How do Swedish consumer product-oriented SMEs manage risks in an international market expansion?

Abstract

Swedish consumer product-oriented SMEs internationalize to expand their companies. However, foreign market expansion exposes them to new measurable risks and unpredicted uncertainties. This thesis aims to explore how such companies manage risks in their international market expansion by conducting a qualitative multiple-case study where nine firms were interviewed. The results of the study found that most companies’ risk management was reactive in the early stages of their journey. As time progressed and knowledge was accumulated, they found the importance of belonging to networks and nourishing their partnerships, as this would reduce some of their risks. Further, the younger the company, the more guidance for decision making was found through what they could afford to lose, rather than how they could maximize their profits. As some of the companies got older and matured, their risk management incrementally developed into a more proactive approach. The companies had varying combinations of courage and caution in their approaches to risk management in their internationalization journey. Therefore, the recommendation was for each company to find its own equilibrium to enable sustainable growth and survival of unexpected obstacles. However, it is important to acknowledge that finding the right balance may involve setbacks along the way.