Market Challenges Faced by Multinational Corporations in Frontier Markets : The Case of Lebanon

Sammanfattning: Aim: This research aims to analyze the different market challenges faced by multinational corporations when operating in frontier markets, taking the Lebanese market as the case example. Methodology: The adopted methodology is based on a perspective multi-case study carried out through a qualitative conduct with several multinational corporations operating in frontier markets and Lebanon in specific. Accordingly, the data collection is based on semi-structured face-to-face, telephone and email interviews with different personnel in allocated companies based on their observations and experiences regarding business operations and market conditions in the country. Subsequently, the gathered primary data is analyzed, discussed and compared with secondary data provided by academic journals, books and trustworthy databases. Findings: Against the background of growing international competition companies increasingly follow internationalization strategies and expand their operations into new markets. Thereby, frontier markets, a subcategory of emerging markets, gain in importance. Simultaneously, new opportunities often go hand in hand with various risks and challenges. In this study four different categories of market challenges were applied and investigated: (1) Political Instability; (2) Economic & Financial Constraints; (3) Corruption & Nepotism; and (4) Cultural Differences. The interviews conducted with several MNCs operating in Lebanon devoted that only the country’s Political Instability affected the case companies’ business operations. Economic & Financial Constraints played a tangential role. Whereas, Corruption & Nepotism and Cultural Differences did not affect the enterprises’ operations at all. Hence, the primary data gathered revealed partially contradictory results in comparison to the findings obtained from the literature review. Contribution: This study addresses various market challenges occurring in frontier markets, a comparably new and uncharted subcategory of emerging markets. Particularly, the market challenges in the case country Lebanon are unexplored yet. Thus, the study contributes novel results and aims to close a research gap. Limitations: The findings presented cannot be generalized, neither to other ME countries nor to frontier markets in general. The scope of this study is limited to one specific market, providing companies’ perceptions about various market challenges when operating in Lebanon. In addition, due to the applied qualitative approach and the authors’ geographical distance to the researched market, the sample size is relatively small limiting the generalization of the study outcomes. Suggestions for Future Research: Due to the recently introduced terminology and categorization, research about frontier markets is limited yet. So far, the ME region in general and the case country Lebanon were not in the researchers’ focus regarding market challenges. This study provides initial points of reference about market challenges MNCs face in Lebanon. Further research with a greater variety of investigated enterprises and industries would be conceivable. Moreover, a research focus on SMEs operating in the country might reveal different findings.