Adaptation of Foreign Market Strategies in South Africa: Evidence from Selected Multinational Firm Performance.

B.Sc. BSc. Sipho Mukanganise, BSc BSc (Hons)

Master's thesis

Abstract:

This study aimed to assess the ways in which multinational corporations adjust their strategies for operating in foreign markets based on the South African business environment. This was done by examining the strategies adopted by the three major multinational corporations, namely Coca Cola, Nestle, and Unilever, between 2014 and 2024, utilizing financial information for the corporations and economic information for the countries. By utilizing panel data regression, the study found that the size and age of the corporations had a differential effect on the corporations’ overall performance, with larger and older corporations having higher revenue but facing difficulties in maintaining consistent return on assets. GDP and FDI inflows were found to be significant determinants for revenue and ROA, while GDP per capita and inflation had mixed effects on the corporations’ financial performance. This shows that multinational corporations cannot adopt universal strategies for conducting business, as the local economic conditions would impact the corporations’ financial performance (Barney & Hesterly, 2019; Hill et al., 2018). This study was also able to answer the four research questions as follows: Firstly, the study has determined that the overall performance of the South African economy (measured by GDP and inflation) has a significant impact on firm performance. Thus, macro-economic conditions have an impact on business outcomes. Secondly, the interaction between FDI inflows and the types of competition and performance experienced by firms varies by firm, which demonstrates that the effect of foreign investment on market dynamics varies by type of firm. Thirdly, firm-specific factors (such as size and age) have moderated the impact of the economic environment on responses by firms, indicating that the process by which a firm adapts its strategy is influenced by the internal capabilities of the firm. Lastly, the analysis has established that MNCs will change their operational/market strategies as a result of local conditions, including pricing, supply chain and market entry methods. Thus, adapting to strategic conditions is essential for success in emerging markets such as South Africa (Peng 2020; Cavusgil et al., 2014).

Keywords

Market adaptation, Emerging market, Multinational corporations, International-Local integration, Institutional environment, Dynamic capabilities, Strategic adaptation

Language used: English

Date on which the thesis was submitted / produced: 1. 4. 2026

Thesis defence

• Supervisor: PhDr. Martina Jarkovská, Ph.D.
• Reader: Petra Jarkovská, externi

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme:
Economics and Management