Internationalization Strategies for Nigerian Agribusiness SMEs

This literature review examines the internationalization strategies for Small and Medium Enterprises (SMEs) within the Nigerian agribusiness sector. It analyzes secondary resources, including research papers and reports, to provide a comprehensive overview of the topic. The review explores the importance of internationalization for Nigerian agribusiness SMEs, highlighting the challenges, barriers, and opportunities involved. It discusses various internationalization theories and strategies, such as the Uppsala theory, location advantage theory, comparative advantage theory, and transnational strategy, and their relevance to the Nigerian context. The review also addresses barriers to internationalization, including financial and managerial challenges. The literature review concludes by emphasizing the potential for Nigerian agribusiness SMEs to succeed in the global market by adopting effective internationalization strategies and managing their operations effectively. The study suggests the significance of removing barriers, implementing appropriate strategies, and considering the local and global market needs for successful internationalization. The paper aims to provide insights into the current state of internationalization for Nigerian agribusiness SMEs, providing a basis for future research and practical application.

Introduction
In this paper literature review has been written. The literature review is on the strategies for the
Small and Medium Enterprise's internationalization of the local agricultural business in Nigeria.
In a way to complete this literature review, the resources which have been analyzed and referred
are all secondary in nature. Various previous research paper and report has been reviewed and
analyzed mainly to complete this literature review in an effective manner. AT the end of this
entire literature review the proper list of references has also been provided in APA style.
Nigerian Agribusiness industry
Nigeria has the biggest economy in Africa yet is a center salary, blended economy and
developing business sector with growing money related administrations in the interchanges,
innovation and diversion segments. It has subsistence farming segment which has not stayed
aware of quick populace development. It is found from the history that Nigeria is well in agri
business management. It is one of the country which is engaged in the activity of agribusiness.
Responding the needs of the hour it become prime importance for the Nigerian Small and
medium agri business enterprises to go internationalization. It is often found that while planning
to go internationalization the process may involve a lots of challenges, barriers, and opportunity.
But Nigerian small and medium scale agri based enterprises should respond the challenges in an
effective manner.
Literature Review
SME internationalization is creating at an aggravating pace, showing the overall significance of
SMEs to both neighborhood and overall markets. Starting late, convey has transformed into a
key kind of SME internationalization. The cultivating portion has wound up being fundamental

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to the improvement of the Nigerian economy; to the extent both innovative outcomes and
occupation creation a considerable amount of these is a sound delegate for SMEs ability to
convey their things.
Due to the increase in competition as well as modernization of the technology, it becomes prime
importance for the small and medium enterprise to have internationalization. It is because it will
lead them to perform effectively as well as efficiently in the stiff competitive market scenario.
Internationalization will enable the small and medium enterprise to develop a global presence
and to have and earn handsome profit. It is fact that more than 69 percent of the population in
Nigeria are engaged in agriculture business and production (Peng, M. W. 2016). It is providing
near about 35 percent employment as per the 2010 statistics. Hence, it can be said that going
internalization for the Nigerian agriculture business unit’s especially small and medium
enterprise is of prime importance. But at the same time selecting the best strategies and method
to adopt while going internationalization should also be considered and focused at large. It is
because applying and adopting proper and internationalization process and strategies play a vital
role in making the small and medium enterprise attain success and objectives in an effective
manner. There are various strategies and method of going internationalization which a small and
medium enterprise can adopt and follow in internalization process.
Nigerian SMEs have thought of new things and organizations, or better methodologies for
packaging the things with the objective that they are speaking to worldwide buyers. It takes an
ambitious concentrated firm in Nigeria to present a huge amount of money for conveying
without considering the high peril drew in with offering abroad. Many exchanging SMEs will go
to the level of getting from the banks, using their homes as assurance security without
considering the last result of losing their homes with the true objective to convey into an outside

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country. Ambitious centered SMEs in Nigeria can along these lines be recognized as firms with a
capacity to proactively look for after overall business openings with things that are innovative
paying little personality to the threats included. For a firm to have the ability to make an
elucidation of benefits into purposes of intrigue and execution, the firm needs obvious capacities.
It is basic to reliably make, join, and reconfigure firms' aptitudes and limits with the true
objective to adjust to change in the business focus. It has been perceived by (Hermannsdottir et.
al. 2007) that inventive presentation can be critical in achieving firm execution in an outside
market if the internal and external parts are all around balanced.
According to the (Adewumi, B. A. 2008a), there are many strategies for the internationalization
process which help the small and medium agricultural enterprises in Nigeria. The researcher
highlighted that there are many reasons which pushed small and medium agricultural enterprises
to go internationalization such as capturing the maximum number of the potential customer, to
enhance the global presence, and to effectively utilize the resources. The best strategies are based
on the structure and size of the enterprises. There are no one way best strategies for
internationalization (Adewumi, B. A. 2008a).
Nigeria SMEs are for the most part governed by close to nothing and medium scale agro-based
undertakings having some ability in the making of mass things consumed in homes and ventures
and for passage progressions, especially in genuine cash yields and natural item age and taking
care of. Nigeria is one of the primary countries in the age of cultivating things, for instance,
natural items, cassava, yam, cowpea and cocoa and what's more regular items, verdant and root
vegetables, grain vegetables and animal things, of which the mass is from the SMEs. These green
things are exceedingly fleeting and records of postharvest setbacks of this thing are high with
Nigeria having up to half it has been represented that Nigerian cultivation perseveres through

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disasters as much as half for vegetables, 30% for roots and tubers, and 20% for grains (FMARD,
2001). This example is counterproductive and does not bolster agro-based money related
improvement in a significantly destitute agrarian economy.
Uppsala Theory of Internationalization- Internationalization viewpoint has been inspired by the
Scandinavian. The main highlight of this theory is that there are many reason which make the
small and medium enterprise to go internalization such as if an enterprises want to increase sales
and export and import, needs to establish sound relationship with the foreign countries, need to
build global presence, want to exploit the available resources in an effective manner (Meyer, K.,
and Peng, M. W. 2016).
Location advantage theory- According to this theory small and medium enterprises try to access
the advantage of the location. It is that if an enterprise observes that particular location is very
much feasible for its growth as there is ample cheap and skilled labor are available then surely
small and medium enterprises try to go internationalization. In order to gain the competitive, as
well as a strategic advantage, the small and medium agriculture enterprises, enter to foreign
market through internalization.
Comparative Advantage Theory- David Ricardo propounded this theory. The theory
acknowledged the nearness of two countries, two things and one components of creation. In his
theory, a country conveys the thing that has bring down close favored angle and import thing
whose relative cost is higher. The theory moreover acknowledged that the component of
advancement is agreed to the two nations and that trade is balanced and uncovers the surge of
money between nations. In any case, the speculation relies upon the work speculation of
characteristics, which communicates that the expense of the estimations of an item is comparable

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to the work time going into the creation strategy. Work is used in a settled degree in the creation
everything being equivalent (Usman, 2011).
According to the (Ajayi, B. 2016) theory of Proprietorship advantage alludes the small and
medium agriculture enterprises to acquire particular resources, e.g., items, innovations or HR;
and impalpable, e.g., licenses or brands. These resources give favorable position to the
contributing firm by either bringing down the expenses or creating higher income that can
balance the exchange costs engaged with abroad tasks (Ajayi, B. 2016).
(Bijaoui, I. 2016) mentioned in his research report that Nigerian agricultural enterprise can
effectively go internationalization considering the location advantage theory. It is because
according to the location advantage theory firm can enter into foreign market mainly to achieve
the opportunity related to the location and availability of the resources in an effective manner
(Bijaoui, I. 2016). The researcher also mentioned that there are numerous barriers which
Nigerian Small and medium agriculture are facing while going internationalization. Such as
financial barriers, managerial barriers, industry and firm specify barriers and so on. The
researcher in his research conclusion and findings highlighted that it is very important to remove
the barriers for internationalization in an effective manner. It is because removing the barriers by
implementing strategies is the need of the hour to make the small and medium agriculture
enterprise effective and healthy.
According to the viewpoint of (Ibrahim 2017) developing the effective and sound strategies for
internationalization process is of prime need. It is because effective strategies will enable the
agricultural business and enterprise to go enter into the foreign market ineffective and successful
manner. Multidomestic international strategy, as it will help the enterprise to emphasize

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responsiveness of the local requirements where the entry is to be made. Beside this global
strategy of internationalization help the small and medium agriculture enterprise to provide the
product and services according to the needs and demand of the global customer (Ibrahim et al.,
2017). This strategy particularly helps in building the global presences as well as enhancing the
customer base at large.
In case if Nigerian small and medium agricultural enterprises want to enter into USA 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 costa and benefits than taking the final decision of
making entry into the USA market at large.
(Bijaoui, I. 2016) mentioned that Nigerian small and medium agriculture enterprises can follow
transitional strategy. It is because transnational international strategy will help the agriculture
enterprises in maintaining the balance between local as well as global needs and demands in an
effective and efficient manner. The researcher highlighted in his research study that transnational
strategy of internationalization is the best internationalization strategy but firm needs to be
enough sound in regards to financing. It is found that agri product is the central elements of diets
all over the world. So it will be beneficial for the small and medium agribusiness enterprises to
go internationalization through following the transnational strategy (Bijaoui, I. 2016).
The market of Nigeria in regards to the agri business is found very effective and efficient. It is
growing day by day which highlights that the Nigerian Agri business enterprises are performing
well in its territory. The local agri business enterprises in the Nigeria are almost small and
medium in their size. But the overall performance of these local small and medium agribusiness

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enterprises is sound. The growth index depicts future success and development prospectus of the
agribusiness. Hence, it can be concluded that Nigerian agribusiness enterprises have the potential
opportunity to go international. It will enhance their overall global presence and make them able
to stay in the competitive global market.
(Zoogah, 2015) mentioned that small and medium scale agribusiness enterprises need to
effectively manage their operation. It is because it will lead them to go internationalization in an
effective and efficient manner. The researcher highlighted in the research report that small and
medium scale agro business enterprises need to select the global or transnational strategies while
planning to go international operation (Zoogah, D. B., Peng, M. W and Woldu, H. 2015).
According to the view point of (Peng, M. W. 2017), there are a lot of barriers which Nigerian
small and medium scale agri business enterprises are facing in regards to going and 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 Nigerian enterprises
will face intense competition from the industry and hence it will become one of the barriers to
making entry. In a country like USA and Canada If Nigerian small and medium agri based
enterprises want to make entry 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
labor is more as compared to India, Nigeria, and other developing countries and nationalities.
But if talking about the technological advancement and modernization, United States of
America, Canada and France are sound. It would be difficult for the Nigerian 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

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according to the demanding 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. 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 labor and resources. Which
will give strategic as well as competitive advantages to the particular small and medium scale
agri based enterprises.
According to the view point (Ibrahim 2017) Nigerian small and medium scale agri business
enterprises may use the location advantage theory while planning for going to international. It is
because it will help them in analyzing the strategic as well as competitive advantage in an
effective manner (Ibrahim et al., 2017). The research conclusion of the researcher highlight that
Location advantage theory helps the organisation in going to international operation successfully.

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References
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Adewumi, B. A. (2008a): Fruit Production and Processing. Option for Rural Industrialization
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Bijaoui, I. (2016). SMEs in an Era of Globalization: International Business and Market Strategies.
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