analysis technique refer to the process which assists in
determining the final products which aid in meeting the original objectives of the statistical
activity, in terms of the reliability from a correctness, timeliness and different point of view. It
provides the permission to the users to better the decipher review results alongside the office
which assists in improving the quality of its surveys (Peters et al., 2015). This will help in making
the effective decisions and techniques of examining the data or information in the absence of
collecting the primary information by the diversified patterns.
Qualitative: It incorporates the point which isn't cover and also comprehend the master plan by
embracing the fitting information which portrays the data.
Quantitative: It is a piece of information examination strategy as it is a deliberate methodology
which helps with doing examination amid the numerical gathering of information and in
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addition specialist changes that what is gathered and watch the numerical information (Dotoli
et al., 2015).
In this research, the researcher is using the qualitative technique as in this researcher need to
be done thematic analysis which assists in conducting effective research and collect the
appropriate information. It is the effective and common forms of analysis in qualitative research
as it emphasizes the examining and recording the patterns within the data. As themes are
patterns across the data sets which are essential and important to the description of
phenomenon as well as associated to the specific research question.
3.11 Ethical Consideration
In ethical considerations the exploration is basic as morals are the standards or gauges for
direct which assist in creating the difference between the right or wrong as well as aid in
determining the difference between the behaviors whether it is acceptable and unacceptable.
The ethical considerations describe to the methodology in which the populace is not hurt and
are not commandingly requested to fill the survey. The ethical consideration of the research
report is demonstrated with the entire morals and standards pursued by analyst while directing
examination and no unlawful action are done in such manner. The ethical consideration in this
examination report is that the exploration is led in the moral route inside the standards and
controls of the school and no individual is hurt or compelled to give their conclusion on the
research questions (Bennett &Panicker, 2016). It is essential or important that need to identify
the effective ways by providing and considering the effective focus which is identified with the
moral as well as targets with the validity with the capable way. This is principal correspondingly
as data is correct and also with no outside effect then degree for the trustworthiness enough
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pushed forward. In the research, good morals should be kept in the exploration which assists in
accomplishing the fitting outcome along with the issues may get unraveled through this.
3.12 Validity and reliability
Reliability said to be a degree to which assessment tool can produce effective results whether it
is stable and consistent. Validity and reliability are the concepts which are important and
essential for defining and measuring the bias as well as distortion. Validity, as well as reliability,
is an effective feature as it needs to take into consideration at the time of conducting effective
research. It is essential for the researcher to gather or assemble solid and also legitimate
information. The information can be gathered through a study by setting up a survey and that
ought to be genuine. The information and data ought to be utilized by the examination with the
goal that objectives and destinations can be set as they are having a limit (Noble & Smith,
2015). The validity and reliability help in delivering the effective and appropriate information
about the strategies for small and medium enterprise internationalization and barriers of
internationalization and export performance of local agricultural businesses in Nigeria.
According to the objectives or targets, employees need to examine the potentiality which
assists in resolving all the issues and need to identify the barriers to the improvement as well as
development. In this research, the researcher needs to adopt effective and innovative ideas due
to the shortage and loss of diversified things. As researcher need to adopt both the sources
whether it is primary and secondary so that researcher can conduct effective research.
3.13 Limitation of study
Each examination is led under a few requirements and this exploration isn't an exemption.
Limitations are the impacts that the investigator can't control. They are the shortcomings,
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conditions or effects which can't be controlled by the expert that put the repressions on the
framework and closures. Any impediments that may affect on the results.
Research is employed in establishing or confirming the facts reaffirming the outcomes of
research work, solve the issues, support theorems or develop new theories.
Some limitations of a research include:
• Random sampling was selected by the researcher so the individuals from the different
classes that are business, professional, services and so on had offered their own view which
contains educational impact also.
• People in case of reluctant to go in details because of their busy schedules along with
the fear whether their details would be disclosed.
• Because of the continuous variations in the environment, what is relevant today and
may be irrelevant tomorrow.
• In research, the lack of training to give report is there.
• In this research, there is the absence of the code of conduct as there is no specific code
of conducts exists for the researchers which assist in rivalry whether it is inter-departmental.
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CHAPTER 4: DATA ANALYSIS
4.1 Introduction
Data analysis is the process to revise the information for reaching the conclusion to a certain
problem. The data analysis is effective for structuring the findings of the research. The data
analysis is also effective to break large problems into several smaller parts (Silverman, 2016). In
other words, the researchers use data analysis for gaining meaningful insight of the huge data
set. In the current research, the data collected by researcher is analyzed using thematic
analysis. The thematic analysis is a method widely used in the qualitative research (Braun &
Clarke, 2016). The thematic analysis gives importance on examining the themes within the
research. The thematic analysis is based on organizing the data. The thematic analysis is
important for identifying the relationships between different themes within the research topic
(Nowell et al., 2017). This current chapter deals with identification and analysis of themes
within the data collected by the researcher through survey among a few agricultural SMEs
companies in Nigeria.
4.2 Presentation of Data
The representatives of these few agricultural businesses in Nigeria were surveyed using the
open-ended questions. Use of open-ended questions is effective to encourage the respondents
for sharing their views freely. In this section, the views of the respondents are collected and
those are presented theme-wise.
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Themes Description Frequency
Years of operation of the
business
Most of the agricultural
businesses in Nigeria are
operating in the market for
long time. The data collected
from the respondents is
indicating that most of the
organizations are operating in
the local market for about
than 10 years.
Most of these businesses are
operating in the local market
for about 10 years while a few
of these businesses are
operating for lesser years.
Profitability in local market The representatives of the
agricultural SMEs in Nigeria
indicated that the local
agricultural market is highly
competitive in nature. So,
remaining profitable in the
market is difficult for the
organization. The businesses
always need to analyze
strategies of the competitors
to earn more profit. The
businesses also need to
majority of the respondents
mentioned that the
businesses are still profitable
but earning more profit for
the organization is being
difficult. But a few businesses
have stated that the
organization is struggling to
remain profitable. In all the
cases, the business
representatives have
mentioned the high
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identify new strategies for
attracting and retaining the
customers and also to remain
profitable.
competition in the local
market as a key reason
behind the less profitability.
Internationalization of
agricultural businesses
The respondents consider
that entering the
international market can
benefit the business to find
out new ways of increasing
the profit. There are many
organizations in the local
agricultural market of Nigeria.
So, finding new ways to
increase the profit in this
country is difficult. However,
in the international market,
there are many untapped
customer groups whom the
Nigerian businesses can serve.
Most of the respondents have
considered that the
internationalization can be an
effective way to enhance
profitability of the businesses.
Potential to internationalize The respondents have
mentioned that the Nigerian
businesses can
Most of the business
representatives in Nigeria
have considered that the
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internationalize. However, the
businesses have not realized
the full potential to
internationalize. The
agricultural businesses
operate in a successfully in
the local market and they
meet the local standards. In
order to do businesses in the
international market, the
organizations require
acquiring new capacity to
meet the different types of
needs of international
customers. The businesses
also need to find out
innovative ways for meeting
the requirements of
international customers. The
businesses require having
adequate infrastructure to
compete with other
organizations have full
potential to internationalize.
However, the business
representatives have
mentioned that the
organizations still not have
the full potential to serve
customers in the international
market. Several of the
respondents have mentioned
that the businesses require
developing adequate
infrastructure for improving
the quality of products and
services and be compatible
with the international
standards. The respondents
have stated that the local
businesses need to gain more
knowledge on the needs and
wants of the customers in the
international market. All the
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international organizations.
Finally, the organizations
require being aware of the
rules and regulations in the
international markets to
operate there successfully.
business representatives have
shown their concern over the
rules and regulations in the
international market. The
rules and regulations in the
international market is quite
different than that of the local
Nigerian industry. So, the
local businesses need to make
them able for complying with
the rules and regulations.
Internationalization strategies The business representatives
have mentioned that
exporting to the foreign
market is an effective way to
internationalize. The
exporting provides the
organizations to serve the
international customers in
cost-effective manner.
However, a small number of
Nigerian businesses are giving
Exporting is one of the key
internationalization strategies
used by the Nigerian
agricultural SMEs. Majority of
the respondents have
mentioned exporting as the
primary strategy for
internationalization. However,
the businesses are also
looking for new ways to
internationalize. The
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importance on entering the
international e-commerce
market. Entering the e-
commerce market is also an
effective way to reach the
international customer
groups.
businesses have given
importance on
internationalizing through the
e-commerce operations. The
businesses are also
considering using the latest
technology for
internationalization.
Barriers The Nigerian businesses are
experiencing different types
of barriers while entering the
international market. Firstly,
the businesses are facing
problems due to lack of
knowledge on the demands of
international customers. The
local businesses of Nigeria
also do not posses advanced
technology to serve the
international customers. The
lack of innovative ideas is
another issue for the Nigerian
The business representatives
have mentioned different
types of barriers for
internationalization. Some
businesses have mentioned
that lack of knowledge on the
international customers is one
of the key issues faced by
them. Other representatives
have also mentioned that the
advanced technology is
necessary for successful
internationalization. Some of
the respondents have
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businesses. The businesses
need adequate financial
resources to internationalize
successfully. The lack of
financial resources is another
key problem for the Nigerian
businesses. Finally, the
Nigerian businesses are also
not completely ready to enter
the foreign market.
mentioned that lack of
financial resources is another
key issue faced by the
Nigerian organizations for
internationalization because
funds provided for
agricultural businesses
development are not usually
put to good use effectively or
misappropriated by various
official. Respondents have
also mentioned that the
readiness of Nigerian
businesses is another key
factor that prevents them
from entering the
international market.
Areas to improve The key areas that need to be
improved are-- infrastructure,
technological resources,
innovative strategies,
accountability and knowledge
Most of the respondents have
mentioned that upgrading the
infrastructure is necessary to
internationalize the
agricultural SMEs in Nigeria
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on the market. The
respondents have also
mentioned that many
businesses do not have the
attitude for entering the
international market. The
businesses require developing
the innovative strategies for
improving the service and
product quality. The
businesses also need to
obtain more knowledge on
the market to serve the
customers better.
effectively. Also, respondents
have mentioned that the role
of market knowledge is also
important for
internationalizing the SMEs.
They have also mentioned
that the organizations need to
incorporate innovative
strategies for operating in the
international market
successfully.
Benefits of
internationalization
The internationalization of
SMEs in Nigeria is primarily
beneficial for the
organizational growth.
However, the respondents
have mentioned that during
the internationalization, the
businesses need to hire skilled
All of the respondents have
mentioned that the
internationalization can help
the SMEs to enhance their
growth rate. The SMEs can
also create new jobs in the
society.
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workforce to execute the
activities. It can create new
jobs in the society.
4.3 Analysis
The data collected through the questionnaire survey can be categorized into eight key themes.
In the current section, the data under each theme is analyzed and the findings are listed.
Profitability in local market: The profitability of an organization in the market depends on the
level of competition. In Nigerian agricultural market, the level of competition is quite high
among the SMEs (Sertoglu et al., 2017). The primary data indicates that the businesses are
facing difficulties to remain profitable in the market. Entering new markets can enable the
businesses to find out new ways to increase profitability. Therefore, internationalization can be
an effective strategy for the SMEs to earn more profit. However, the local market of Nigeria and
the international market are completely different in nature. So, the businesses require
developing knowledge on the international market and also need to develop strategies
accordingly to promote their products to that market.
Factors contributing to successful Internationalization of agricultural businesses: The primary
data indicates that most of the agricultural SMEs in Nigeria are operating in the market for a
long time. The data in the sources also state that many businesses in Nigeria are individual /
family-run and these businesses manufacture products only to meet the livelihood needs of the
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family and local markets. The long years of operation facilitated the business to gain experience
and knowledge in the local market (Olowofeso et al., 2017). The knowledge on the local
customers can be effective for serving the international customers as well. So, the years’ of
experience and the knowledge base can be beneficial for the businesses. Primary data indicates
that the agricultural SMEs are focusing to increase their profitability through the
internationalization. The internationalization helps the businesses to reach the untapped
portion of the markets. In other words, the internationalization of SMEs can be considered as a
market development strategy for the businesses.
Potential to internationalize and the strategies: The primary data indicates that the Nigerian
businesses consider that they have the potential to succeed in the international market.
However, the businesses also consider that there are several changes that need to be brought
for operating successfully in the international market. The primary data revealed that the
businesses focus on using the export as one of the key strategies to enter international market.
The businesses can also use the e-commerce operations for entering the international market.
The secondary data also indicates the importance of exporting for internationalization. Both the
primary and secondary data is indicating that the businesses require focusing on improving
their technological capabilities for offering quality products and services. The primary data
indicates that the businesses require enhancing their readiness for internationalization. The
secondary data also indicates that the readiness of the businesses is one of the key factors that
lead to successful internationalization. The internationalization can be done successfully with
help of innovative strategies, as evident in the primary data. The secondary data also indicates
that the businesses require developing innovative strategies to internationalize successfully.
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4.4 Conclusion
The current research indicates that the internationalization is necessary for the Nigerian SMEs
businesses to find out new growth opportunities. Using internationalization, the SMEs
businesses can reach the markets where the competition is less. Operating in the international
market can be easier for the Nigerian businesses because of their experience and knowledge on
the local market. The thematic analysis indicates that exporting is considered as a key strategy
to enter the international market by the Nigerian SMEs. However, the analysis indicates that
some of the Nigerian businesses are also considering e-commerce as another effective strategy
to enter the foreign markets. While entering in the foreign market, the Nigerian SMEs can
experience different barriers. For instance, the lack of infrastructure can restrict the businesses
from operating in the international market. The lack of advanced infrastructure is another
factor that is restricting the Nigerian SMEs from operating in the international market because
the lack of mechanized equipment’s may not permit the SMEs to increase production and meet
up with the high demand for SMEs agricultural products by the international market. The
businesses also require developing the knowledge on the international customers to serve
them in a better manner.
Chapter 5: Conclusion
5.1 Introduction
Internationalization is one of the effective strategies that help the small and medium-sized
businesses to grow and survive in the market. Exporting is a widely used strategy by the SMEs
for enteringto the international market (Bijaoui, 2016). However, as evident in the research,
implementation of successful exporting strategies depends on several factors such as readiness
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of the organization to adopt the changes in the international market, the innovative strategies
and the proactive approach of the businesses to meet the needs and wants of customers. While
expanding the business to the international market, the SMEs can experience several barriers
such as knowledge and resource barriers. In the case of the Nigerian agricultural SMEs also, lack
of financial and human resources are the two key barriers to internationalization. The Nigeria
agricultural SMEs are a major part of the national economy. In addition to being a source of
economic growth for the nation, the businesses are the major job providers also. Therefore,
successful internationalization is necessary for the Nigerian SMEs, not only for the
organizational growth but also for boosting the national growth. The current chapter includes
discussion on the extent to which the research objectives are met in the study. The chapter also
includes recommendations for the Nigerian SMEs for expending their business in the
international market through the exporting.
5.2 Linking to Objectives
• To study the meaning of internationalization
In case of a business, the internationalization refers to the process of expanding the
organizational activities in the international market and serving the international customers.
The internationalization can be done in several ways. Exporting to the other countries is one of
the most used ways by the SMEs (Ajayi, 2016). By exporting products to the other countries, the
SMEs become able to serve the larger group of customers and it helps businesses to enhance
their profitability. The research indicates, internationalization can benefit the SMEs by
facilitating them to use new technologies, improve the business processes and earning more
profit by tapping into the larger customer base. However, the businesses also face different
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Internationalization
challenges at the time of internationalization due to the high difference between the domestic
and international business.
• To examine the internationalization of SMEs
According to the current research, internationalization is beneficial for the SMEs in several
ways. Firstly, the internationalization helps the businesses to get benefitted by the free trade.
With help of the modern technology, the businesses become able to offer their products to the
larger customer group (Baumgartner &Rauter, 2017). As an effect, the profitability of the
organization increases significantly. The research also indicates that internationalization helps
the businesses to develop their workforce. For serving customers in the international market,
the businesses need to employ a more knowledgeable workforce. In the international market,
the businesses become able to tap into larger resources and it helps them to develop new skills
among the workers. The newly skilled workforce is effective for competing with the other
organizations in the market effectively.
• To examine the strategies for SME internationalization
As evident from the current research, export is a key strategy for internationalization among
the SMEs. The research also indicates that initiating the e-commerce operations can be
effective for the SMEs to explore the international market. The effectiveness of exporting
depends on three internal factors such as the innovativeness of the organizations, proactive
nature and the risk-taking approach. The effectiveness of the internationalization is also
dependent on the government policies (Elkington, 2018). For incorporating the exporting
strategies effectively, the businesses need to develop innovative strategies for obtaining
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Internationalization
competitive advantages. The businesses also need to be proactive for meeting the demands of
customers in the international market and retaining them to the organization. The international
market can be highly different from the domestic market of an organization. The SMEs often do
not have adequate knowledge of the international market and the lack of knowledge among
the businesses can pose risks to them. The SMEs also possess limited financial and human
resources.
The lack of adequate resources can also pose risks to the small and medium businesses.
However, for expanding the activities to the international market, the businesses need to be
ready to identify and manage risks effectively. When the businesses become able to identify the
risks in advance and develop strategies to cope with those, the losses associated with those
strategies reduce. As the effect, the chances of surviving in the international market increase
for the businesses. The successful internationalization through exporting is also affected by
institutional factors such as the government policies. The government policies of a country
impact the business activities significantly especially when they are not efficient or do not
reflect accountability in their policies management process. While operating in the
international market, the businesses need to deal with different business policies. Non-
compliance to the business policies can lead to legal complexities for the business and it can
interrupt the business operations as well. Therefore, while operating in the international
market, the businesses need to make sure their policies are complying with the international
market rules and regulations to avoid any complexity.
• To investigate the barriers and challenges that SME local agricultural production in Nigeria can
use to internationalize
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The current research has revealed a number of barriers and challenges that the local
agricultural SMEs in Nigeria are facing at the time of internationalization. The barriers faced by
Nigerian businesses are the knowledge barrier, social and cultural barrier, technological
barriers, economic barriers, and organizational barriers, legal and regulatory barriers. The e-
commerce operations are effective to enable an organization to internationalize easily
(McAdam et al. 2017). However, the SMEs need to realize the benefits of e-commerce
operations for internationalization. The businesses also need to have adequate technological
infrastructure for operating in the international market. For serving the international
customers, businesses also need to have advanced technological infrastructure. The businesses
need to utilize financial resources also effectively to improve service delivery and reach
international customers. Finally, the businesses also need to consider the legal factors while
operating in the international market.
The organizational readiness is an important factor that helps the businesses to
internationalize. The businesses need to be ready to identify the risks associated with entering
the new market. The businesses also need to be ready to accept the changes in the workforce
and the organizational processes to align those with international market policies. Finally, the
businesses also need to be ready to adopt the new technologies so that reaching the customers
in the market becomes easier. The research also indicated that the Nigerian SMEs often lack the
knowledge on the international market and it restricts them from expanding the business
activities in the international market. The Nigerian SMEs also lack adequate financial resources
to invest in the technological infrastructure and run the operational activities in the
international market.
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5.3 Recommendations
On basis of the issues for internationalization by the Nigerian SMEs, recommendations are
made in the research.
Adapting e-commerce technologies: Using e-commerce technologies is an effective way to
reach international customers (McAdam et al. 2017). With help of e-commerce technology, the
businesses can expand its activities to the other countries without possessing any physical
facility. The reduced need of physical set-up, not only reduces the cost of internationalization
but also reduces the need for manpower as well. However, the businesses require acquiring the
new technologies for running an e-commerce business in the international market. The
businesses also need to be aware of the security risks associated with online businesses and
develop strategies to mitigate those risks. Finally, the businesses also need to develop new skills
among the workforce for utilizing the latest technologies and serving the customers accordingly
to retain them.
Investing in market research: The current research indicates that the SMEs often lack the
knowledge of the international market and the customers. Having adequate knowledge of the
customers is necessary for improving the product and service quality (Bijaoui, 2016). The SMEs
in Nigeria can start investing in market research to increase the awareness of the international
customers. The market research can help businesses to gain knowledge of the rules and
regulations in the international market, the trends, technological developments and needs and
wants of customers to improve their product and service quality. The investments in market
research can be effective for the businesses to develop better industrialization strategies and
utilize own resources accordingly.
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5.4 Chapter Summary
The current research indicates that the internationalization is necessary for the agricultural
SMEs in Nigeria for their growth and survival. The Nigerian SMEs contribute a significant portion
of the national income. The internationalization of the small and medium businesses is also
necessary for improving the national growth. However, the SMEs in Nigeria face different
challenges at the time of internationalization due to lack of knowledge, resources and also due
to lack of organizational readiness. Nigerian businesses can start adopting the advanced
technology to enter the international market through e-commerce operations. Use of e-
commerce technology facilitates businesses to cater to international customers in a cost-
effective manner. Invest in market research to the needs and want of and meet those
accordingly.
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Appendix 1: Survey Questionnaire and Responses
PARTICIPANTS RESPONSE.
PARTICIPANT 1.
1. How many years has the organisation been operating in this industry?
Ans: 14 years
2. Do you think that the business is profitable enough in the local market?
Ans: the business is profitable but as the economic recession set in Nigeria in 2016, it affected
our earnings drastically. Every household income reduced, higher inflation and cost of doing
business went up which affects our profit margin
3. Do you think that internationalisation can make the business more profitable?
Ans: yes, internationalisation is entering a new market which will give us more sales and
increase our revenue. The bottom line for any business is to generate more sales, increase
productivity and earn more money. Our company is already looking at ways to do this, but it is
difficult in Nigeria considering the infrastructural challenge
4. Do you think the business has potential to internationalise?
Ans: yes but we need to put a lot of things in place. We currently have a country with failing
infrastructure, bad logistics which is very important. To even import or export in Nigeria takes
longer and more expensive than other country. So you need to put a lot of work, design some
strategies and have good infrastructures like increase fleets of trucks, redesign our payment
plan and many things. So I will say we have the potential but we need to work on the potential
to be achievable.
5. What are the strategies you want to use for internationalization?
Ans: to be very clear, we have considered a lot like exporting or partnership so that we can
produce in this country but as it stands with our capacity and available resources, exporting is
the best. Getting partners in other countries to ship our products to but in the long run we can
embrace technology such as direct sales using an e-commerce platform
6. What factors can reduce the effectiveness of internationalisation
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Ans: there are many factors chief of which is the lack of knowledge about other market which
we are just trying to get. You need to understand the market as well as the customers’
expectations. Also, there is infrastructure. Everything about successful business comes to good
structures, so we need to improve the infrastructure, get toused to leading technology to
market ourselves and track our activities. There is a lot of barriers now.
7. What are the recommendations for making the internationalization of business
smoother?
Ans: I have actually said some of it, infrastructure, improve in business environment, knowledge
of the new market. We also need to improve our strategies to accommodate future business
with foreign markets like increase in productivity, staff training.
8. What other benefits you expect from the internationalisation of agriculture business
Ans: ultimately, going to other market will incr4ease our sales, drive growth and revenues. It
will also enhance our productivity which will also means more job for our people.
PARTICIPANT 2.
Survey Questionnaire
1. For how many years the organization has been operating in this industry?
Our Organisation is over 6 years in the industry but over 20 years on individually level in the
industry as well.
2. Do you think that the business is profitable enough in the local market?
Agribusiness is profitable in Nigeria if done properly.
3. Do you think that internationalization can make the business more profitable?
Yes, international trade will make the business more profitable as you make more money by
earning foreign currency which has more exchange value
4. Do you think the business has potential to internationalize?
Yes, agribusiness has great potentials especially in export of some specific products
5. What are the strategies you want to use for internationalization?
The strategies include;
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i. Source for buyers and partners
ii. Identify regulations on trade, food safety and traceability
ii. Collaborate with Laboratories and establish with Government agencies like NAFDAC, SON ,
NEPC etc
IV. Source for more money from investors and Banks
6. What are the factors that can reduce effectiveness of the internationalization?
i. Unstable government policy
ii. Unstable foreign exchange
iii. Lack of Trade policy to support export of agricultural produce and businesses
iv. Corruption
8. What are your recommendations for making the internationalization of businesses
smoother?
i. Reforms to smoothen operations at the different ports in the country (Seaports, air ports etc)
ii. Credits for export of agricultural businesses
iii. Main quality control of produce of entry
iv. Enhance remittance of proceeds from agribusinesses abroad
v. Strengthen the NEPC operations and mandates
9. What other benefits you expect from the internationalization of agricultural businesses?
i. Wealth creation for Small and medium agribusinesses that will provide the stocks for the big
agribusinesses
ii. Create jobs in the Country
iii. Will also balance of international trade
iv. Economic growth and development
v. More funds to government for infrastructure and social investment
PARTICIPANT 3.
What is the nature of your business and how Long have you been in operation?
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I am a farmer, and its actually a family business which we have been running for over a decade.
We farm cassava during the rainy season and process it into cassava floor for sale. Sometimes,
we sell unprocessed cassava to wholesale buyers who go on to process it themselves for sale.
Do you make much profit from the business?
Not really, because we are not a big mechanized farm at the moment. We produce just enough
for the local market. Another issue is inadequate infrastructures like the access road to
transport the goods out of the farms and lack of power.
What is the possibility of you making your business international?
I must say there is much potential in cassava farming especially here in our community. This is
because the soil type is good for cassava farming and there is much demand for cassava
worldwide both in Nigeria and abroad. If we are able to access farm loan and expertise, we
would be able to produce in commercial quantity to compete in the local as well as global
market.
If you were planning on going international, what strategies will you employ?
I would draw up a business plan that would outline the structure of the farm in terms of size
quantity and quality of yield. Amount of investment needed and a market survey to know the
type of cassava to grow that would meet international standard. The plan will also include
compliance with all business regulations on doing business locally and internationally
What will you consider to be the Barriers of internationalizing small scale businesses like yours?
The competition I would say and the political barrier to access government loans in Nigeria. The
issue of corrupt practices has prevented small farmers like us to access government facilities to
grow our business due to mismanagement. For instance, fertilizers meant for farmers are
diverted by middlemen and sold at a high cost to farmers. Also, farm tractors and machinery
are diverted by politicians for personal use instead of making them available to the farmers.
The best cassava yields are also diverted for personal use. This leaves the farmers in a situation
where they are even less capable of producing enough for the local market.
What do you think might be the benefits of internationalizing your business?
There is a whole lot of benefits doing business at the global level. Business at the global level
will access a larger market for profit as well as the ability to reinvest in my farm. Also, it will
create more jobs and opportunities locally.
PARTICIPANT 4.
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We are a partially new agro product company and our business is particularly processing and
production of palm oil. The business is still at an early stage that is less than 5 years old. So we
have the desire to expand in the future as we build up our consumer base. We source our raw
material locally and also distribute our product locally too.
So far we have not been realizing much profit from running the business. The profit after
running cost is still very little and not as much as we want it to be yet. But it is prospective
because in as much as the profit is still very little, it is usually constant and we believe that if we
maintain such pace, we will in no distant time start to see an increase in profit. I will also like to
state that profit is slow but sure as low profit at the initial stage is mainly because agricultural
production is very time consuming and demands a high level of man power. Hence the less
profitable in our local trading areas and community. Imagine an area where you have a few
other smaller businesses like mine all struggling to have a slice of the local market share.
Because of this, competition is very high amongst us. We mainly make enough profit to keep
the business moving.
We have been in operation mainly in our immediate market and are making plans to expand to
other areas in Nigeria. We have the potential to internationalize in the future when we have
put enough resource together. Expanding locally is a bit easier to do than going international
because of certain capabilities which we do not have. The international market have a high
standard like production quality, capital, and insight to the foreign market which we are not
capable of meeting now.
The most important strategy that comes to mind is business when thinking of making your
business international is becoming and exporter, setting up your business internationally or
exporting your products to other markets. But this will require means like meeting up with
standards and technology so they can be more efficient in production and distribution of
products.
Market insight is a big issue for internationalizing our business because we have little
knowledge of what exporting or the international market is like. We also do not have the
technology to meet with the demand and production as well as standardization of produce.
Again is the finance. Most small agricultural business like ours don’t grow beyond a certain
point because the only make enough profit to keep them afloat and may not have the financial
resource to establish their business outside the country. So even if there is a demand now for
us to supply products, we may not be able to meet the demand or standard. Also, the
government is not doing enough to support small businesses like granting them loans to expand
operations, and even when they do, they require huge collateral which most small business
owners do not have.
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There is no limit to the benefit of taking a business outside your locality and expanding your
business operations. This is because, when you take your business international, it will bring
about growth in ways such as returns of investment, a larger labor force, and more skilled
workers who will have to manage the advance technological machinery used for production.
Another aspect you benefit from is the Brand name. People like companies that are known
internationally because it make them feel like they are buying a trusted, reliable and well-
known brand product. Also the business will be exposed to more challenges that will enable
them improve on their product and work force. The company will also have the ability to make
more profit as they expand operation internationally.
PARTICIPANT 5.
1. For how many years the organization has been operating in this industry?
My organization had been into poultry farming for the past ten years. We usually grow more
during the festive periods like Christmas and the Easter period where there is much demand for
poultry products.
2. Do you think that the business is profitable enough in the local market?
No longer profitable enough. We do make a profit but not as much as we would like to. There
has been a remarkable decline in profit due to the economic recession. The cost of growing the
chickens has increases which make sales difficult as the customers are not willing to buy at an
increases price. For example, there is an increase in the cost of drugs feeds and fuel to power
the light in the farms. These factors have been a challenge to maximize profit
3. Do you think that internationalization can make the business more profitable?
There is a possibility for every business to produce enough for export if there is access for
investment. The limitations are the inability of local farmers to produce at commercial quantity
to the infrastructural limitations. Additionally, loan facilities are not accessible to local farmers.
And lastly, the competition at the Global level would be against who are able to produce in
large quantity and are already even exporting to Nigeria until to the recent ban on poultry
product by the government.
4. Do you think the business has potential to internationalize?
Yes! This is because the demand for poultry meat and eggs is expected to continue increasing
due to population growth and rising individual consumption locally and internationally.
5. What are the strategies you want to use for internationalization?
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Internationalization
I will come up with a business plan that would access investment to expand locally and grow
the business to be able to export.
6. What are the factors that can reduce the effectiveness of the internationalization?
The factors that can reduce the effectiveness to expanding my business are poor infrastructure
in terms of power and government support. Lack of loan facilities and government support to
farmers.
8. What are your recommendations for making the internationalization of businesses
smoother?
I think it is a combination of several problems which makes it hard for businesses to
internationalize. I will recommend, organizations make contacts to foreign countries. This can
reduce therisk in several ways. First of all they provide security, because if the contacts are
trusted partners they can enable the company to get knowledge from them which can be used
in the internationalization process.
7. What other benefits do you expect from the internationalization of agricultural businesses?
New markets...Are key for generating growth for agricultural businesses especially considering
the ability to generate higher profits in foreign markets due to varying price elasticity’s, it might
be possible that the same products can be sold at a higher price if the demand exceeds the
supply.
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