Small And Medium Enterprise Internationalization| Strategies & Barriers

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.
2

Internationalization
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.
3

Internationalization
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
3.2 Research Objectives........................................................................................ 30
3.3 Research Question.......................................................................................... 31
4

Internationalization
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
5

Internationalization
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, reduce 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). 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
6

Internationalization
percent per year. Thus, it became necessary to research the strategies that
small and medium-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. It establishes an
inclination to know the ways in which the small and medium sector
enterprise can grow internationally and have a global presence even after
facing various constraints such as financial earnings or financial help from
external sources. The major goal of the study will be to understand
industrialization and the strategies other small sector firms have adopted
worldwide to get an international presence. This study will explore whether
similar strategies can be implemented in the SMEs of Nigeria.
7

Internationalization
OBJECTIVES: The objectives of the research is as follows:
• To study the meaning of internationalization: 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.
• 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 examine the strategies for SME internationalization: The objective
stands out as the major portion of the objective that will help in examining
the comparative strategies that have been taken by SMEs for attaining
industrialization. It is a crucial part of the paper as attaining this objective
will help in stating the ways SMEs in Nigeria can also get globalized.
• 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
8

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.
2

Internationalization
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.
3

Internationalization
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
3.2 Research Objectives........................................................................................ 30
3.3 Research Question.......................................................................................... 31
4

Internationalization
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
5

Internationalization
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, reduce 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). 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
6

Internationalization
percent per year. Thus, it became necessary to research the strategies that
small and medium-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. It establishes an
inclination to know the ways in which the small and medium sector
enterprise can grow internationally and have a global presence even after
facing various constraints such as financial earnings or financial help from
external sources. The major goal of the study will be to understand
industrialization and the strategies other small sector firms have adopted
worldwide to get an international presence. This study will explore whether
similar strategies can be implemented in the SMEs of Nigeria.
7

Internationalization
OBJECTIVES: The objectives of the research is as follows:
• To study the meaning of internationalization: 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.
• 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 examine the strategies for SME internationalization: The objective
stands out as the major portion of the objective that will help in examining
the comparative strategies that have been taken by SMEs for attaining
industrialization. It is a crucial part of the paper as attaining this objective
will help in stating the ways SMEs in Nigeria can also get globalized.
• 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
8