Important Perception of Market Entry Barriers and Factors in Africa : Case Study on Ethiopia and Egypt

Abstract: Globalization, rising affluence in developing and transitional economies, improved infrastructure, and advancements in communication and information technologies have increased the opportunities for marketing services beyond borders. For the last decade African economies has been growing which has created enormous opportunity for international companies. However, foreign companies have been slow to enter into African markets. The purpose of this research is to identify important perception of barriers and factors that affect market entry decision in Africa specifically in Ethiopia and Egypt.This research is based on a qualitative case study and data is collected from primary and secondary data. The primary data are collected from four Swedish micro and small companies. The secondary data collection is based on website, and published material from accredited government, such as UN, Ethiopian investment agency and Swedish government.The major market entry barriers and factors are determined through analysis of these data. The major barriers are cost advantages incumbents, product differentiation, capital requirement, switching cost, access of distribution channel, government policy. The factors are market attractiveness, cultural distance, uncertainty, legal environment, and competition. Market entry decision is dependent on high influential perception of market entry barriers. From this research the important influential perception of barriers and factors that affect market entry decision in Ethiopia and Egypt are government policy, cultural difference, uncertainty, and legal environment. Cost advantage and switching cost are the low influential perception of barriers.