Strategic International Expansion Opportunities in Nigeria for Selected Finnish Industries

Abstract

The benefits that accrue from internationalization have prompted many corporations to globalize and expand their operations into foreign markets. Today, companies no longer rely only on their domestic business domains but rather actively exploit opportunities elsewhere to boost their performances in order to remain competitive, profitable, and sustainable. To this end, they continuously study and analyze the business potential of various countries and regions of the world with the aim of expanding their tentacles outwards into those that offer potential prospects. Consequently, it has become common to see corporations from other countries and regions of the world actively and gainfully engaged in businesses in places naturally considered foreign. For instance, Nokia, though a Finnish corporation, has become a common household name in every country of the world not only because their products are ubiquitous but also due to the fact that the company has increased its business activities in foreign markets, building and establishing new plants and production facilities in different parts of the globe. Similarly, major corporations like Wal-Mart Stores, Royal Dutch Shell, Exxon Mobil, BP, Sinopec Group and a host of others have their influences felt in every part of the world.

However, it is highly regrettable that despite its role as a major technology base with numerous indigenous multinational corporations which have enviable global outreach, Finland has hitherto failed to grasp the business opportunities offered in Nigeria, a country that is highly blessed with huge natural and human resources. Consequently, this thesis aims at highlighting areas of business interest where Finnish industries can actively invest in the Nigerian economy as part of their strategic international business expansion process. It is noteworthy that a few Finnish companies are already doing business in Nigeria however, this work postulates that their activities in the country so far are very infinitesimal relative to the huge potential the Nigerian market can offer to Finland.

This thesis is structured in such a manner that the first chapter sets the introduction and background of the discussion. The second chapter focuses on the theoretical framework, and discusses existing theories and concepts dealing with the internationalization process. Chapter three highlights the Nigerian market with a brief introduction of the country, its major industries, the business environment, and a discussion on the prevalent opportunities in Nigeria which Finnish firms can exploit and invest in the country. The fourth chapter focuses on how to strategize business success in Nigeria, identifying and discussing important issues which Finnish companies seeking to do business in the country must take note of. Finally, chapter five concludes the thesis outlining the results, procedures, recommendations, and possible limitations to the effectiveness of the results.

The main outcome of the thesis is a framework which links various Finnish industries and some of their major constituent firms to the major industrial sectors of the Nigerian economy. It is obvious that doing business in a new and vast international environment like Nigeria which is psychically, physically, technologically, and culturally distant from Finland and having numerous environmental challenges and threats might not be an easy process. However, it is important to point out that recent reforms and measures embraced by the Nigerian government as well as efforts towards creating an investment-friendly environment in the country have raised the level of optimism among existing and potential investors in the nation’s economy. Efforts are also made to highlight how Finnish firms can balance their business activities in Nigeria with healthy corporate practices which would create high potential for profitability and sustainability. /Kir11