INTERNAIONALIZATION OF SMES; A CASE STUDY OF A FINNISH MANUFACTURING SME

Abstract

The Internationalization of SMEs represents big challenges that must be addressed. This study explores and analyses the internationalization process of a Finnish SME in the manufacturing industry.

The theoretical part of the thesis was based on earlier research and literature. The theoretical part focused on the definitions of Internationalization and the motives for internationalization. In addition, the Uppsala and the Network Models are presented and discussed in terms of their patterns and how they influence the internationalization process of the firm.

For the empirical study, a single case study is carried on the Finnish SME manufacturing gas detection systems and a qualitative research method has been applied in this study. Data were gathered by conducting face to face interviews.

The study revealed that the Uppsala and Network Model describes and to some extent predicts the patterns and influencing factors of the internationalization process of the firm. The patterns of internationalization identified by the Uppsala Model are the Establishment chain and Psychic distance. The study also revealed that the Uppsala Model is based on four influencing factors; market commitment, market knowledge, current activities and commitment decisions.

The study further revealed that in the Network Model it can be assumed that the patterns of internationalization are International extension, Penetration and Integration .

Further the study revealed that in the Network Model the network category in which the firm is active in is the main driving force and influencing factor of the internationalization process.

The study concluded that a combination of the Uppsala and Network Model is able to explain the internationalization process of the studied Finnish SME. The study also concluded that the case studied SME uses a combination of the patterns and influencing factors identified from both the Uppsala and the Network Model to get the best results for their internationalization process.

Proactive and reactive motives were identified to trigger the studied SME internationalization process.