Decisions under Uncertainty in Internationalisation: A Study of the Strategic Decision Process when Entering South Africa

Jesper Hvilsby Ulrich & Ricky Nørris Rask Thomsen

Student thesis: Master thesis


Danish companies are looking for new growth markets and an increasing number of them find the African continent interesting. South Africa has by the recent inclusion in the BRICS countries and a successful 2010 FIFA World Cup opened the eyes of many foreign companies and investments in the country has been growing ever since. Danish companies have also invested in the country and some have made entries. Many managers however have prejudices about African business culture which lead them to shy away from the opportunity and decide to enter other markets. The fear of the unfamiliar and the uncertain thereby becomes a barrier that blocks many from becoming part of the African growth. This is often due to the fact that management have a hard time trying to develop an entry strategy as a result of limited knowledge about the complex market. This thesis explores how management in the case company AluFlam can deal with the strategic decision process when entering South Africa. In order to assist the management in making informed strategic decision, a strategic tripod tool is used to explore the environment through the institutional-based view, the industrybased view and the resource-based view, thus providing information and data about the complexity that can be useful for management to take into strategic consideration before strategic action is started. However, a tripod study can only be used to get a basic understanding of the market as an endless number of actors create a dynamic environment around the entry. To get an understanding of the internal and external factors and actors that influence an entry process, an actor network analysis of a prior entry is made. This analysis provides knowledge about how certain actors can influence managerial decisions and how management can deal with the difficulties that arise when actors in the network act in unexpected manner. As a result the realised strategy could be a combination of the intended deliberate strategy and emerging unknowns that will affect managerial decisions in the process of entering. The managerial task is therefore to take decisions where the company can secure efficiency and control and at the same time be flexible enough to adapt to shifting factors in the environment to achieve competitive advantages.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
Publication date2012
Number of pages122