Assignment 3 Semester 2 2025
Due Date: 3 November 2025
Detailed solutions, explanations, workings
and references.
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, 1. INTRODUCTION
Mantashe Auto Components is a South African SME that manufactures brake
systems and suspension parts for the automotive industry. The business is planning
to expand into Kenya, a country known for its strong automotive import-assembly
market and its position as a regional hub in East Africa. This assessment explores
Mantashe’s international expansion strategy through a Joint Venture with a local
partner in Kenya. The following sections will examine whether this entry mode is
suitable for the business, how it can address local skills gaps, what leadership styles
and cultural challenges may arise, and how technology can improve the supply
chain. The report will end with a summary of the main points and personal reflections
on the learning experience.
2. ENTRY MODE
Mantashe Auto Components plans to enter the Kenyan market through a Joint
Venture (JV) with a local partner. This strategic entry mode can offer both benefits
and risks. According to Peng and Meyer (2019), JVs are a common entry mode
when businesses want to share risks, reduce costs, and gain access to local
knowledge. For Mantashe, a JV is likely to help overcome entry barriers in Kenya by
using the local partner’s networks, understanding of regulations, and market access.
One key advantage of a JV is the ability to combine resources. In Mantashe’s case,
this includes pooling manufacturing expertise, supply chains, and skills. This can
lead to a stronger competitive position in Kenya’s growing automotive industry (Peng
& Meyer, 2023). Another benefit is shared financial risk. Entering a foreign market
alone can be costly, but with a partner, Mantashe can reduce start-up and
operational costs.
However, JVs also have limitations. If the goals or values of the two partners do not
align, the partnership may experience internal conflict, reduced trust, and operational
inefficiencies (Peng & Meyer, 2019). The danger of over-reliance on the local
partner's systems may also prevent Mantashe from building its own local capacity,
creating future dependency and weakening long-term sustainability.
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