Abstract:

The purpose of this study was to establish both the internal and external factors that influence the internationalization of Kenyan manufacturing firms and also determine their preferred entry mode choice. The study was guided by the following research questions: how do the firm specific factors influence internationalization of Kenyan manufacturing firms? How do the external environment factors influence internationalization of Kenyan manufacturing firms? And what is the preferred entry strategy used by these of Kenyan manufacturing firms? The researcher adopted a survey design to facilitate collection of original work and for ease of comparison of data collected. The total population of this study was 4,110 employees located at the Head Offices of Bidco in Thika, Interconsumer and Unga Limited both in Nairobi. This population comprised of 63 managers and 4,046 employees. The study adopted stratified sampling technique. The population was stratified into five groups: top level management, middle level management, lower level management, full time employees and part time employees. The data was collected using a structured questionnaire that was administered personally to the respondents. The data was then coded and analyzed using correlations, regressions and coefficient of variations with the aid of Statistical Package for Social Sciences (SPSS). The findings indicated that there was a significant and strong correlation between firm specific factors, external environmental factors and internationalization. Under firm specific factors such factors as firm’s assets capability and skills, global mindset, management attitude and entrepreneurial orientation had a significant and strong correlation to internationalization of the firm. Under external factors, both home and host country factors have a significant and strong correlation on the entry mode of a firm. This suggests that manufacturing firms should focus on all these factors because they have an impact on their internationalization in terms of how many subsidiaries they have and the entry modes. The main conclusion is that the firm’s resources are essential for a firm to internationalize and that both the home country factors and host country factors should also be considered in internationalization. With regards to the preferred entry mode by the manufacturing firms, Joint Venture and Greenfield were the commonly used modes. The study recommends that Kenyan manufacturing firms should consider all their assets, capabilities and skills and all the aspects of their external environment that are likely to affect them when internationalizing. Industry regulations, standards, trade barriers must be taken into consideration when a firm wants to internationalize because they affect the company’s operations in the host market. As a suggestion for future studies, the researcher recommends that future researchers should investigate on the Kenyan MNC market growth strategies in the international markets. In addition, future researchers can also conduct a study to determine which factors influence internationalization of Kenyan Service firms.