The International Corporation operates in a kind of vacuum. . . . It is constantly exposed to the danger of expropriations, discriminatory legislation, and the hatred and opprobrium of the people and the countries whom on the whole it serves. It seems to be one of the unfortunate facts of society that being merely useful is a poor source of either prestige or legitimacy.
Kenneth E. Boulding
Tata Motors' recent launch in India of the much-awaited low-priced Nano minicar is opening new opportunities for the budding automotive firm. Jamshed Contractor, Tata Motors' newly appointed senior vice president for international operations, is narrowing down strategic options for Africa. Nigeria and South Africa stand out as potentially lucrative markets; with populations approaching 100 million and gross domestic product (GDP) per capita higher than most African nations, Nigeria and South Africa could be the early targets of market entry, although both countries already have multiple, albeit small-scale, automotive manufacturing operations—mostly in the form of local assembly subsidiaries of global car companies.
What entry strategy should Tata Motors pursue: exporting to test African consumers' appetite for the Nano, manufacturing under license to speed up market penetration while keeping entry cost to a minimum, or bolder full-fledged entry “en force” through foreign direct investment? In many ways this early decision ...