Factors influencing smes foreign market entry modes selection: the Tanzanian perspective

This study aims to examine the market entry modes particularly for SMEs based in Tanzania. Specifically, the study addressed factors influencing selection to external markets. The study focuses on a variety of SMEs engaging in different business, factors within the internal and external environment and the role played by the Government of the United Republic of Tanzania in supporting SMEs growth.The study employs thirty (30) SMEs operating in Dar es Salaam region. It used ten (10) government officials to answer the part which involved the role of the government. Both primary and secondary data collection methods were used to obtain information on the subject. The study employed both qualitative and quantitative methods of data analysis. For the qualitative data a content analysis method was used. For quantitative data the study uses descriptive analysis and Statistical too where findings were presented in tables, figures and texts. To establish the relationship among selected variables which are years of operation, firm size, firm employment, capital and the selection of entry mode, the study uses the Pearson’s correlation coefficient model. The study found out that exporting is proven to be the most popular mode of entry selected by SMEs to establish the international business. This is because it requires less commitment in financial resources and is less risky. As firms grow, their engagement in a market increase. However, the study has proven that for firms to perform better there has to be interplay between the SMEs themselves and the government. It has also found out that, the government of Tanzania has taken various initiatives to improve the performance of the SMEs sector through policy implementation, provision of capital schemes, improving education and creating market integration strategies. Form the findings of the study, one should not overlook the role played by ICT and globalization in the rapid expansion of knowledge and information all around the world. This too has hastened the pace of growth of cross border venturing by linking actors. It is recommended that further studies conducted should engage these aspects while embracing various innovative tactics in internationalization.