EXECUTIVE SUMMARY This study contains the findings and analysis of the research seeking to find a solution for a real business problem. The research in management of International Business seeks to solve the problem of an international business by finding the most appropriate way for it to expand into a new market. The research contains the analysis of the business climate of the country of the business entry. The country of choice is South Africa, which is a member state of South African Development Community (South African Development Community 2012) SADC is a regional block in Africa analysed in the report giving emphasis to the policies that shape its business climate.
The report gives details of the KenolKobil Group Company Limited, a Multinational Enterprise under the Petroleum Sector. It analyses the strategies and conditions that will give this company access to South Africa and operate competitively with already established companies from the oil sector. The report contains details on the Petroleum Industry that enables the placing of KenolKobil in context. Finally, it analyses the Foreign Market Entry Mode choice that would be optimal for KenolKobil to colonize a new region.
The report concludes that it is possible for KenolKobil to venture into South Africa because there is a favourable business climate. The SADC block is accommodative to investment despite the competitive challenge that KenolKobil will face to establish itself in South Africa. The petroleum sector is a highly competitive one and South Africa hosts many large and well-established Oil Companies. These companies will be a lot to compete with, but following the record of accomplishment and strategies, it will be possible to compete.
The Joint venture Mode is the ideal entry into South Africa. Sanol Oil is the established ideal venture partner because it has its headquarters in South Africa and has been in operation for long. The report has established that it is easier for trade within the SADC block than for a non-member state. The host country of KenolKobil is Kenya, a country outside the SADC regional block, thus the choice of Sanol Oil to counter possible problems. TABLE OF CONTENTS EXECUTIVE SUMMARY2Economic condition5Major trade and investment partners6Growth and potential6Markets, distribution and demand patterns6Human and Natural Resources7Political-economic risk7ANALYSIS OF THE SOUTH AFRICAN DEVELOPMENT COMMUNITY (SADC)8Trade and investment policy/strategy of the regional organization9Advantages of being foreign investors in the region9THE KENOLKOBIL GROUP LIMITED ANALYSIS10Resources11International experiences and strategy11PETROLEUM INDUSTRY ANALYSIS12MODE OF ENTRY14JUSTIFICATION15Choice of Partner Company15CHOICE OF MODE OF ENTRY16RECOMMENDATIONS17CONCLUSIONS17REFERENCES18ANALYSIS OF THE REPUBLIC OF SOUTH AFRICARepublic of South Africa is the largest state in the SADC region at the southern end of Africa.
It has a population of approximately 51 million people divided into nine provinces (Guy 1996). Economic conditionThe country has the largest income in the SADC region and the whole of Africa and 28th largest globally.
The country ranks the fifth at per capita income in Africa (World Bank 2012)