Factors Affecting the Internationalization Strategies of Ethiopian Manufacturing Firms
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Date
2022-01
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A.A.U
Abstract
This paper examines the factors that affect the internationalization strategies of Ethiopian
leather product manufacturing firms. International trade, especially export is very important for
the growth of any country. But due to various reasons, the export item that Ethiopia is endowed
with is underserved. Therefore, this paper tries to investigate the factor that contributed to the
poor performance of the leather sector. To analyze the challenging factors that led to the poor
performance of the leather sector, the researcher used internal and external environmental
factors. An internationalization strategy in this paper is represented by the entry modes, market
selection, and target customers. Primary data collection method; questionnaire is used to collect
information from the selected leather manufacturing firm located in Addis Ababa and the
surrounding special zone of Oromia region. The data is then analyzed using descriptive,
correlation, and regression analysis through SPSS 20. The findings derived from the study then
indicate that internal environment factors such as human resource factors, physical resource
factors, and organizational factors affect the international strategies of leather firms. Internal
factors such as economic forces, government, legal and political forces, competitive forces, and
technological forces affect internationalization strategies in addition to the internal factors
mentioned earlier. After the result is obtained, the researcher has forwarded policy
recommendations that can potentially improve Ethiopia’s leather sector performance. Therefore,
to improve the leather sector's performance in the international market, anyone involved should
exert their maximum effort. That means the manufacturing firms by their initiative should
identify the challenges and the improvement areas needed. After identifying the problems the
firm should take correcting measurements. From the government side, starting from policy
creation that supports leather producing firms to creating conducive environment is needed. For
instance, formulating and implementing a strong trade policy towards imported leather items
from abroad, preparing exhibitions that promote leather products at the international level,
working in changing the perceived low value of leather products in various international
markets, etc is expected from the government.
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Keywords
internationalization, internationalization strategy, leather products