A STRATEGIC MODEL OF MACRO-ECONOMIC AND SUPPLY CHAIN FACTORS THAT INFLUENCE THE DECISION-MAKING PROCESS OF SA RETAILERS WHEN EXPANDING THEIR FOOTPRINT IN AFRICAN COUNTRIES

• Lizet Engelbrecht University of Stellenbosch
• Antonie Van Rensburg University of Stellenbosch

DOI:

https://doi.org/10.7166/29-4-1956

Keywords:

Foreign market expansion, Macro-economics, Retail supply chain strategy, Complex decision-making, Model synthesis, Analytical hierarchy process, Strategic profit model

Abstract

As part of the era of globalisation, the foreign market expansion of retailers is a trend that draws the attention of economists and researchers alike, and is an ever-expanding field of scholarly review. Africa is no exception to the process of globalisation, and as the local South African retail market becomes saturated with increasing levels of competition, large retailers are gradually experiencing more pressure to expand their footprint into other African countries. Foreign market expansion is a business decision that requires a structured analytical framework to assist in the decision-making efforts of potential foreign investors. Models can be synthesised to assess and prioritise which market, country, or region to enter next; what the opportunities and risk of such a move will be; and what the business case would look like in terms of cost and benefit. Only a limited amount of literature discusses this topic in the specific context of South African retailers, creating an opportunity for further research. This paper presents a strategic decision-support model to assist South African retailers in making well-informed decisions about which sub-Saharan African market to enter next. A holistic approach is taken that covers various disciplines, including supply chain management, economics of development, and financial management.