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International Journal of Management and Marketing Systems
journals@arcnjournals.org 56 | P a g e
Comparative Analysis of U.S and Chinese Based Companies
Internationalization Strategies and its Implications on Local
Market Behavior: A Case of the Food and Beverage Market
in Nigeria
Coker, Preye Robert1; Macaulay, Onovughakpo Augustine2, PhD; Idemudia,
Sunday Aliyu3; Ule, Prince Alamina4
1Doctoral Candidate, Department of Marketing, Niger Delta University, Bayelsa State, Nigeria.
E-mail: cokerresearchscholar@gmail.com
2Department of Management, Igbinedion University, Okada.
3,4Doctoral Candidates, Department of Management, Niger Delta University, Bayelsa State,
Nigeria.
Abstract: As the domestic market becomes saturated with less opportunity due to globalization and
regional integration, companies around the world are forced to seek for external opportunities in order to
remain in business and be competitive. Based on this assertion, this paper seek to examine critically the
internationalization strategies of U.S and Chinese based companies and its implications on local market
behavior of the food and beverage market in Nigeria. We theoretically analyzed this paper from three
strategic stand points such as corporate core values, modes of entry and market entry strategy of these
two economic super powers. The paper revealed that neither U.S nor Chinese Companies does not have
best strategy for internationalization; rather the best strategy depends on several key factors ranging
from the firm international experience, the resources available, nature of the market, competent
personnel to manage overseas marketing operations, economic considerations, strategic goals/objectives,
attitude and orientation of top management and type of product; though the management orientations of
the companies from the two economic super powers differs significantly in terms of corporate core values
and international marketing strategy. The emergence of these two super powers has really impacted
positively on local market behavior in Nigeria’s food and beverage market in terms of improve
technology, knowledge spillover, quality products/services, wealth creation and marketing expertise.
Today Nigeria’s local firms have started going global because of the technology and marketing
knowledge spillover gained from them.
Keywords: Internationalization strategies, Food and Beverage Market in Nigeria, U.S and Chinese
Companies.
1. Introduction
International trade is booming and global competition is intensifying (Kotler & Armstrong,
2010) among nations as a result of the increasing level of globalization of the world economy
and regional integration. Based on this development many companies of the world have
International Journal of Management and Marketing Systems
ISSN: 2384-537X, Volume 13, Issue 9, (February, 2021) pages 56 - 68
www.arcnjournals.org
International Journal of Management and Marketing Systems
journals@arcnjournals.org 56 | P a g e
Comparative Analysis of U.S and Chinese Based Companies
Internationalization Strategies and its Implications on Local
Market Behavior: A Case of the Food and Beverage Market
in Nigeria
Coker, Preye Robert1; Macaulay, Onovughakpo Augustine2, PhD; Idemudia,
Sunday Aliyu3; Ule, Prince Alamina4
1Doctoral Candidate, Department of Marketing, Niger Delta University, Bayelsa State, Nigeria.
E-mail: cokerresearchscholar@gmail.com
2Department of Management, Igbinedion University, Okada.
3,4Doctoral Candidates, Department of Management, Niger Delta University, Bayelsa State,
Nigeria.
Abstract: As the domestic market becomes saturated with less opportunity due to globalization and
regional integration, companies around the world are forced to seek for external opportunities in order to
remain in business and be competitive. Based on this assertion, this paper seek to examine critically the
internationalization strategies of U.S and Chinese based companies and its implications on local market
behavior of the food and beverage market in Nigeria. We theoretically analyzed this paper from three
strategic stand points such as corporate core values, modes of entry and market entry strategy of these
two economic super powers. The paper revealed that neither U.S nor Chinese Companies does not have
best strategy for internationalization; rather the best strategy depends on several key factors ranging
from the firm international experience, the resources available, nature of the market, competent
personnel to manage overseas marketing operations, economic considerations, strategic goals/objectives,
attitude and orientation of top management and type of product; though the management orientations of
the companies from the two economic super powers differs significantly in terms of corporate core values
and international marketing strategy. The emergence of these two super powers has really impacted
positively on local market behavior in Nigeria’s food and beverage market in terms of improve
technology, knowledge spillover, quality products/services, wealth creation and marketing expertise.
Today Nigeria’s local firms have started going global because of the technology and marketing
knowledge spillover gained from them.
Keywords: Internationalization strategies, Food and Beverage Market in Nigeria, U.S and Chinese
Companies.
1. Introduction
International trade is booming and global competition is intensifying (Kotler & Armstrong,
2010) among nations as a result of the increasing level of globalization of the world economy
and regional integration. Based on this development many companies of the world have
International Journal of Management and Marketing Systems
ISSN: 2384-537X, Volume 13, Issue 9, (February, 2021) pages 56 - 68
www.arcnjournals.org
International Journal of Management and Marketing Systems
journals@arcnjournals.org 56 | P a g e
Comparative Analysis of U.S and Chinese Based Companies
Internationalization Strategies and its Implications on Local
Market Behavior: A Case of the Food and Beverage Market
in Nigeria
Coker, Preye Robert1; Macaulay, Onovughakpo Augustine2, PhD; Idemudia,
Sunday Aliyu3; Ule, Prince Alamina4
1Doctoral Candidate, Department of Marketing, Niger Delta University, Bayelsa State, Nigeria.
E-mail: cokerresearchscholar@gmail.com
2Department of Management, Igbinedion University, Okada.
3,4Doctoral Candidates, Department of Management, Niger Delta University, Bayelsa State,
Nigeria.
Abstract: As the domestic market becomes saturated with less opportunity due to globalization and
regional integration, companies around the world are forced to seek for external opportunities in order to
remain in business and be competitive. Based on this assertion, this paper seek to examine critically the
internationalization strategies of U.S and Chinese based companies and its implications on local market
behavior of the food and beverage market in Nigeria. We theoretically analyzed this paper from three
strategic stand points such as corporate core values, modes of entry and market entry strategy of these
two economic super powers. The paper revealed that neither U.S nor Chinese Companies does not have
best strategy for internationalization; rather the best strategy depends on several key factors ranging
from the firm international experience, the resources available, nature of the market, competent
personnel to manage overseas marketing operations, economic considerations, strategic goals/objectives,
attitude and orientation of top management and type of product; though the management orientations of
the companies from the two economic super powers differs significantly in terms of corporate core values
and international marketing strategy. The emergence of these two super powers has really impacted
positively on local market behavior in Nigeria’s food and beverage market in terms of improve
technology, knowledge spillover, quality products/services, wealth creation and marketing expertise.
Today Nigeria’s local firms have started going global because of the technology and marketing
knowledge spillover gained from them.
Keywords: Internationalization strategies, Food and Beverage Market in Nigeria, U.S and Chinese
Companies.
1. Introduction
International trade is booming and global competition is intensifying (Kotler & Armstrong,
2010) among nations as a result of the increasing level of globalization of the world economy
and regional integration. Based on this development many companies of the world have
International Journal of Management and Marketing Systems
ISSN: 2384-537X, Volume 13, Issue 9, (February, 2021) pages 56 - 68
www.arcnjournals.org
International Journal of Management and Marketing Systems
journals@arcnjournals.org 57 | P a g e
realized the fact that their domestic market will inevitably become saturated and no longer as
rich in opportunity; which in the long-run foreign companies will definitely penetrate the
market (Kotler & Armstrong, 2010; Yu & Fu, 2013). It is obvious that domestic firms that
refused to go global, definitely risk the chance of going out of business by losing the home
market to foreign companies or hamper their growth level. Perhaps this reason has induced
many local small and medium scale enterprises to internationalize by becoming transnational
corporations or multi-national enterprises (MNEs). That is why today a lot of companies in
the world most especially from the western economies like U.S and Eastern Europe, Latin
American, Asian and African companies are striving to expand into foreign markets to
become more competitive. Among various international companies, the U.S and Chinese
firms were chosen to be the focus of this paper because these two nations are at the front
burner of modern day international marketing.
The U.S economy is regarded as the biggest economy in the world with nominal GDP of
$21.44 billion dollars and followed by China with nominal GDP of $14.14 billion dollars in
2019 (Investopedia, 2020). Initially, China economy was very slow due to a centrally-
planned closed economy but of late, it is the fastest growing economy in the world and
presently threatening to surpass the U.S economy. The reason for the rapid growth of China’s
economy is attributed to the open door policy she adopted in 1992-2001 (Zakic & Radisic,
2017), coupled with financial assistance from the home financial institutions (Benson, 2019)
and special grants/loans offered to developing nations that are in needs; which has paved way
for the fast penetration of Chinese firms expanding into foreign markets (Brunswick Report,
2019). This development has provoked the U.S and other western economies (Zhao, 2018) by
infuriating international trade wars, thereby influencing local market behavior of host
countries around the world. Some have resorted to increasing international trade barriers to
restrict the influx of these multinational giants to protect infant industries and domestic firms,
while some of the local firms have decided to improve on their product/service offerings or
merge with bigger firms by pooling resources together to compete favorably with them.
The internationalization strategy which has to do with mode of entry and market entry
strategy of these two economic super powers have great implications on local market
behavior in regards to host country prosperity. Their presence, coupled with professional
management practices and international marketing strategies have change the way businesses
are being done in the local market. They provide managerial skills and competence that
improve production and marketing as well as promote export competitiveness in the local
market (Ferdausy & Rahman, 2009). The food and beverage market in Nigeria have really
benefited from the emergence of U.S and Chinese based firms such as Coca-Cola, Pepsi-Cola
and C-Way Nigeria Drinking water science and technology Co. LTD in terms of value added
services and wealth creation. The progress made so far has helped to groom local firms to
improve product and service quality, distribution, advertising, packaging, pricing and
marketing research. Today, Nigerian food and Beverage firms are beginning to go global by
competing with global brands; a good example is Chi-Limited producer of quality fruit juice
incorporated in 1980 which is currently acquired by U.S multinational giant Coca-cola
(Ishaw, 2017; Uche, 2019). Even in London people can now see made in Nigeria goods in
grocery stores (Uche, 2019).
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Despite the importance of U.S and Chinese based firms’ internationalization strategies and
its impacts on local market behavior of host countries; no study has examined the
comparative analysis of U.S and Chinese based Companies internationalization strategies and
its implications on local market behavior. The only study that attempted to critical compare
the mission statement of these two countries were carried out by Lin, Huang, Zhu & Zhang
(2019). This paper seeks to close this gap.
To facilitate a comparison of U.S and Chinese Companies internationalization strategy, we
looked at their corporate core values by comparing them as well as using the two dimensions
of internationalization strategy such as mode of entry and market entry strategy of these two
economic super powers and its implications on local market behavior of food and beverage
market in Nigeria.
Based on the above objective, this paper seeks to ask the following questions:
Does the mode of entry and market entry strategy in foreign markets differ between
U.S and Chinese based Companies?
Does U.S and Chinese firms differ in their corporate core values?
Does internationalization strategy of U.S and Chinese Firms impacts significantly on
local market behavior in the food and beverage sector in Nigeria?
The findings from these questions raised are also justification of this paper.
2. Literature Review
2.1 The Food and Beverage Market in Nigeria
The drastic decline in crude oil price in the 1980s created room for Nigeria to nose-dive into
recession and this gave rise to plummeted foreign inflows which adversely affected Nigeria’s
capacity to import goods by encouraging local companies to spring up by looking inwards in
exploiting local production for import substitution (Ishaw, 2017). This development brought
about many food and beverage companies including foreign ones into Nigeria’s market in
order to meet local demands. The sector is diverse and has a wide range of different products
and production processes that could be grouped into distinct classifications which include;
flour and grain, soft drinks, carbonated water, breweries, starch, food products/eateries, meat,
poultry, fish, tea, coffee, fruit juice, animal feed, sugar, distillers, blending of spirit and
chocolates (Ojo, 1998 as cited in Rosabel, 2018). Perhaps companies like Nigeria bottling
company makers of Coca-cola, Nestle foods, Cadbury Nigeria Plc, Mr Biggs eateries, seven-
up, UAC of Nigeria, Chi-Limited, Nigeria Breweries, Guinness, La cacera, Dangote
flourmill, Rite food and Royal crown cola are major participants in the food and beverage
market in Nigeria. Some of them are foreign owned companies (MNEs), while some are
indigenous companies competing in the market.
2.2 The Concept of Internationalization
Internationalization is perceived to be a dynamic concept with so many dimensions and
interpretations (Welch & Luostarinen, 1988; Dawei, 2008). The concept of internationalization
has been widely been defined as a process that used to increase the involvement of business
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activities in foreign markets (Azuayi, 2016). Internationalization involves the process of adapting
exchange transactions and product in such a way that it conforms to the needs of international
markets (Anderson, 1997 as cited in Dawei, 2008). Looking at the various definitions, it is
obvious that internationalization is perceived from two distinct strategic dimensions. One has to
do with mode of entry (i.e how to enter the market) and the other deals with tailoring product to
meet local needs ( i.e marketing entry strategy).
Apparently, extant literature on firm’s internationalization process primarily focused on multi-
national corporations expanding abroad to exploit emerging opportunities and gain competitive
advantages (Tsai & Eisingerich, 2014). In an attempt to expand abroad or going into foreign
markets requires incremental processes that need to be carried out by the firm. Perhaps early
theories of firm’s internationalization processes have come up with incremental model of
internationalization (Cuervo-Cazurra, 2010). The incremental model opines that business firms
gradually increase their level of commitment and investment as they strive to gain additional
knowledge about the foreign market they desire to enter through direct experience (Cuervo-
Cazurra, 2010; Tsai & Eisingerich, 2014). This body of research also asserts that business firms
that wish to internationalize, actually invest initially in geographically close markets (countries)
and later expand into more distance foreign markets (Erramilli, Sivastava & Kim, 1999).
2.3 Internationalization Strategy: Mode of Entry Dimension
Internationalization strategy could be achieved through different mode of entries which include:
exporting, merger and acquisition, joint venture and direct investment (Kotler & Amstrong,
2010; Parlabene, 2012; Azuayi, 2016; Zakic & Radisic, 2017).
Exporting: Internationalization strategy can be done through exporting to foreign
markets (Kotler & Armstrong, 2010). Companies do export their surpluses from time to
time or it may make active commitment to expand exports to a particular market. Most
firms obviously commence internationalization by using indirect exporting via
collaborating with independent marketing intermediaries that has international marketing
expertise. Perhaps the company can also resort to direct exporting whereby they handle
the entire export activities themselves (Kotler & Armstrong, 2010).
Merger & Acquisition: The merger strategy relates to the coming together of two or
more firms about the same size as single new company rather than operating separately;
while acquisition normally takes place when one company out rightly purchase another
company and positioned itself as the new owner (Investopedia.com, 2010).
Joint Venture: A company can also internationalize by entering into a foreign market
through joint venturing. This has to do with joining or pooling resources together with
foreign firms to produce or market products or services (Kotler & Amstrong, 2010). They
specifically identified four distinct variants of joint venturing such as; licensing, contract
manufacturing, management contracting, and joint ownership.
Direct Investment: The largest investment in a foreign market comes through direct
investment which has to do with the development of foreign-based assembly across
national frontiers (Kotler & Amstrong, 2010). Direct investment involves a capital
investment outlay developed across national boundaries in expectation of certain returns
on the invested capital. Perhaps these investments could be perceived in different forms
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in terms of public investment by state and private investment by specific individuals or
groups as well as investment firms (Zakic & Radisic, 2017).
2.4 Internationalization Strategy: Market Entry Strategy Dimension
It is obvious that firms intending to operate in one or more foreign markets must decide to
what extent their marketing strategies and programs are aligned to meet local conditions
(Kotler & Armstrong, 2010). According to them, we have global companies that use
standardized global marketing strategy and adapted global marketing strategy to enter foreign
markets. The issues of standardization and adaptation strategy are increasingly attracting a lot
of scholarly attention due to its relevance in international marketing and extant literature
have revealed three major dimensions of market entry strategy such as total standardization,
total adaptation and contingency dimension (Zou, Andrus & Norvell, 1997). Total
standardization here implies that the same marketing strategy is adopted in mass market
(Samiee & Roth, 1992), while total adaptation has to do with customizing the marketing
strategy to meet individual market needs (Zou, et al., 1997). The contingency perspective
strikes a balance between standardization and adaptation, maintaining that the extent of
standardization or adaptation depends on the internal and external environmental factors
influencing the organization (Jain, 1989; Zou & Cavusgil, 1996).
2.5 Comparison of U.S and Chinese-Based Companies Corporate Core Values
It has been revealed in extant literature that U.S and Chinese Companies does not share the
same corporate core values. The reason is that the nature of American and Chinese
Companies are perceived to have different corporate background in terms of ownership
structure (Lin, Huang, Zhu & Zhang, 2019). They went further to say that majority of
Chinese firms highlighted on the fortune 500 Lists are mainly state-owned enterprises, while
majority of American fortune 500 firms are privately owned.
However, the mission statement of Chinese firms have societal orientation and basically
focused on the social roles of the organization to the society at large, while American firms
core values pay more attention to the satisfaction of esteem customers and partner
relationships (Lin, et al., 2019). From the above premise, it therefore means that Chinese
firms concern for her esteem customers is low as well as products and service offerings but
gives major attention to the host government, while the case is quite different for American
firms by giving more regards to customers by creating value for them with quality products
and services.
2.6 Comparison of U.S and Chinese-Based Companies Mode of Entry in Foreign
Market
The expansion of business across national frontiers allows firms to pursue growth
opportunities which are unavailable in the home market and this could be done through
different entry modes as discussed in sub-section 2.3 above. Based on the conceptualization
of entry mode, we are going to compare U.S and Chinese Companies mode of entry in
foreign markets.
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2.6.1 American Companies Mode of Entry
American firms in their relationship with European firms that the likelihood of acquisition is
decrease if the European partner is located outside the U.K, since it is the country with the
least American cultural distance (Mc Naughton, 2001). But he found that the likelihood of
joint venture is increased. Based on the above premise, it is obvious that American firms
prefer joint venture arrangement when the foreign market they want to enter is more
uncertain. This will help to provide relevant information about the market they want to enter
and ownership control (Calegario, Houston & Bruhn, 2015). Perhaps acquisition by
American companies in this case is not desirable because of the financial risk involved and
difficulty in understanding local knowledge. But if the American firm has full knowledge and
experience in the host country, they prefer acquisition entry strategy. This is exactly what
happened when Coca-cola out rightly bought over Chi-Nigeria limited a strong global player
of fruit juice soft drink market.
2.6.2 Chinese Companies Mode of Entry
When going abroad Chinese companies are more flexible in the sense that they use different
strategies in different circumstances (Zakic & Radisic, 2017). It has been revealed that
majority of private Chinese firms and entrepreneurs when internationalizing prefer to acquire
foreign firms or merge with foreign ones than concentrating in the local market (Zakic &
Radisic, 2017). However, among the prioritized investment abroad, Chinese companies
prefer export and sales outside china seconded by merger and acquisition entry strategy to
internationalize their operations overseas (Brunswick report, 2019). Most of the Chinese
companies that adopted merger and acquisition are investing in mining, oil and gas, electrical
energy sector, while investors in the automobile and machinery and equipment entered
through the Greenfield investment strategy (Frisehtakc & Soares, 2013). According to them,
merger and acquisition offer a fast route for Chinese companies looking to enter most foreign
markets. The global financial crisis created new opportunities for Chinese companies to
acquire significant stakes in large financially distress European natural resources companies
and American companies (Zakic & Radisic, 2017).
2.7 Comparison of U.S and Chinese-Based Companies Market Entry Strategies
The most vital and challenging decision facing companies when deciding to market across
international frontiers is the extent to which those operations will be the same
(standardization) or different (adaptation) from their domestic ones (Hise & Choi, n.d).
Companies from different countries have their respective challenges in terms of entry barriers
in foreign markets due to economic forces, legal restrictions, geographical forces, political
considerations and socio-cultural differences like culture and language. In this case we are
going to look at U.S and Chinese firms entering foreign markets. The question is; can they
apply the same market entry strategy in a given market? The answer is not far-fetched as we
are going to discuss each of their market entry strategies and the situations that call for a
given strategy in order to ascertain if actually they employ same strategy in foreign markets.
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2.7.1 U.S-Based Companies Market Entry Strategy
The decision for U.S based companies to enter a specific foreign market or group of foreign
markets by using standardization, adaptation or contingency strategy depends on the type of
product, the market, available resources, economic conditions, strategic goals/objectives,
attitude and orientation of top management, availability of competent personnel to run
overseas marketing operations and international marketing experience (Hise & Choi, n.d;
Douglas & Craig, 1989). It has been revealed that American companies have strong
preference for standardization strategy due to the overwhelming benefit of minimizing cost
and profit maximization (Hise & Gabel, 1995). According to Blue Back Globy (2018) that
historically, the strategic orientation of many U.S companies was to reduce operational cost.
However, U. S companies also deploy adaptation strategy when entering overseas market
that has huge cultural difference with them like countries in Asia such as China, Japan,
Singapore and India as well as some countries in Europe such as France, Spain, Portugal,
Germany and Italy etc. For example, when U.S firm Coca-Cola attempted to enter Chinese
market in 1928, they find it difficult to brand their name in Chinese language because of
cultural difference. In a similar study by Kacker (1972; 1976 as cited in Hisel & Choi, n.d)
discovered that 45% of U.S.A firms reported significant modifications of products marketed
to India. Brand names are expected to be modified carefully in order to relate with local
consumers as in the case with Coca-Cola Company in Chinese market. Perhaps cross-cultural
translation of a brand name in both content and context needs to be properly aligned in order
to be attractive or appeal to the local market as well as projecting the global image of the
brand (Alon, Littrel & Chan, 2009).
Despite the adoption of adaptation strategy by U.S based Companies in some foreign
markets; they are more prone to using standardization strategy to penetrate foreign markets;
though some adjustments are necessary due to language and cultural differences. According
to Levitt (1983) some U.S based companies have already taken absolute advantage of a
robust global market entry strategy to become global players. He further stated that American
companies had the impression that advanced technology in regards to communication and
transportation has homogenized the markets around the world; as such, global consumers
have emerged that seek more of high quality product at low prices. Ohmae (1985) re-
affirmed the above claim that consumers’ taste and preferences in terms of demand has
become relatively homogeneous; therefore firms must not be worried about the differences
(heterogeneous) in cultures, economies, and political system across international frontiers but
should view the world as a single global market. This perception is being embraced by
majority of American Companies going global.
Furthermore, in the aspect of the type of product, Boddewyn, Soehl and Picard (1986)
provided a longitudinal study of five years interval from 1973-1988 of the standardization
and adaptation strategies of U.S manufacturers of consumers’ durables, non-durables and
industrial products doing business in the European community and discovered that majority
of the respondents attested that standardization strategy is the predominant strategy for U.S
base Companies in all categories of products. In addition, Hise & Gabel (1995) and Hise &
Choi (n.d) in their studies found out that majority of American Companies including food
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and beverage companies in overseas operations were adopting the same customer service
strategies in their overseas markets as they were using same domestically, instead of the
expected adaptation configuration. The reason is that they believe that standardized
marketing mixes deployed in their domestic market is more effective and executives believe
that it will help their products to gain fast penetration easily at least cost with higher profit
margin than incorporating adaptive strategy that could give rise to incremental cost, thereby
reducing profit (Hise & Choi, n.d).
2.7.2 Chinese Based Companies Market Entry Strategy
The predominant market entry strategy adopted by Chinese based Companies is adaptation
strategy i.e customization. The reason is that China does not share the same or similar
language and culture with majority of her trading partners most especially countries in
Europe, America, Africa and part of Asia. Given that Chinese and English originated from
different historical roots, Chinese firms or brands entering foreign markets are likely to face
marketing communication challenges; hence will require adaptation strategy (Alon, et al.,
2009). It has been observed that adaptation strategy attracts incremental cost but China has a
strong competitive advantage in terms of lower costs in production, marketing and post sales
services (Micheli & Carrillo, 2015). Chinese Companies have the impression that the
international market is highly heterogeneous with diverse cultures, as such they restructure
the organization and products through adaptation (customization) to meet local demand in
each targeted segment. The product could be the same for each market segment but the
communication might need adjustment due to language barrier (communication adaptation),
while in some cases the product requires adaptation with same messages across the targeted
market segment (product adaptation). According to Micheli & Carrillo (2015) in their study
opines that the general rule of most Chinese Companies is that if the work order require a
major technological change in a product that the host country office cannot handle, then the
country of origin office takes over the restructuring (dual adaptation/invention). One
interesting issue about Chinese based Company success abroad is that they take time to study
the market conditions and behaviors of the host country in order to gain local knowledge
before investing in such country (Brunswick Report, 2019).
2.8 Its Implications on Food and Beverage Market in Nigeria
The U.S and the Chinese Companies internationalization strategies have really impacted
positively on local market behavior in developed and developing economies like the food and
beverage market in Nigeria. Perhaps several articles have been written on how firms from
these two economic super powers exercise dominance over local firms in Nigeria. A close
analysis reveals that Nigeria food and beverage market is sub-divided into several
classifications as discussed in preceding sub-heading and in each sub-sector has market
leaders dominating the sector and most of the market leaders are multinational corporations
doing business in Nigeria with head office in the country of origin.
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However, the U.S Companies in Nigeria have impacted positively to the local market in the
sense that the companies have created over 3million jobs and generated N1.4 trillion naira in
revenue (Adesoji, 2020). Over 66% of U.S based Companies have identified Nigeria as a
regional hub for their international operations in West Africa and they have a local content
target which reflects in areas such as products, people and supply chains (Adesoji, 2020).
Good examples of such U.S Companies are Coca-cola Company and PepsiCo Food
Company makers of Pepsi-Cola. Obviously, Coca-cola and PepsiCo often bring better and
more advanced products into local markets in Nigeria and local companies producing soft
drink must meet up the competition by producing quality soft drinks to remain in business. It
therefore means that the emergence of Coca-Cola Company and PepsiCo Company has made
a lot of locally produced soft drinks to improve in quality, thereby help in building export
competitiveness for local firms. Today Chi-Limited an indigenous soft drink manufacturer
has become a global player by penetrating the West African market with quality fruit Juice
(Ishaw, 2017) and Coca-cola seeing their progress level bought 40% stake in the company
and finally bought over the company (Ojekunle, 2019). Another practical example of local
firm that has gained knowledge and marketing skills from global firms is La Casera soft
drink; an indigenous brand penetrating Nigeria’s market by competing with global brands
like Coca-cola and Pepsi-Cola. In fact, U.S Companies have helped local companies in the
food and beverage market to advance their method of doing business with better technology
by creating value for their esteem customers.
More so, the Chinese companies are not left behind in the sense that their emergence in
Nigeria’s food and beverage sector has impacted positively on the local market by offering
solutions to basic Nigeria problems, thereby creating value in return (Benson, 2019). The
investment of Chinese companies in Nigeria worth over $20 billion dollars and still counting
and they have created millions of jobs to Nigerians (Odutola, 2019). It was revealed that
scores of Chinese businesses dominate the retail segment of the Nigeria’s market in various
part of the country such as; C-Way water, Viju milk, Chinese restaurant, Golden Imperial
Chinese Cuisine, Golden gate, Oasis Bakery all in Lagos and many part of Nigeria are
enjoying tremendous patronage from the local market (Odutola, 2019). Among all C-Way
water is the predominant Chinese brand in Nigeria that has penetrated the local market,
though the brand was introduced 1999 when the water market in Nigeria is already saturated
(Liaxing, 2013; Benson, 2019). Despite the late entry, the company has revolutionized the
water business in Nigeria by providing safe hygiene water for Nigeria consumers and help to
improve people’s lives. The Sanitized C-Way water products have gradually changed the
drinking habits of Nigerians. Today we have a lot of quality water in Nigeria as competitors
have flooded the market including local firms.
Finally, in spite of the positive implications of these two economic super powers, there are
negative implications as well. The presence of U.S and Chinese Companies
internationalization strategies in food and beverage market in Nigeria means that some of
these local firms that have gained prominence in the market could be acquired by these
multinational because they have the financial resources to buy them over, thereby killing
indigenous firms. These companies often edge local firms out of the market because they sell
better products and these products are often cheaper than those of local competitors.
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3. Conclusion
The objective of this paper is to critically examine the internationalization strategies of U.S
and Chinese based Companies and its implications on local market behavior of food and
beverage market in Nigeria. We theoretically analyzed this paper by using three strategic
stand points to make a comparison between U.S and Chinese based Companies
internalization strategies such as corporate core values, mode of entry and market entry
strategy and found out that these strategies are significantly different when it comes to
internationalization of firms. Perhaps the paper reveals that there is no best way to
internationalize; the best way depends on the firm international experience, resources
availability, economic considerations, strategic goals/objectives, attitude and orientation of
top management, availability of competent employees to manage the international operations,
nature of the market and type of product. The U.S and Chinese Companies virtually adopted
the same mode of entry strategies and same market entry strategies but Chinese Companies
adopt customization strategy more frequently than U.S Companies due to their corporate
ideology about the global market. The Chinese Companies perceived the world to be
heterogeneous entity with diverse cultures and demands, while the U.S companies view the
world as a single global market with homogeneous customers’ demand.
However, despite the internationalization strategy adopted by these two economic super
powers, the literature made us to understand that their emergence in Nigeria’s market has
really impacted positively on the local market behavior, especially within the food and
beverage market. One of the major positive impacts is the issue of technological spillover in
the sense that the technological base of our local firms in the food and beverage sector has
improved significantly by way of producing quality products and services with best global
corporate practices which in turn increases their export competitiveness as well as provides
millions of jobs for Nigerians by way of reducing poverty. This paper also reveals that apart
from the positive impacts, there are negative implications in regards to the presence of these
super powers in Nigeria’s food and beverage market because some of these local firms that
have gained prominence over the years in the market could be acquired by these
multinational, thereby edging them out of the market. In addition, infant industries like
majority of our small and medium scale enterprises will suffer because they lack the financial
strength to compete with them.
Therefore, we conclude that apart from the sound international business models being
practice by these two economic super powers, the secret to their success rest on innovations
through research and development coupled with strong financial system that provide funds to
assist international business and entrepreneurship. Thus, the government of Nigeria should
adopt same by encouraging our financial institutions to adequately support large, small,
micro and medium scale businesses as well as entrepreneurship in order to boost Nigeria
foreign direct investment abroad to improve our international marketing competitiveness and
foreign earnings and not to play politics with it.
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