The pursuit of international opportunity Multiple case study of Finnish SMEs opportunity recognition and exploitation in Sub-Saharan Africa

Abstract

This thesis studies internationalization of Finnish SMEs into Sub-Saharan Africa. The study aims to investigate how Finnish SMEs recognize and exploit international opportunity into Sub-Saharan Africa. Primarily the study focuses on key decision makers, probing what kind of factors influence international opportunity recognition process in Finnish SMEs and secondarily if their decision-making mode to pursue the recognized opportunity is affected by the recognition process.

The study uses International Entrepreneurship (IE) as a theoretical lens to capture the phenomena better. Undertaking the research with an opportunity-based approach, the study reviews the opportunity theory - formation and generation of opportunity; major influential factors of opportunity recognition from SMEs perspective. Furthermore, as an opportunity is meaningful only when acted upon, the literature review is extended to include SMEs international market selection, and SMEs market entry mode from SMEs key decision makers, decision-making perspective.

Employing a qualitative research method, the research adopted multiple case study, with the empirical data collected via an interview of the key decision makers who are directly involved in the case company’s internationalization process into Sub-Saharan Africa. In an attempt to present the reader with a more profound understanding of the phenomenon as it happens from the case company’s perspective, an interpretivist approach has been used. This also allows to share each case company’s own experiences and avoid unnecessary generalizations.

The findings presented exhibit social networks as predominate influential factors in international opportunity recognition for the case companies, while prior knowledge (prior knowledge of markets, prior knowledge of ways to serve markets, and prior knowledge of customer problems (Shane, 2000, p.452) appear as the second most influential factors.

In addition, the study finds a coherent link between opportunity recognition factors and market selection and entry mode selection (opportunity exploitation). When companies recognize opportunities through social networks their decision to pursue such opportunity tends to be with no or limited planning, set unclear objective. On the other hand, when the international opportunities recognition is as a result of a combination of entrepreneurial alertness, prior knowledge the decision made is rational and strategic.