Competing Across Borders

Dr. Edward Harrison

Welcome back to the podcast, everyone. If you tuned in to our last episode, you’ll know we tackled the motivations and some core hurdles of international expansion. Today, we’re zeroing in on the key question—why do firms compete internationally in the first place? Now, from an academic perspective, there are five major reasons: attracting new customers, lowering costs through things like economies of scale, accessing low-cost inputs, exploiting core competencies, and nabbing vital resources or capabilities. But, uh, let’s not just keep it theoretical. Angela, you’ve seen this play out at the coalface. Mind giving us a real-world angle?

Angela Johnson

Absolutely, Edward. Take Tesla in China—not just about selling more cars, right? By setting up production in Shanghai, they accessed the world’s biggest EV market and dodged hefty import tariffs. That checked off new customers, cost reduction, and local resource access all in one stroke. And honestly, every international move I’ve been involved with boils down to some mix of those five drivers—even if it feels messier in practice. One fintech I advised in Johannesburg was thriving locally but felt boxed in. The CEO kept asking, “Do we double-down here, or is Kenya calling?” The lure of fresh markets is powerful, but it’s also about keeping pace if rivals start looking beyond borders.

Thabo Mbeki

Let me add to that, Angela. I’ve watched Shoprite—a South African retail giant—roll into over a dozen African countries. At first, they chased scale and new revenue, spreading their risk across Nigeria, Zambia, Angola and so on. But as we saw with their exit from Nigeria, international expansion isn’t all upside. Currency headaches, regulatory changes—those risks sometimes tip the scales. So, the opportunity is there, but if you’re not prepared for serious complexity, you could struggle.

Emily Carter

Can I jump in with a question? Do firms really have to go global? I get the opportunities, but I mean, couldn’t they just focus on dominating at home? Or is it like, “expand or die” in most industries?

Angela Johnson

Great question, Emily. Honestly, you can dominate your home market—until someone more global comes in and eats your lunch. Take MTN. If they’d stuck to just South Africa, they would never have become a pan-African telecom leader. Sometimes, standing still in your market is actually moving backward, because your competitors don’t have the same hesitation about crossing borders.

Dr. Edward Harrison

And that’s precisely where strategy comes in—balancing the risks of stretching too far against the risks of missing out. As we discussed last episode, every international leap is a calculated gamble. For those listening, if you were that fintech CEO, what would you do: defend your turf or chase opportunity abroad? It’s not a simple choice—let’s reflect on that as we head into the next layer of difficulty.

Dr. Edward Harrison

So, expanding internationally sounds promising—but the reality is much messier, isn’t it? Let’s unpack why crossing national borders multiplies the strategic challenges. Angela alluded to currency headaches. Thabo, can you dig into what makes strategy so much trickier across countries?

Thabo Mbeki

Absolutely, Edward. There’s this idea that strategy just gets… exponentially more complex as you add countries. Each nation’s got its own flavour—different government policies, tax rules, regulatory hoops, and, most of all, home-country advantages. For example, Germany dominates auto and engineering because of their skilled labour and world-class suppliers—what Porter’s Diamond Model calls “factor conditions.” Meanwhile, in South Africa, our advantage is resources: we’ve got platinum and gold. But let’s not forget, those same natural assets make us a lightning rod for political debates, like nationalisation. Investors have to weigh location benefits against political and currency volatility all the time.

Angela Johnson

Currency is a big one, Thabo. I once worked with a South African wine exporter—they were always watching the rand move against the euro and pound. If the rand drops, their wine gets cheaper in Europe, which seems good, but they also have to deal with shifting tastes—German consumers like drier wines, while Brits want something fruitier. To juggle all this, they hedged currency risks and tweaked their offerings by market. That sort of flexibility isn’t optional if you’re selling across borders.

Emily Carter

That’s fascinating because, like, as a student, you think it’s mostly about translating your website or changing your packaging—but actually, it’s about so much more: policies, taxes, currency, you name it. I guess, uh, I hadn’t realised how many ways things can go wrong if you don’t pay attention to all those differences when crafting your strategy. And government incentives can change overnight, can’t they?

Thabo Mbeki

Exactly, Emily. Where was I going… oh yes. Even big players get tripped up—think of mining companies when the law changes, or a new tax shows up. There’s just no “set and forget” in international markets. Companies have to be nimble, adapt to evolving regulations, and sometimes even rethink their entire model for each new country.

Dr. Edward Harrison

Spot on—the takeaway here is the international landscape is a shifting puzzle. As we touched on previously, risk management tools like hedging, supply diversification, and local partnerships become essential. Students listening, what risks would you face if your business spanned healthcare in Brazil or renewable energy in India? Complexity is the name of the game—but also the source of competitive advantage if you get it right. Now, let’s see how these complexities shape the concrete decisions about market entry and strategy.

Dr. Edward Harrison

Alright, with all those challenges in mind, let’s talk about how companies actually make the leap into foreign markets. Angela, can you run us through the main ways firms enter new countries?

Angela Johnson

Sure thing. So, it’s rarely a one-size-fits-all. The big five modes of entry: exporting, licensing, franchising, acquisitions or greenfield subsidiaries, and joint ventures or alliances. Each has trade-offs. For example—Starbucks does a lot with joint ventures and franchising in Asia, letting them scale quickly without swallowing all the costs and risks themselves. On the other hand, acquisitions give you more control—like Walmart grabbing Massmart here in South Africa—but you also inherit all the headaches around integrating cultures and systems.

Thabo Mbeki

From an African perspective, Nando’s is a classic. They franchise globally but always, always keep peri-peri chicken at the core. In India, they added more vegetarian options—so they flex the model, but stay true to their competitive strength. And when it comes to starting from scratch—like a greenfield investment—it’s a much slower path, but you design your operations your way from day one. Risky, but sometimes worth it if you want total control.

Emily Carter

Makes sense. Something I noticed in my reading: single-serve shampoo sachets by Unilever in India—such a simple idea, but it totally changed the game for low-income consumers and made it profitable for the firm. And then there’s Capitec Bank in South Africa, which, um, focused on basic, affordable banking rather than fancy products and ended up outsmarting big internationals. So is it fair to say the best strategy is about matching the entry mode and business model to the realities of the market?

Angela Johnson

Absolutely, Emily. Whether you go for multi-domestic (adapt everything locally), global (standardise and scale), or transnational (balance both), it’s about fit. Like McDonald’s is multi-domestic—lots of local menu tweaks. Apple is global—you get nearly the same device worldwide. MTN? They’re a transnational story—standard infrastructure and brand, but product flexibility depending on the market. No silver bullet, just what works for your objectives and the market’s needs.

Thabo Mbeki

Spot on, Angela. MTN in Uganda—massive focus on mobile money, because that’s what local consumers need. But in South Africa, banking works differently, so they adjust. That local intelligence is why some succeed where others fall flat. If you try to copy-paste a strategy without adapting, well, you’ll see why global brands sometimes stall out in developing markets.

Dr. Edward Harrison

Right, so to wrap up: international competitiveness comes from fitting strategy to both your own strengths and the context you’re entering. Sometimes that means going big, sometimes niche, but always with eyes open to the local realities. Thanks to everyone around the table—Angela, Thabo, Emily—for today’s insights. And to our listeners, keep reflecting on these frameworks and examples as you chart your own international strategies. We’ll see you next time. Cheers everyone!

Angela Johnson

Thanks Edward, thanks Thabo, thanks Emily—always great exchanging stories. Until next time, everyone.

Thabo Mbeki

It’s been a pleasure, folks. Don’t forget, Africa’s full of opportunity—if you respect the complexities! Goodbye!

Emily Carter

Bye all! And thanks for helping make this so much clearer—I’ll definitely be thinking differently about my next case study. See you next episode!