Market Entry Under Institutional Fragmentation Strategic Responses from the Swedish Nicotine Pouch Industry Authors: Elmeida Rezniqi Mosetta Simity During Supervisor: Ramsin Yakob Master’s thesis in International Business and Trade Spring 2025 Acknowledgement We extend our sincere appreciation to all participants for their valuable contributions and support. Your willingness to generously share insights and experiences from your respective organizations has been significant in making this study possible. We also wish to convey our acknowledgement for the excellent cooperation and the time you devoted to being part of this research. Your involvement not only enriched the study but also contributed to enabling others to gain meaningful insights. We would further like to express our heartfelt gratitude to our supervisor, Ramsin Yakob, for remarkable guidance and dedication. His encouragement and invaluable feedback has been crucial in helping achieve greater depth and quality throughout the course of this study. We also want to share a recognition to the School of Business, Economics and Law in Gothenburg for providing resources and the academic environment necessary for the successful completion of this thesis. ________________________ ________________________ Elmeida Rezniqi Mosetta Simity During 2025.05.26 2025.05.26 Abstract The rapid rise in popularity for nicotine pouches across the European Union has outpaced regulatory development, creating a fragmented institutional landscape. Given its novelty and the perceived harmful nature, firms face significant uncertainties related to unharmonized regulations and societal acceptance. Our study explores how nicotine pouch firms navigate challenges and strategically manage market entry in dynamic contexts, shaped by both formal and informal institutional pressures. Drawing on a multiple case study with six Swedish nicotine pouch companies, the research reveals that firms turn to non-equity entry modes, minimizing risk and resource commitment. It further demonstrates how digitalization enables firms to use e-commerce as a strategic loophole, facilitating cross-border operations without physical presence and allowing them to bypass regulatory inconsistencies through regulatory arbitrage. Contrary to traditional approaches, firms do not merely adapt to institutional conditions, rather they actively shape their environments by leveraging market gaps. Along with formal institutions, informal pressures also shape the institutional environment where local adaptation proves critical in achieving legitimacy and consumer acceptance. This study contributes to the international business field by extending understandings of market entry strategies in unharmonized regulatory contexts. The findings provide insights for firms facing similar uncertainties in rapidly evolving global industries. Keywords: Nicotine pouches; Market expansion; Entry mode; Unharmonized regulations; EU common market; Perceived harmful product; Institutional environment Table of Contents 1. Introduction........................................................................................................................................ 1 1.1 Background..................................................................................................................................1 1.2 Problem discussion......................................................................................................................3 1.3 Purpose and Research question................................................................................................... 6 1.4 Delimitation.................................................................................................................................6 1.5 Structure of the thesis.................................................................................................................. 7 2. Literature review................................................................................................................................8 2.1 Institutional Theory..................................................................................................................... 8 2.1.1 The new institutional economics......................................................................................10 2.1.2 Neo-institutionalism.........................................................................................................11 2.2 Market entry strategy.................................................................................................................13 2.2.1 Market entry literature..................................................................................................... 13 2.2.2 Market entry modes......................................................................................................... 15 2.3 Conceptual model...................................................................................................................... 20 3. Methodology..................................................................................................................................... 22 3.1 Research approach.....................................................................................................................22 3.1.1 Research design................................................................................................................23 3.1.2 Structure of the literature review..................................................................................... 24 3.2 Data collection method..............................................................................................................25 3.2.1 Primary data..................................................................................................................... 26 3.2.2 Secondary data................................................................................................................. 30 3.3 Data analysis..............................................................................................................................30 3.4 Research quality........................................................................................................................ 32 3.4.1 Credibility........................................................................................................................ 32 3.4.2 Transferability.................................................................................................................. 33 3.4.3 Dependability................................................................................................................... 33 3.4.4 Confirmability..................................................................................................................34 3.5 Ethical considerations................................................................................................................34 3.6 Limitations of methodology...................................................................................................... 35 4. Empirical findings............................................................................................................................36 4.1 Background................................................................................................................................36 4.2 Institutional environment...........................................................................................................37 4.2.1 Regulatory environment...................................................................................................37 4.2.2 Managing the regulatory challenges in the institutional environments........................... 39 4.2.3 The social environment....................................................................................................41 4.2.4 Managing the social challenges in the institutional environments.................................. 43 4.3 Market entry strategy.................................................................................................................45 4.3.1 Non-traditional market entry............................................................................................47 4.3.2 Traditional market entry...................................................................................................49 4.3.3 Key factors for market selection...................................................................................... 51 4.4 Possible Regulatory Harmonization.......................................................................................... 53 5. Discussion and analysis....................................................................................................................56 5.1 Institutional environment...........................................................................................................56 5.1.1 Managing the challenges of the institutional environment.............................................. 59 5.2 Market entry strategies.............................................................................................................. 62 5.2.1 Traditional entry modes: a comparison of non-equity and equity entries........................62 5.2.2 Non-traditional market entry: e-commerce serving as a loophole...................................65 5.2.3 Key factors in market selection to overcome barriers......................................................67 5.3 Outlook of the industry in the EU common market.................................................................. 68 5.4 Revised conceptual model......................................................................................................... 70 6. Conclusions....................................................................................................................................... 72 6.1 Conclusions............................................................................................................................... 72 6.2 Theoretical and practical implications.......................................................................................75 6.3 Future research.......................................................................................................................... 76 References............................................................................................................................................. 78 Appendix............................................................................................................................................... 91 Appendix A- Interview Guide......................................................................................................... 91 List of firms...........................................................................................................................................92 List of Figures Figure 1 Structure of the thesis 8 Figure 2 The Hierarchical Model of Market Entry Modes 16 Figure 3 Configuration of conceptual model 22 Figure 4 Revised Conceptual Framework 73 List of Tables Table 1 Keywords for the systematic review 25 Table 2 Overview of the respondents and details of the interviews 28 Table 3 Summary of what institutional challenges firms meet and how they navigate them 45 Table 4 Summary of market entry strategy 53 Table 5 Summary of future outlook on possible harmonization 55 List of Abbreviations EU - European Union EJV - Equity Joint Venture PMI - Philip Morris International TCA - Transaction Cost Analysis TPD - Tobacco Products Directive WHO - World Health Organization 1. Introduction This introductory chapter presents the background of nicotine pouch firms current business environment and position within the tobacco industry. Subsequently, the problem discussion highlights the challenges associated with entry decisions in an unharmonized regulatory landscape for a potentially harmful product. Lastly, the purpose and research question that this study aims to address are presented within the outlined delimitation. 1.1 Background The tobacco industry is one of the most profitable and influential transnational industries, operating on a global scale despite the harmful aspects associated with its products (Clancy, 2013: 745). The global tobacco industry generates nearly six million metric tons of tobacco annually (Statista, 2025a), which implies a substantial scale when compared to global coffee production at around 10.5 million metric tons (Real Logistics, 2025). The tobacco industry remains a significant economic player, generating high revenues each year (Statista, 2025a: Statista, 2025b). Traditional cigarettes accounted for approximately 75% of the total tobacco product sales volume in the EU in 2020, making them the main form of tobacco consumption (European Union, 2023: 9). Globally, there were 1.25 billion adult tobacco users in 2022, according to the latest estimates from the World Health Organization (WHO) (World Health Organization, 2024a). However, trends from 2022 indicate a continued decline in tobacco usage worldwide. The total number of tobacco users has steadily decreased from 2000 to 2022 and the trend is expected to continue (World Health Organization, 2024b: 16-17). Governments worldwide have implemented various strategies to shift smoking attitudes and enhance health awareness as a part of their efforts to improve public health (U.S. National Cancer Institute, 2017: 452-453). These strategies include regulatory policies, tax-induced price increases, health education campaigns and support for smoking cessation (U.S. 1 National Cancer Institute, 2017: 452-484; World Health Organization, 2023; National Institute on Drug Abuse, 2020). Furthermore, organisations like WHO have set out a Global Action Plan 2013-2020 for reducing diseases caused by, among others, tobacco use, which has been extended to 2030 and includes a target to reduce the number of tobacco users (World Health Organization, 2024a). According to WHO’s global report on trends in the prevalence of tobacco use 2000-2030, tobacco use has declined in 150 countries, emphasizing the effective adoption of tobacco control measures in this progress (World Health Organization, 2024b). Additional studies confirm that tobacco control measures effectively reduce smoking rates, with stronger implementations leading to greater declines in tobacco use (Gravely et al., 2017: 171-172; Ngo et al., 2017: 8; Dubray et al., 2015: 2). Subsequently, due to the prevalent decline in tobacco usage, tobacco companies have invested in a variety of new products to ensure the industry's long-term growth. Since the early 2000s, these firms have introduced and promoted alternatives, including snus and nicotine pouches (Tobacco Tactics, 2024; Travis et al., 2025: 598, 605). Originating in Sweden in the 17th century, snus, a smokeless, powdered form of tobacco that is placed under the upper lip gained recognition (Philip Morris International, n.d-a; Swedish Match, n.d.-a). In later years, tobacco-free nicotine pouches emerged, providing a more convenient way to experience nicotine. While snus contains tobacco and offers a traditional tobacco flavour, nicotine pouches are tobacco free and offer a variety of flavours beyond tobacco (Furness, 2025). Giant tobacco companies such as British American Tobacco, Japan Tobacco International and Philip Morris International (PMI) have increased the availability of nicotine pouches in new markets and invested more resources in promoting and expanding their production (Tobacco Tactics, 2024). Nicotine pouches are sometimes referred to as modern oral products, white snus or similar terms (British American Tobacco, n.d.; World Health Organization, 2024c). In this study, the term nicotine pouches will be used for consistency. The nicotine pouch sales from 2016 increased more than 300-fold from 63,178 units ($709,635) to 45,965,455 units ($216,886,819) in 2020 (Phan et al, 2024: 2). The rising popularity of nicotine pouches is driven by several factors such as; shifting smoking attitudes, increasing product awareness and strategic marketing efforts (Liu & Halpern-Felsher, 2024: 1; O’Hagan, 2024: 589-592). This rapid growth in the nicotine pouch market 2 reflects the ongoing shift in consumer preferences toward smokeless alternatives (Di Lorenzo, 2025a), alongside the increasing investment from major tobacco companies aiming to capitalize on this emerging trend (Travis et al., 2025: 598, 605; Tobacco Tactics, 2024). Originating in Europe, nicotine pouches have gained popularity across the region, with countries like Sweden achieving the lowest smoking prevalence globally, largely due to a significant shift from smoking to snus (Chapman, 2007: 145). The EU directive on the Tobacco Products Directive (TPD) regulates tobacco products to protect public health in the EU, banning oral tobacco except in Sweden (Directive 2014/40/EU: 2, 6). The European Parliament reports that the TPD is in need to address issues and regulatory challenges of nicotine pouches, due to its growing popularity (European Parliament, 2023a). The definition of novel tobacco product in the TPD disregards products not containing tobacco, such as nicotine pouches (Directive 2014/40/EU: 11). This results in varying regulatory approaches among member states, creating inconsistencies in the regulatory landscape for firms seeking to establish themselves in the EU market (European Parliament, 2023b). As a supranational body, the EU has substantial authority over trade and investment within its borders (Buckley et al., 2018: 140). Its objective is to protect businesses within the market through regulatory frameworks and trade defense mechanisms designed to prevent unfair competition (Buckley et al, 2018: 138). Thus, in the absence of regulatory implementation by a supranational institution, member states face uncertainty about which standards to adopt, resulting in an unharmonized regulatory environment that disrupts business operations. 1.2 Problem discussion Initially, the nicotine pouches were marketed as a substitute and a safer alternative to traditional tobacco products, yet they managed to disrupt the tobacco industry by reshaping the market and consumer behavior (Lund, 2024). Its growing popularity has targeted new market segments including younger demographics and non-smokers, which has raised concerns about potential health risks and regulatory challenges (O’Hagan, 2024: 589-592; Reimann et al., 2024: 5-6). Although the growing 3 demand presents significant market opportunities for firms, it also introduces challenges in effectively reaching these markets (Tobacco Tactics, 2024). When firms expand into new markets, they encounter various market conditions that may present both risks and opportunities (Zaheer, 1995: 341). Particularly, the institutional environment influences nicotine pouch firms by shaping the regulatory landscape they must navigate. Differences in laws, regulations and enforcement practices across markets significantly affect how these firms operate (Duren et al., 2024: 38-39). For instance, in some regions, nicotine pouches have enabled firms to exploit regulatory loopholes, bypassing laws that restrict the marketing of tobacco products (World Health Organization, 2024c). The firms were able to circumvent tobacco regulations by marketing nicotine pouches as “tobacco-free”. This classification enabled them to legally sell the products to minors and advertise them, despite existing restrictions on tobacco promotion. However, the term "tobacco-free" has been criticized by an inventor of nicotine pouches as misleading in marketing, by failing to acknowledge the harmful effects of nicotine (Lund, 2024). Additionally, the marketing of nicotine pouches is criticized for blurring the lines between these products and nicotine replacement therapies, complicating regulatory efforts and public understanding of their risks (Kostygina et al., 2016: 1221). For instance, major tobacco companies have introduced marketing efforts towards a smokeless future, providing consumers with nicotine pouches as a reduced-risk product tailored to their needs (British American Tobacco, n.d.; Japan Tobacco International, n.d.; Philip Morris International, n.d.-b;). Yet, scientific evidence on nicotine pouches remains limited and under-researched. While they may present fewer risks than smoking, the long-term health effects are emphasized to remain uncertain (Azzopardi et al., 2021: 2252; Folkhälsomyndigheten, 2023: 32). Nonetheless, current knowledge on nicotine products indicates that nicotine pouches are addictive and may pose toxic and harmful health effects (Folkhälsomyndigheten, 2024: 9; U.S. Food & Drug Administration, 2025). This suggests that nicotine pouch companies, due to their vulnerability to regulations, face significant challenges when entering new markets, as their products can raise concerns about potential health risks (Reimann et al., 2024: 5-6; O’Hagan, 2024: 589-592; Global Institute for Novel Nicotine, 2025). 4 Furthermore, in the EU market, regulations on nicotine pouches vary significantly. This results in institutional differences across markets creating disparities between regions, complicating the business landscape and increasing uncertainties for companies operating in the EU common market (Duren et al., 2024: 38-39). As a result, the sale of nicotine pouches vary in the EU landscape, some member states adopt a restrictive attitude enforcing total bans on nicotine pouches, similar to those implemented on snus containing tobacco (Snusforumet, 2024; Di Lorenzo, 2025b; Di Lorenzo, 2025c; Gesley, 2023). Some countries are seen to permit its sale, while in others, there is an absence of any regulation regarding this product (Folkhälsomyndigheten, 2024.; Helsedirektoratet, 2018; Global Tobacco Control, 2022). Some member states proposing or already implementing bans on nicotine pouches are primarily concerned about their addictive nature, affordability, flavoring and marketing strategies that makes them particularly appealing to the younger demographics (Giordano, 2024). Ultimately, this creates an unharmonized regulatory landscape, resulting in uncertainty for firms entering the EU market with nicotine pouches. It remains unclear how these firms are currently navigating these institutional challenges and how it affects their choice of market entry. Researchers suggest that the firms’ choice of entry mode can be affected by the characteristics of the external environment which they chose to operate in. Thus, managers must carefully evaluate strategic decisions of market entry mode with consideration to factors such as the external environment. (Buckley et al., 2018: 279). In this case, the lack of harmonization complicates firms ability to operate across markets, especially given the added barrier of health concerns surrounding nicotine use. These factors require firms to thoroughly assess the legal and social environments they enter. The perception of nicotine pouches as harmful by decision-makers further complicates the regulatory environment. Therefore, addressing the barriers faced by nicotine pouch firms is crucial for gaining insights into the strategies companies employ to successfully expand into global markets with a lack of harmonized regulation. Understanding how these firms navigate the challenges posed by the potentially harmful nature of their product will shed light on their approaches to market selection, entry mode, regulatory compliance and alignment with local health concerns. By effectively managing these complexities, firms can better position themselves for success in diverse and highly regulated international markets. 5 1.3 Purpose and Research question This research aims to contribute to the academic literature on market entry strategies by examining the successful entry of perceived harmful products within unharmonized regulatory environments. Subsequently, the study seeks to analyze how global firms internationalize controversial products under uncertain conditions and to identify the barriers they encounter during the process of market expansion. This will be conducted by examining the experiences of previous market entries and the strategies adopted by nicotine pouch firms into the common EU market. The study will aim to address the following research question: How do nicotine pouch firms expand into the EU common market, characterized by an unharmonized regulatory landscape, and how do they navigate the challenges posed by the perceived harmful nature of the product? Followingly, two sub-questions have been formulated to address the main research question: - What challenges do nicotine pouch firms currently face when expanding into the EU common market? - What are the key factors that help firms overcome these challenges? 1.4 Delimitation This report will be delimited to nicotine pouch firms originating from Sweden with a global market presence, specifically those operating within the EU. This delimitation is necessary as the research aims to investigate cases involving companies with experience of entering the EU common market. Additionally, since the product originates from Sweden, the choice to focus on Swedish firms is supported by the expectation that these firms possess greater experience with the product itself and operate within a well-established regulatory framework in Sweden, in contrast to the more fragmented regulatory landscape across the EU. Thus, they are likely to contribute with valuable insights into how they manage a more complex environment. 6 The snus industry differentiates between products containing tobacco and those that do not. The definition of nicotine pouches in this paper refers to the tobacco-free alternative to traditional snus. Furthermore, the study refrains from generating new evidence on the harmful effects of the product, focusing solely on the existing perception of its harmfulness and the strategies used to navigate this in the context of market expansion. 1.5 Structure of the thesis The structure of the thesis, illustrated in Figure 1, will begin with a review of the relevant literature, providing the foundation for the study. This is followed by the methodology, which outlines the research design and data collection process. Subsequently, the empirical findings from the interviews will be shared. The findings will further be examined in the discussion and analysis. Lastly, the study will conclude by presenting its key findings, contributions and recommendations for future research. Figure 1 Structure of the thesis (Figure compiled by the authors) 7 2. Literature review This chapter presents the theoretical foundation by reviewing relevant literature from various academic fields. It begins with an overview of institutional theory, highlighting its core components. The review further explores how institutions shape the business environment, emphasizing their influence on firm behavior and market dynamics. Followingly, the chapter explores different market entry modes to provide a deeper understanding of the strategic options that firms can undertake when expanding into foreign markets. 2.1 Institutional Theory The global organizational landscape is undergoing significant transformation as economic interdependence continues to deepen. Firms are capitalizing on this interconnectivity to expand their market presence, leading to increased globalization (United Nations Development Programme, 2024: 47; Pooch, 2016: 18-19). As a result, organizational structures across nations are becoming more similar. However, despite this convergence, persistent cultural traits continue to drive variations between markets, in terms of business practices and institutional conditions (Rosenzweig & Singh, 1991: 344-345). Institutional theory provides a widely applied framework for understanding how firms operate within different market environments and how institutional structures shape organizational strategies and business practices (Kostova & Roth, 2002: 215). According to North, institutions are shaped by both formal rules and informal constraints which can affect business practices (North, 1990: 97). Formal institutions encompass laws, regulations and established procedures, while informal institutions include customs, norms and cultural practices (Sahin & Mert, 2022: 2). Consequently, firms’ internationalization strategies are not solely determined by their internal capabilities and industry conditions, but also by the institutional environment which they operate in (Sahin & Mert, 2022: 2). Three pillars of institutional theory, the regulative, normative and cultural 8 cognitive, represent different mechanisms through which institutions create stability and legitimacy (Buckley et al., 2018: 141). The regulative element of institutional theory is mainly embedded in formal institutions, which use their authority to shape the behavior of economic actors to achieve specific objectives. These objectives are influenced by various factors, including political and social dynamics, organizational practices and broader institutional transformations. Such regulations are enforced through laws and policies that provide clear expectations for firms (Buckley et al., 2018: 137-139, 141-142; Kostova & Roth, 2002: 215). Similarly, normative elements are also a part of formal institutions but are strongly influenced by informal values, traditions and expectations. The normative elements are behavioural expectations by stakeholders, which can be supported by laws and regulations but also enforced through an implicit or explicit understanding of what is appropriate organizational behaviour. Societal norms and laws that develop from normative elements will usually differ across countries (Buckley et al., 2018: 142-143). The cultural-cognitive element is the most informal element and includes the shared beliefs, values and assumptions that influence how individuals and organizations understand, interpret and adopt a phenomena (Buckley et al., 2018: 143; Kostova & Roth, 2002: 216). Additionally, a key aspect which is highlighted in the institutional theory is the concept of isomorphism, a type of institutional pressure that causes organizations operating within the same institutional environment to gradually adopt similar practices, leading to structural and procedural homogeneity (Davis et al., 2000: 241-242; Kostova & Roth, 2002: 215). This concept outlines three types of isomorphism; coercive, mimetic and normative (DiMaggio & Powell, 1983: 150; Kostova & Roth, 2002: 216-217). These different types of isomorphisms can force firms to act in a specific manner as a consequence of their environment (Davis et al., 2000: 241-242). Firstly, coercive isomorphism occurs when powerful authorities impose organizational practices on firms (Kostova & Roth, 2002:216-217). It is seen as the strongest environmental pressure, as firms have to adhere to legal regulations (Rosenzweig & Singh, 1991: 348). Secondly, during mimetic isomorphism, organizations respond to uncertainties by imitating and adopting patterns of other successful actors to 9 navigate challenges. Lastly, organizations under normative isomorphism adopt practices considered appropriate within their professional or institutional environment (Kostova & Roth 2002: 216- 217). Institutional theory outlines four main approaches dominant in international business research; new institutional economics, neo-institutionalism and comparative capitalism (Hotho & Pedersen, 2012: 135-137). The new institutional economics approach, rooted in economics, examines how country-level institutions such as government policies and corporate governance reduce uncertainties in economic transactions. In contrast, neo-institutionalism stemming from sociology, focuses on how organizations seek legitimacy by conforming to institutional norms through isomorphism, extending beyond efficiency. Comparative capitalism, from political science, explores how national systems such as educational, financial and legal systems shape economic structures and business strategies (Sahin & Mert, 2022: 2). Given its focus on transaction costs and market constraints, the new institutional economics approach is considered the most relevant for this study. It provides an economics-focused perspective that is valuable for understanding how firms navigate formal institutional differences and manage the complexities of the transactional environment (Ménard & Shirley, 2025: 2-6). Additionally, when combined with neo-institutionalism, which emphasises the role of norms, culture, and legitimacy in shaping organizational behavior, it offers a more comprehensive perspective of how both formal and informal structure influence organizational behavior and environment to the analysis (Marschlich, 2022: 16-18; Sahin & Mert, 2022: 2). 2.1.1 The new institutional economics The new institutional economics framework highlights the vital role institutions have in the field of International Business. According to this perspective, institutions influence various parts of the business expansion process such as access to markets, costs and uncertainties that foreign firms may face throughout their international expansion. As defined by North, institutions are seen as the rules of the game “forming the framework within which human interactions take place” (1990: 3-4). This distinction implies that while institutions set the rules, organizations, consisting of individuals with 10 various shared and individual goals, are the players operating within these institutional frameworks. The new institutional economics therefore assumes that individuals operate with incomplete information and bounded rationality, meaning that they have limited cognitive capacity to process all available information. As a result, they face uncertainties about future events and outcomes and incur transaction costs to acquire and process relevant information (Ménard & Shirley, 2025: 2). Strong and stable institutions provide the necessary environment to decrease transaction costs, the level of uncertainty and create efficient markets (Hotho & Pedersen, 2012:140; Meyer, 2001: 358). As a result, the quality of an institutional framework does not solely impact the performance of local investments but also the entry mode and market selection, either facilitating or restricting economic interactions (Buckley et al., 2018: 1379; Hotho & Pedersen, 2012: 141). The new institutional framework aims to combine traditional neoclassical economics with a more detailed analysis of how institutions influence the choices available. The concept of transaction costs emerges as a significant theme (North, 1986: 230-231). It refers to the costs associated with making economic exchanges, which include the costs of negotiating and enforcing agreements, as well as the risks and inefficiencies that arise from incomplete or imperfect information during transactions (Williamson, 1981: 552-443). These costs can significantly influence the formation of organizations and the nature of contracts (North, 1986: 231). 2.1.2 Neo-institutionalism As outlined in the new institutional economics, institutional development and change are often shaped by shifts in relative prices, driven by both deliberate actions and spontaneous forces, including external and internal influences (Ferrara, 2022: 110; Micelotta, 2017: 5). These shifts disrupt the equilibrium between private and societal rate of return which may create incentives for institutional reform. However, for these changes to be effective, new formal institutions must align with existing informal norms (Sauerland, 2015: 22-25). Neo-institutionalism is another recognized framework for understanding organizational change and the various pressures imposed by the institutional environment (Hwang, 2023: 2). 11 Institutional changes driven by technological, legal and political factors often increase uncertainty, requiring market actors to constantly monitor and adapt to shifts that may affect their operations (Coccia, 2018: 338-340; Moura et al., 2021: 243-246). This uncertainty may be intensified by formal institutions, such as laws and regulations as they tend to evolve slowly and struggle to keep pace with rapid change, making it difficult for firms to anticipate regulatory developments (Moura et al., 2021: 243-246; La Porta, 2008: 307). However, when formal institutions begin to reflect current conditions, they become more responsive to societal and market needs, enhancing their credibility and fostering greater legitimacy, compliance and stability (Moura et al., 2021: 243-246). Additionally, Oliver (1991: 145-146, 173-175) challenges the earlier view of organizations as passive recipients of institutional change and pressure, by emphasizing their ability to strategic response (Suchman, 1995: 577). Typically, firms conform to institutional norms in order to gain legitimacy, social support or in some cases gain access to resources. This is particularly notable when norms are seen as legitimate and broadly accepted in the specific environment. This conformity can be passive and occur through simple adherence, or active through deliberate reinforcement (Oliver, 1991: 150). The response of compliance closely aligns with the concept of isomorphism (DiMaggio & Powell, 1983: 150; Kostova & Roth, 2002: 216). Similarly, organizations may adopt partial compliance or modification strategies, in order to selectively adapt to institutional demands while still protecting their own interests. According to the authors, this can occur in situations when the organization is highly dependent on external actors such as government bodies (Oliver, 1991: 164; Pfeffer & Salancik, 1978: 58-59). However, instances when dependence is low, compliance costs are high or enforcement is weak, avoidance strategies such as symbolic compliance or selective adherence become more viable (Oliver, 1991: 164). As Kostova and Roth (2002: 216) explain through the concept of institutional duality, subsidiaries often adopt symbolic isomorphism to meet host country expectations without fully altering internal operations (Meyer & Rowan, 1977: 355-356; Oliver, 1991: 157; Pfeffer & Salancik, 1978: 97-99). In contrast, firms may choose to challenge institutional demands, when norms conflict 12 with their values or strategies and they can justify departing from institutional demands through appeals to legitimacy or efficiency (Oliver, 1991: 159, 174; Suchman, 1995: 574). Lasty, another approach firms may choose to adopt is to pursue manipulation, strategically reshaping institutional norms through regulatory influence and advocacy, without explicitly restricting or opposing the institutional demands (Greenwood et al., 2008: 496; Lawrence & Suddaby, 2006: 21-22). Thus, as institutions evolve through societal interactions, theoretical frameworks must adapt accordingly to account for these transformations (Lewis & Steinmo, 2012: 338; North, 1986: 231). North further suggests that future research should examine how political pressures influence the emergence of policies and how institutional arrangements can either enable or hinder change (North, 1986: 235-236). This perspective can be argued to be particularly relevant when studying the internationalization of harmful products, as political and institutional factors may significantly influence the market expansion (Kostova & Roth, 2002: 2015). Further, analyzing these factors through institutional frameworks provides deeper insights into the strategic decisions firms make when expanding controversial products, including how they manage barriers and transaction costs to navigate regulatory challenges and compliance requirements. 2.2 Market entry strategy 2.2.1 Market entry literature Entry modes are defined as specific strategies and methods through which firms enter foreign markets (Schellenberg et al., 2018: 2). Foreign markets often present cultural, political and economic differences, along with geographical challenges. These differences are commonly referred to as the liability of foreignness, which leads to higher operational costs. Consequently, firms must proceed cautiously in their market entry strategy, considering the risks and opportunities of international expansion (Zaheer, 1995: 341). Research on international market entry has been extensive, emphasizing the crucial role that entry mode decisions play in the long-term success and competitiveness of firms (Brouthers, 2013: 14; Buckley et al., 2018: 543 Erramilli & Rao, 1993: 19) 13 Such decisions are complex, involving key considerations such as location, entry mode and timing, all of which have significant strategic implications. Selecting the right strategy is essential for maximizing opportunities and ensuring sustainable global growth (Buckley et al., 2018: 278). Several theoretical frameworks have influenced firms' market entry decisions, including the Transaction Cost Analysis, the Institutional Theory, the Eclectic Paradigm, the Uppsala Internationalization Model and the Resource-Based View (Schellenberg et al., 2018: 1). The Transaction Cost Analysis (TCA) is the most widely applied framework in international entry mode research (Brouthers & Hennart, 2007: 400). The theory centers on economizing (Sarstedt & Mooi, 2014: 1; Williamson, 1981: 550). It suggests that firms strive to reduce costs at every stage of the value chain in production (Tse et al., 1997: 780). The TCA approach emphasizes the make-or-buy decision, determining whether firms should manufacture components in-house or source them externally (Sarstedt & Mooi, 2014: 1), where the decision is primarily driven by a comparison of their respective transaction costs (Williamson, 1988: 34). The transaction cost framework suggests that without the advantages of internalization, much of foreign direct investment would be replaced by contractual exchanges of resources between independent firms (Dunning, 1980: 12). Turning to another theoretical perspective, the Uppsala model explains internationalization as a gradual, step-by-step process where firms first expand to markets with low psychic distance and increase commitment as they gain experiential knowledge. It emphasizes that firms reduce uncertainty through learning and market experience, progressing from sporadic exporting to foreign direct investment (Johanson & Vahlne, 1977: 24-26). Moreover, Dunning’s eclectic paradigm explains foreign direct investment (FDI) decisions based on three key advantages: ownership-specific, location-specific and internalization advantages. It suggests that firms engage in FDI when they possess unique competitive assets, benefit from a specific foreign location and gain from internalizing operations rather than outsourcing (Dunning, 1988: 10; Mudambi, 2004: 456-458). Finally, the Resource-Based View (RBV) adopts a firm-centric perspective, focusing on internal resources rather than taking a market-based view (Barney, 1991: 101; Sharma & Erramilli, 2004: 1). It posits that a firm's sustained competitive advantage arises from its unique, firm-specific resources that are valuable, rare, imperfectly imitable 14 and non-substitutable (Barney, 1991: 105-106). These resources are developed over time and become not easily tradable, driving long-term success when effectively deployed in areas like production and marketing (Sharma & Erramilli, 2004: 6-7). In a host country, a firm's success depends on how efficiently it transfers these key resources and their compatibility with local factors (Sharma & Erramilli, 2004:10). 2.2.2 Market entry modes Market entry strategies can be understood from a hierarchical model that categorizes the mode based on their level of involvement, control and risk. At the first level of the hierarchy, entry strategies are divided into two main categories: equity and non-equity modes, with equity modes involving greater investment and ownership compared to non-equity modes. At the second level, equity-based modes are further divided into joint ventures and wholly-owned operations, while non-equity-based modes are split into exports and contractual agreements (Pan & Tse, 2000: 537-538; Schellenberg et al., 2018: 1-8). Figure 2 provides a detailed illustration of the hierarchical model. 15 Figure 2 The Hierarchical Model of Market Entry Modes (Pan & Tse, 2000: 538) 2.2.2.1 Traditional entry modes Non-equity entry mode Non-equity entry modes, defined as entry strategies that do not require equity investment by a foreign entrant, rely on contractual agreements such as leasing, licensing, franchising and management-service contracts (Erramilli et al., 2002: 223). It can also include establishing contracts with distributors and resource suppliers (Brouthers & Hennart, 2007: 395). Non-equity modes generally involve a low level of commitment to a market (Hill, 2011: 474). Exporting is one of the most commonly used non-equity entry modes, especially among manufacturing companies and firms with limited international experience. A key advantage of exporting is its flexibility, allowing firms to enter new markets with minimal risk and enables global expansion without significant investments in its implementation. It is a relatively simple and cost-effective approach, making exporting a low-cost and low-resource commitment entry mode compared to other strategies (Welch et al., 2007: 239-241). Since exporting requires a low level of resource commitment, it is often the preferred strategy in the 16 early stages of internationalization (Ahsan & Musteen, 2011: 377). Exporting can be done through direct or indirect methods. In direct exporting, the firm oversees the entire process from production to the final customer, ensuring greater control over operations, customer relationships and negotiations (Buckley et al., 2018: 287; Welch et al., 2007: 267). In contrast, indirect exporting is conducted through an intermediary, meaning the exporting firm has minimal direct engagement with customers or businesses in the international market (Yasar, 2013: 110). Followingly, there are different types of intermediaries, for instance export merchants and export agents. Export merchants assume ownership and risk, while export agents work on a commission basis and do not take ownership or risk. Indirect exporting offers advantages such as rapid market entry, lower risk and resource savings. However, as it comes with strategic risks, the producer loses some control over distribution and sales, which can further limit market learning opportunities (Buckley et al., 2018: 287). Through licensing, firms are able to grant licensees the rights to produce and sell its products or use its resources in exchange for royalty fees. Such resources that are shared can include technology, brand names, patents, trademarks and specialized management knowledge. It offers a low-cost market entry and a way to leverage existing technology or brand. However, it carries risks such as loss of control over quality, intellectual property and the potential creation of competitors (Buckley, et al., 2018: 289; Hill, 2011: 475). Additionally, franchising, as another contractual agreement, involves the foreign entrant, acting as the franchiser, receiving royalties and supply-chain markups from the host-country collaborator, the franchisee. In this mode, the franchiser leases its brand name and provides the franchisee with support through guidance and training (Erramilli et al., 2002: 224). A strategic alliance is a partnership between independent firms that involves exchanging, sharing or co-developing resources and capabilities for mutual benefits (Kale & Singh, 2009: 46). Entering a new market through an alliance allows firms to reduce investment risks and enhance their competitive advantage. Given fast market changes and global competition, firms are motivated to form alliances. Such collaborations help mitigate investment risks, facilitate resource pooling, improve operational efficiency and strengthen global competitiveness, allowing firms to respond more effectively to market changes (Tse et al., 1997: 780-782). 17 Equity entry mode Equity-based modes, which involve equity investment, are divided into equity joint ventures (EJVs) and wholly-owned operations, and demand significant resource commitment in the foreign market (Pan & Tse, 2000: 537-538). Joint ventures and wholly-owned companies offer greater ownership, vertical integration and resource commitment, which also involves a higher risk from a business perspective (Erramilli & Rao, 1993: 20). An EJV is a partnership in which two or more parties invest assets to create a new entity, sharing ownership and earning profits based on their equity contributions. It can also arise when a firm obtains partial ownership of another company (Hennart, 1988: 362). The equity can be distributed as majority or minority ownership, typically based on the contributions of the assets. However, the shareholdings are often split evenly, such as 50/50, or with a slight majority, like 51/49 (Young et al., 1989: 17). Followingly, an EJV allows the firm to share the costs and risks of entering a new market while leveraging the local partner's knowledge of the institutional framework, consumer preferences and business practices in the area. On the other hand, such partnerships can also carry distinct risks due to the challenges of collaborating with a partner from a different culture. Cultural differences can lead to misunderstandings, conflicts and potentially the dissolution of the entity (Barkema & Vermeulen, 1997: 845; Buckley et al., 2018: 291). Hence, long-term success of EJV’s is heavily dependent on selecting the right partner and incorporating effective cross-cultural management. Yet, as EJV’s are often formed for specific goals, such as entering a new market, and may eventually dissolve anyway (Buckley et al., 2018: 291). When it comes to wholly owned subsidiaries, the foreign investor maintains 100 percent ownership of the entity which results in full control, although it requires significant resources and carries high risk. A wholly owned subsidiary can be established in two primary ways: through a greenfield investment, where a new facility is built, or through the acquisition of an existing local firm (Buckley et al., 2018: 291-292). Traditionally, the decision between a joint venture and a wholly owned subsidiary has been viewed as a question of equity control. However, from an institutional perspective, the entry mode decision can be viewed as an 18 organizational strategy aimed at helping a firm gain legitimacy in relevant environments, particularly those characterised by uncertainty (Yiu & Makino, 2002: 667-668). 2.2.2.2 Non-traditional entry modes Recent international business research has highlighted a growing topic of non-traditional entry modes, where companies are increasingly relying on non-traditional, non-equity entry modes, particularly those facilitated by digitalization (Brouthers et al., 2022: 2091). The shift is largely driven by technological innovation and the rise of digitalization, which have significantly increased global integration and revolutionised companies' cross-border activities (Brouthers, 2022: 2091; Monaghan et al., 2019: 12). Technology and digitalization enable firms to operate across borders without physical presence by overcoming constraints of distance and allowing them to access resources and deliver value remotely through virtual channels (Brouthers et al., 2022: 2091; Nachum & Zaheer, 2005: 2). For instance, there are born digital firms characterized by being built on digital infrastructure from inception and include internet platform businesses, digital solutions firms, e-commerce or retail firms and producers of digital content (Monaghan, 2019: 12). Having a digital business model offers flexibility and scalability as it does not require international experience and instead enables businesses to widen international scope. Such firms can internationalize rapidly, sometimes unintentionally or accidentally, as their business models lack borders (Hennart, 2014: 117; Monaghan, 2019: 13). Through technology, born digital firms can have direct engagement with stakeholders, automation and network effects (Monaghan, 2019: 13-14). Further, it becomes possible for e-commerce retailers to operate from one country while delivering products to customers across international markets (Brouthers et al., 2022: 2100). However, institutional challenges can be encountered when entering foreign markets through non-traditional entry modes, particularly digital platforms, which operate through websites and do not have a physical or legal presence in the new country. Since, born global companies do not always adhere to the same legal rules as traditional local businesses, it could create legitimacy issues, meaning governments, users, or competitors may not trust or accept them (Brothers et al., 2022: 2098). Similarly, Bei and Gielens (2020: 3) highlight the 19 role of online platforms in bridging gaps for manufacturers, especially in countries where distribution networks are weak. These marketplaces allow firms to reach consumers directly without the need for local investments or retail infrastructure. Additionally, the authors argue that online marketplaces can compensate for insufficient traditional market knowledge (Bei & Gielens, 2020: 14). 2.3 Conceptual model When assessing the business landscape for nicotine pouch firms, it becomes clear that the institutional environment plays a crucial role. Institutional theory advocates that institutions are a part of shaping firms strategies, thus institutional pressures force firms to act in a certain manner, influencing their choice of entry mode (Kostova & Roth, 2002: 215). As illustrated by Figure 3, the institutional environment has a direct impact on nicotine pouch firms' choice of entry mode when entering a new market. Subsequently, Figure 3 shows that the institutional environment shapes potential barriers that firms need to address as part of their expansion strategy. Due to the perceived harmful nature of nicotine pouches, it influences the product's acceptance both from a regulatory perspective, by policymakers, and from consumers viewpoint (Folkhälsomyndigheten, 2024: 9; Lund, 2024; U.S. Food and Drug, 2025). This suggests that compliance with regulation is essential, making the institutional landscape unavoidable (Global Institute for Novel Nicotine, 2025; O’Hagen, 2024: 589-592; Reimann et al., 2024: 5-6). However, the lack of harmonized regulation in the EU complicates the process for firms to ensure compliance across different member states (Duren et al., 2024: 38-39). As depicted in Figure 3, these institutional barriers ultimately shape the choice of entry mode for nicotine pouch firms, adding complexity to their internationalization strategies within the EU market. The conceptual model is deeply embedded in institutional theory, as it highlights the role of institutional environments in shaping market entry decisions. As firms seek to expand internationally, the institutional barriers they encounter, both formal and informal, force them to carefully consider the entry modes they adopt since it ultimately impacts their international strategy. By understanding these 20 barriers, firms can better navigate the complexities of foreign markets, reduce transaction costs and formulate strategies that enhance their chances of success in the global market. This comprehensive understanding bridges the gap between theory and practice, illustrating the institutional pressures that influence market expansion, especially when entering regulatory-intensive markets. Thus, the conceptual model will guide the research in exploring the challenges associated with internationalizing a harmfully perceived product in an unharmonized regulatory environment and understanding how these challenges influence the entry mode choice as part of their expansion strategy. Figure 3 Configuration of conceptual model (Figure compiled by the authors) 21 3. Methodology This chapter outlines the methodology used for data collection in this study. It begins by briefly reviewing key research approaches to provide context for the chosen method. The selected approach is then justified based on the research objectives and the type of data needed. Details of the data collection process are also provided, including the tools used, sampling techniques and ethical considerations. 3.1 Research approach Developing a clear research strategy is crucial, as it lays the foundation for the entire study and is necessary for effectively addressing the main research question (Bell et al., 2019: 35-36). While qualitative research allows for flexibility and adaptation throughout the process, outlining key elements of the strategy remains essential (Eriksson & Kovalainen, 2016: 28). There are three main approaches to business research: inductive, deductive and abductive (Bell et al., 2019: 20, 24). This study draws on principles of abductive reasoning, combining interactive movements of both induction and deduction during the research process (Dubois & Gadde, 2002: 559; Eriksson & Kovalainen, 2016: 24). Abductive reasoning proves particularly useful when existing theories are insufficient to explain empirical findings. Rooted in hermeneutic principles, which emphasize interpretation, it allows the researcher to identify the most plausible explanations, construct theoretical insights and examine the underlying conditions of the phenomenon under study. The abductive strategy aligns with the logic of systematic combining, where the analytical framework is continuously adjusted in response to empirical observations and theoretical insights. In the context of this study, the adaptive and iterative nature of abduction offers a significant advantage (Dubois & Gadde, 2002: 559). This thesis adopts an abductive approach, adjusting the theoretical framework in response to empirical findings from interviews. Rather than following a single model of scientific inquiry, the research process integrates multiple forms of reasoning (Yin, 1981: 24). Furthermore, the 22 conceptual model (Figure 3) illustrates an abductive approach, as the model was revised based on empirical findings through an iterative process of moving back and forth between theory and data. Moreover, this research adopts an interpretivist paradigm, acknowledging that reality is socially constructed and best understood through individuals’ subjective experiences. Aligned with abductive reasoning and a hermeneutic foundation, the study prioritizes understanding over prediction. The case study approach is appropriate for exploring complex, context-dependent phenomena (Yin, 1981: 59). As outlined by Creswell & Creswell (2018: 76), the study reflects principles of both interpretivism and constructivism. These philosophical approaches emphasise subjectivity and shared meanings as well as reflexivity and the interpretive nature of qualitative analysis (Eriksson & Kovalainen, 2016: 20-21). 3.1.1 Research design To answer the study’s research question, a qualitative case study approach is considered the most appropriate. The qualitative method centers on understanding experiences and meanings through words rather than statistical numbers. Using a quantitative method, the research question would be examined through the collection and analysis of numerical data to identify patterns and test hypotheses (Bell et al., 2019: 562-563). A qualitative research offers a flexible structure in cases where the studied phenomena is a complexity of a situation. It involves the researchers to collect the data from the participants' settings and to make interpretations of the meaning of that collected data (Creswell & Creswell, 2018: 4). Considering the complex nature of the research question, a case study is able to make room for such research (Eriksson & Kovalainen, 2016: 131). A case study is an in-depth analysis of a case bounded by time and place, where collected detailed data is derived from multiple sources (Creswell & Creswell, 2018: 14; Yin, 2018: 15). According to Yin (2018: 14), case studies are particularly suitable for exploring the how and why of decision-making and its outcomes. Given that this study seeks to examine a how-question, it motivates the selection of a case study in the research design (Yin, 2018: 14). Case studies are useful when 23 wanting to understand a real-world case and assume that such understanding is likely to involve important contextual conditions relevant to your case (Yin, 2018: 15). Bell et al. (2019: 63) highlights that the case study design involves the analysis of a single case, which could be for instance a single organization, location, person or event. However, as an extension to the case study design, the multiple case study involves the investigation of several individual cases. It emphasizes the focus on each case and their unique context, with the purpose of comparing the cases to draw conclusions from them all (Bell et al., 2019: 67; Yin, 2018: 54). Conducting this study within the field of International Business, case studies are particularly suitable due to their effectiveness in exploring cross-border dynamics involving diverse cultural environments. The complexity and contextual variability embedded in such settings often make it difficult to produce comparable or generalizable findings, therefore this study adopts a qualitative approach through interviews to capture in-depth insights from the selected cases (Ghauri, 2004: 111). 3.1.2 Structure of the literature review A literature review was conducted as a foundation for understanding and analyzing the empirical findings. This was done through a systematic review of existing literature and document analysis to enhance reliability by providing a strong evidence based understanding regarding what is known about the subject (Bell et al., 2019: 96). A structured, unbiased search process was carried out using predefined keywords illustrated in Table 1, resulting in a selection of sources that met established quality criteria and were relevant to the study (Bell et al., 2019: 95). The sources included academic journals, literature reviews and books. These materials were accessed via Google Scholar and the Supersearch tool provided by the University of Gothenburg, School of Business, Economics and Law’s library. 24 Table 1 Keywords for the systematic review 3.2 Data collection method The data collection process is a crucial component of any research study. Heaton (2008: 34-35) distinguishes between two main types of data, primary and secondary. Primary data refers to information collected firsthand by the researcher for a specific research objective, meaning it has not been previously published or gathered (Cerar et al., 2021: 1366). In contrast, secondary data consists of information originally collected for other purposes, but can still be valuable when used independently or to support and enrich primary data (Bell et al., 2019: 296; Heaton, 2008: 34-35). Utilizing secondary data allows researchers to benefit from the quality, cost-efficiency and time savings associated with work already conducted by others (Bell et al., 2019: 296; Renbarger et al., 2019: 464). However, in qualitative research, concerns about the reliability and accuracy of secondary sources may arise, particularly if the data were collected with a different aim or method (Bell et al., 2019: 301-302,308). To enhance the depth and validity of data collection, researchers should also incorporate a variety of additional sources in order to enable data triangulation (Eriksson & Kovalainen, 2016: 138; Saunders et al., 2019: 348). Yin (2003: 85-96 ) identifies six commonly used sources of evidence in case study 25 research: documents, archival records, interviews, direct observations, participant observations and physical artifacts. The author emphasizes that no single source is inherently superior, rather, they are complementary and when used together they can provide triangulation and improve reliability (Yin, 2018: 126). For this study, a combination of both primary and secondary data was employed. In accordance with Yin’s (2018: 130-131) four principles of data collection, all empirical data gathered for the case studies and the research process documentation were electronically recorded and systematically organized in Google Drive folders to ensure transparency and to document the research process. 3.2.1 Primary data Using interviews as a method for collecting primary data helps ensure that the findings reflect the respondents’ experiences and the specific phenomena under study, rather than being shaped by the researcher’s perspective (Cheong et al., 2023: 1-2). To gain deeper insights into the respondents’ viewpoints while maintaining a focused direction, a semi-structured interview was used. This approach offered the flexibility to explore a range of relevant topics and allowed for follow-up questions, thereby supporting a more nuanced understanding of each case. At the same time, incorporating some degree of structure was essential for enabling cross-case compatibility (Bell et al., 2019: 435-436). 3.2.1.1 Sampling and selection of cases Sampling in qualitative research commonly relies on purposive sampling, a technique that involves the selection of units being investigated. In this case, units refers to selected individuals where purposive sampling facilitates the inclusion of appropriate participants which are believed to possess relevant insights aligned with the objective of this study. To ensure relevancy of the participants and meaningful contributions to answering the research question, participants are chosen according to predefined criteria (Bell et al., 2019: 389). Firstly, the main criteria was that the selected firms were required to either have entered the EU market or actively considered doing so. Secondly, each 26 participant was required to hold a managerial role within the organization, specifically handling decisions related to internationalization or the organization's market entry strategy. This criterion was essential to ensure that interviewees possessed the necessary experiences to engage with the interview topics and provide meaningful contributions toward addressing this study’s research question. Therefore, it was important to ensure the role of the interviewee prior to contacting the person which was done by the company’s website or LinkedIn. Thirdly, respondents needed to be available for a full in-depth interview session to ensure the depth and quality of data collected. This criterion was confirmed once contact had been established between the researchers and the interviewee, where detailed information regarding the expected interview duration and content was provided and accepted by the interviewee. In line with Bell et al. (2019: 395-396) suggest, the snowball sampling approach proved highly effective, as it generated several respondents included in the sample presented in Table 2. During the initial contact with each firm, we asked for recommendations of relevant individuals to approach for the interview. Subsequently, the initial interviewees provided additional referrals within the same firm who could contribute with useful knowledge to the research. The overview of the study sample is presented in Table 2, including the cases that showcase a total of seven respondents. The respondents from each case are coded into A1-F2 to protect anonymity, to facilitate the identification of the respondents and enhance the reading throughout the study. The code identifiers will be used to refer to the respondents when the empirical data is presented, as well as throughout the analysis and conclusion of the findings. Case number one is represented by the founder Bengt Wiberg (A1) from the company Stingfree AB, a small company of two people that produces nicotine pouches with gum protection. With the position as Manager of External Affairs for Sweden and Iceland, Mathilda Stenman (B1) represents case number two, Swedish Match, an affiliate to Philip Morris International. Swedish Match is the largest snus manufacturer in Scandinavia and a leader in the tobacco industry (Swedish Match, n.d.). Additionally, case number three, Haypp Group, an e-commerce company represented by Markus Lindblad (C1), with the position of Head of Legal and External Affairs. Case number four is presented 27 by the snus guru and one of the inventors of nicotine pouches, pharmacist Thomas Ericsson (D1), who serves as the founder of the company Kapz. The fifth case is represented by the Export Sales Manager, respondent E1. The firm will remain anonymous throughout the report and referred to as “Company X”. Finally, case number six is represented by the CEO, Admond Shlimon (F1) and the COO, Ramin Warda (F2), of the company VONT. Respondent Role Case Duration of Date interview A1 Founder & Board Stingfree AB 53 min 14 April 2025 Member B1 Manager of External Swedish Match as 52 min 15 April 2025 Affairs in Sweden & an affiliate to Philip Iceland Morris International C1 Head of Legal & Haypp Group 32 min 30 April 2025 External Affairs D1 Inventor of nicotine Kapz 60 min 9 May 2025 pouches & Founder E1 Export Sales Manager Company X 48 min 13 May 2025 F1 CEO VONT 30 min 16 May 2025 F2 COO VONT 30 min 16 May 2025 Table 2 Overview of the respondents and details of the interviews 28 3.2.1.2 Interview Guide Preparations for conducting the research included developing an interview guide that would allow for an open and in-depth discussion. In contrast to unstructured interviews, semi-structured interviews typically include open-ended questions, accompanied by follow-up probes, to assist the interviewer in exploring deeper insights throughout the interview. This approach is distinct from closed-ended questions, which are more commonly used in surveys for quantitative data collection and analysis. Thus, the interview guide was not intended to be followed in a fixed manner, rather, it enabled a natural flow of conversation that remained focused on relevant topics (Adeoye-Olatunde & Olenik, 2021: 1362). Followingly, three topic areas were formulated for the interview guide to allow for flexibility and avoid being too specific (Bell et al, 2019: 440). The topics consisted of broader areas designed to reflect relevant aspects of the research question along with the literature review. To enhance the dependability of the study, a copy of the interview guide was provided to respondents prior to the interview (Bell et al, 2019: 339). 3.2.1.3 Interviews Having identified suitable companies and respondents to interview, initial contact was made via email, telephone or through LinkedIn messages, providing an overview of the study’s purpose and including an interview request. However, in cases where no response was received, additional follow-up contact was made by phone to facilitate communication and to encourage their participation. Once the respondent had confirmed their availability and participation for an interview, the interview guide was sent via email along with a calendar invitation through Microsoft Teams for a virtual meeting at the agreed date and time. Each interview was conducted through Microsoft Teams, which allowed the use of an integrated tool to easily record and transcript the interview, facilitating the coding of the data. Before the start of the interview, the respondent was reminded of the confidentiality of the responses and was given the opportunity to consent to the recording of the session, as well as the option of anonymity (Bell et al., 2019: 441). Recording and transcribing interviews was an efficient method, as it enhanced the accuracy of data collection, enabled thorough analysis, and prevented the limitation of 29 important data to the constraints of our memory (Bell et al., 2019: 445). The interviews were mainly conducted in Swedish, with the exception of one interview conducted in English. Finally, the interview concluded by leaving room for the respondent to provide any additional comments or address any remaining issues. 3.2.2 Secondary data The approach of using secondary data aimed to develop a comprehensive understanding of the business environment in which the production or sale of nicotine pouches takes place. This process provided a foundational base on existing knowledge and insights on the topic (Bell et al., 2019: 95). The sources included information from corporate websites, news articles, statistical websites and official government publications, all of which provided the study with valuable context regarding the nicotine pouch industry and current regulatory developments in the market. 3.3 Data analysis Analyzing the empirical data from case studies is a challenging process (Yin, 2018: 155). A separation between data analysis and data collection is often present in methodological books, which usually illustrate an inaccurate view of how the process is often conducted (Eriksson & Kovalainen, 2016: 140). Our data collection and data analysis became an interlinked process where the analysis at times was conducted throughout the data collection, partially due to time constraints. It was necessary to gather empirical data while simultaneously beginning the analysis of the already collected cases. For instance, after the first three interviews were conducted, a preliminary structure for the analysis was developed based on common subjects identified in the empirical results. Thus, following the transcription of the interview, a thematic approach was utilized to organize and interpret the data (Ryan & Bernard, 2003: 88). The approach consisted of an iterative coding process to initially identify and categorise patterns and themes (Bell et al., 2019: 519-520). The themes developed from the empirical findings for the analysis were; institutional environments, market entry modes and future outlook of regulatory conditions. The interview transcript was reviewed and coded according to its 30 relevant concepts and themes which were then linked through previously mentioned keywords in Table 1 (Bell et al., 2019: 519-520; Merriam, 2009: 178-190). Three themes emerged throughout the process grounded from the theoretical findings and conceptual model ( Figure 3). When establishing relevant themes, criteria mentioned by Ryan and Bernad became a helping guide (Ryan & Bernad, 2003: 88-94). These included criteria such as repetition, domestic typologies, transitions, similarities and differences, missing data and theory-related material. Repetition was identified through the respondents repeatedly mentioning the same subject areas throughout the interview. An example of this was the topic of the harmfulness of smoking which was mentioned by several respondents. Following similar paths, the identification of domestic typologies was revealed by actively listening and paying close attention to terms and metaphors used by the respondents which may sound unfamiliar (Ryan & Bernard, 2003: 89-90). For instance, one participant described the current regulatory environment as "a hole in the head", emphasizing the absurdity of laws that allow harmful products like cigarettes to remain legal while banning safer alternatives like snus and nicotine pouches. Transitions when changing subject can mostly be identified through the use of pauses but also the use of special phrases (Ryan & Bernard, 2003: 90-91). One respondent particularly used the phrase “yes, so“ while another frequently used “so, umm” when changing topics. Further, similarities and differences were identified through various participants' comparison of smoking and the use of nicotine pouches. Additionally, missing data was identified in the empirical results, by looking for information which was not mentioned by the respondents but had relevance to the research question (Ryan & Bernard, 2003: 92-92). For instance, one respondent did not specify which countries within the EU common market they are operating in, which may have provided a clearer understanding of the context of their international expansion. Furthermore, theory related material could be identified by looking for ideas or concepts related to existing theoretical frameworks (Ryan & Bernard, 2003: 93-94). In particular, all respondents described their entry strategy of expansion which was relevant to various theories within the field of International Business. 31 3.4 Research quality Trustworthiness of business research is seen as a critical aspect when evaluating a study undertaking a qualitative method. Four criteria of trustworthiness are typically evaluated, being the credibility, transferability, dependability and confirmability of the research (Bell et al., 2019: 48). In the following section, each criteria will be assessed in relation to the study’s findings. 3.4.1 Credibility Fundamentally, the credibility criterion reflects to which extent the findings are believable (Bell et al., 2019: 48). It is crucial to ensure that the research is carried out through good practices which in turn can confirm the findings. A common method aiming to strengthen credibility is applied in this study, known as respondent validation, where the participants are able to confirm that their perspectives have accurately been interpreted through the presented findings (Bell et al., 2019: 363). Before finalizing the analysis and conclusion, each of the respondents received a compilation of the data taken from the interview to review and confirm the accuracy of the results. Accordingly, the data collection was adjusted to correct any errors and clarify ambiguous information. Additionally, triangulation is another recommended method to produce credible findings by the use of multiple sources of data and perspectives (Bell et al., 2019: 364; Guba, 1981: 87). Triangulation is identified throughout the study, for instance, the theoretical framework integrates contributions from different authors and includes studies that use different methods to support their conclusions. The sampling strategy aimed to include at least two interviewees from each company to ensure a broader range of perspectives. However, this was not fully achieved due to limited availability of participants. In most cases, only one respondent per firm was available, with the exception of one company where two representatives were interviewed. This limitation was managed by selecting respondents who hold relevant decision-making roles within their organizations, maximizing depth and relevance of the data collected. 32 3.4.2 Transferability Given the emphasis on the unique context of the social world being studied in qualitative research, transferability becomes a crucial component to ensure that findings can be applied to other contexts or studies (Bell et a., 2019: 365). Ensuring transferability can be achieved by providing a description of the cases under investigation (Merriam, 2009: 226-228). In this study, transferability was enhanced through purposive sampling, which involved managers or employees which are directly involved in the firm's internationalization process (Guba, 1981: 86; Merriam, 2009: 228). Additionally, Guba (1981: 86) suggests that incorporating diverse perspectives and expertise contributes to a deeper, more nuanced understanding, thereby strengthening the overall thick description of the case. This can be seen through including different sizes of firms, respondents with various positions and backgrounds. 3.4.3 Dependability Guba (1981: 89) linked reliability to dependability as a means of demonstrating trustworthiness in qualitative research. Through dependability, researchers can offer readers a systematic and transparent account of the research process, enabling them to understand how the study was conducted and how the analysis was approached (Bell et al., 2019: 365). To enhance dependability in this study, complete records of each step were stored in a dedicated folders on Google Drive. This archive included all phases of the research process, such as the initial research proposal, GANTT-chart, problem formulations, participant selection, interview transcripts and data analysis themes. Additionally, the methodology section was used as a way to further enhance the dependability, outlining the step-by-step process undertaken during the empirical data collection and analysis. Throughout the research process, we also received feedback from our supervisor and representatives of the case companies, serving as an additional control function that further strengthens the study’s dependability (Merriam, 2009: 222). 33 3.4.4 Confirmability Confirmability refers to the degree of objectivity in a study and addresses the risk of subjective bias influencing the research if not properly managed (Bell et al., 2019: 365). It ensures that the interpretations of findings are consistently derived from the data rather than shaped by the researchers’ personal perspectives (Guba, 1981: 87-88). In this study, confirmability was strengthened through several strategies. First, reflexivity was practiced throughout the research process, allowing us to regularly reflect on our own assumptions and minimize our influence on the analysis. Second, an audit trail was maintained, offering a detailed and transparent account of each step in the research process, providing transparent information to facilitate the understanding of how the study was conducted. Finally, member checking was conducted by presenting the findings to participants for validation, helping to ensure that our interpretations accurately reflected their perspectives (Lim, 2025: 223). 3.5 Ethical considerations Upholding ethical principles in business research is essential, both to ensure the proper treatment of participants as well as to recognize and minimize the risk of unethical actions (Bell et al., 2019: 110-112). Confidentiality agreements, including anonymity, are discussed to be important ethical considerations for qualitative studies in relation to avoiding harm to the participants (Bell et al., 2019: 116). As detailed in section 3.2.1.3, interviews were recorded only after obtaining the participant’s consent. Additionally, anonymity was offered during the initial contact phase, prior to the scheduled interview, however, it was reaffirmed once more before the beginning of the interview. It was made clear in the communication that any data or information provided by the participant would be treated confidentially and used solely for academic purposes. Although, it is important to note that anonymity was offered on an individual basis and most participants chose not to remain anonymous, except for one. Accordingly, to Bell et al. (2019: 117), this may reflect the participants' aim to maintain ownership of their own stories. Nevertheless, ongoing consultation with the participants occurred 34 throughout the research process and anonymity was offered at multiple stages of the study in case participants wished to withdraw or reconsider their anonymity (Bell et al., 2019: 117). The guidelines regarding the use of generative AI tools, provided by the The Gothenburg School of Business, Economics and Law at the University of Gothenburg, have been followed throughout this study. The use of generative AI tools, such as Grammarly and ChatGPT, has been deliberately limited in this report. Specifically, these tools were employed solely to assist with proofreading selected parts of the text, focusing on identifying grammatical and spelling errors. When using ChatGPT, the prompts used were: “Check only the grammar in this text, do not add or change the information in any way”, “Review this text and check only for grammar, spelling and errors, without adding or changing the information included” and “Can you proofread this text and suggest errors in a list, without making changes”. This was done to enhance the clarity and readability of the report, in alignment with the policy recommendations of the Journal of Business Research (Journal of Business Research, n.d.) which warn against relying on AI for potentially inaccurate, incomplete or biased content. While generative AI was utilized restrictively, human oversight was consistently maintained throughout the entire writing process, both prior to and after the use of ChatGPT. 3.6 Limitations of methodology The methodological limitations of our study are primarily based on the undertaking of a qualitative research approach, thus it limits the possibility of generalizing the results. Yet, it is highlighted generalizing is not the purpose of qualitative research (Bell et al., 2019: 66). Furthermore, the limited number of respondents in the data sample may restrict the depth of the analysis and the conclusions of the study. Due to time constraints and limited respondent availability, the sample size did not reach the initially intended target, which would have allowed for a more in-depth investigation of each individual case. Achieving this would have further strengthened the multiple-case study approach. 35 4. Empirical findings The following empirical sections will outline the individual market expansion strategy of the six cases in depth. It includes the barriers they have faced and their perspectives on the industry's regulatory landscape through the conducted interviews, highlighting the unique perspectives of seven respondents with relevant experience. These findings will later on be discussed, compared and finalized in the upcoming chapters. 4.1 Background The nicotine pouch industry is evolving rapidly and the EU presents a particularly challenging market for firms to navigate. Currently, some member states are introducing varying regulatory frameworks to control the market, while others remain unclear, lacking any regulations at all. This lack of a harmonized regulatory environment across the EU significantly complicates operations for companies in the industry which may cause difficulties to develop and adjust market strategies effectively (Duren et al., 2024: 38-39). As outlined in the methodology, the empirical findings were gathered through a series of in-depth interviews with managers or employees who are directly involved in the internationalization process of companies that engage in the production or distribution of nicotine pouches as part of their business operations. Five out of six cases are producers of the product, while one represents an e-commerce operator. The data collection features a diverse range of participants with impressive backgrounds, including Thomas Ericsson, one of the inventors of nicotine pouches, and Bengt Wiberg, the inventor of a product design aimed at protecting gum health. Wiberg is a part of Stingfree, a family-owned startup managed by a father and son. The study spans from major players such as the Haypp Group, the largest e-commerce platform in the sector and Swedish Match, an affiliate of Philip Morris International, one of the world’s leading tobacco companies, to smaller producers like VONT and Company X, which have successfully established a global reach. 36 4.2 Institutional environment 4.2.1 Regulatory environment The interviews reveal that firms across the nicotine pouch industry face significant challenges in navigating the complex and fragmented institutional environment of the EU common market. The evidence gathered from the respondents highlights that there is a concern over the lack of harmonized regulations and the unpredictability of national legal frameworks. Subsequently, the majority of the firms reveal that the regulatory environment has an influence on how and which market they choose to enter and their compliance efforts. All respondents acknowledge the main challenges of navigating the regulatory landscape across the EU common market, pointing either to the variability of local regulations or, in many cases, the complete absence of such frameworks. When discussing the varying local regulations, some of the respondents (E1, F1, F2) highlight the hurdle of understanding and complying with locally specific requirements. The regulations vary from well-established frameworks in certain countries to total bans or regulatory vacuum in others. Moreover, all respondents emphasize that the absence of regulation itself presents a major challenge within the EU common market for firms operating in this industry. Several interviewees (A1, B1, C1, D1, E1, F1) specifically identified the lack of regulatory frameworks as a critical issue, at times viewing it as more problematic than regulatory variation. The risks associated with unregulated markets are repeatedly highlighted, including increased uncertainty and limited operational clarity. Overall, there is a shared view that regulated markets are preferable to unregulated ones. “It's not that there are so many different regulations, the problem is that there are no regulations at all in most countries.” - A1 “There must be regulation, and the better the regulation, the better it is for the market and the better it is for serious parties.” - D1 37 The regulatory vacuum is believed to create the risk of sudden bans of nicotine pouches rather than the implementation of tailored regulation. Various respondents advocate that without proactive legislation, countries may choose to enforce total bans, as was the case with tobacco containing snus (A1, B1, E1). Further, it is explained that in the absence of regulations, the product may enter the market in an unfavorable manner. For instance, entering with high nicotine levels can prompt policymakers to impose bans rather than develop appropriate regulations (E1). Additionally, B1 strongly aligns with this view, claiming that unregulated markets create a “Wild West” environment that invites aggressive marketing and rapid market entries by smaller firms. Larger firms, like B1, avoid such markets due to the risks associated with instability and reputational damage. C1 also agrees with this view by mentioning that there are many other e-commerce platforms who market themselves using questionable methods, often hoping they will not be caught. But as the world’s largest retailer of nicotine pouches, C1 emphasizes that they cannot nor do not want to operate in that way. “It is a highly regulated market, but better a regulated market than an unregulated cowboy market.” - B1 Moreover, some respondents highlight the risk of gray (unclear) and black markets emerging due to inconsistent rules across member states (A1, B1, C1, E1). A1 argues for regulating the product, rather than posing bans that can result in possible access to the product through illegal sales. The respondent C1, elaborates that differing national regulations can encourage gray or black markets and lead to cross-border imports. E1 further comments that e-commerce can enable sales that fall outside the manufacturer's direct accountability. In such unregulated environments, it becomes easier for e-commerce actors to illegally resell, smuggle or divert products to the black market. “If you ban something, a black market will grow.” - A1 Additionally, respondent F2 emphasizes another aspect of the institutional environment, which is the role of large tobacco companies in shaping regulations through lobbying. The respondent argues that, often, such companies have the intent of raising entry barriers for smaller competitors. In contrast, B1 38 notes that the firm sees value in lobbying efforts to influence legislation and engage in dialogue with policymakers and regulatory authorities. This approach aims to effectively communicate the role of nicotine pouches as a smoking cessation aid. “Lobbying and big tobacco are behind it. (...) I think they do want to sell the product but they want it to be regulated. They don't want a small company to own the market.” - F2 Moreover, the respondent highlights the challenges of not being able to create a standardized product to be marketed across multiple countries, as each market requires specific adaptations. Instead, manufacturers have to tailor each product to meet individual country regulations (F1, F2, C1). Followingly, this ultimately influences the firm's market entry as there is no one-size-fits all strategy that can be adopted (F1). 4.2.2 Managing the regulatory challenges in the institutional environments When asking the participants of how the firms manage the challenges posed by the regulatory environment, the responses highlight the necessity of staying continuously updated with regulatory changes, which can emerge rapidly and unexpectedly. All respondents recognize the importance of monitoring the regulatory environment and being informed, however, their approaches of doing so differ. Some firms have invested in internal legal teams where lawyers contribute with monitoring and interpreting the ongoing regulatory updates in the market. Others utilize their networks, staying informed through local partners or major market players to provide updates and insights into country-specific regulatory developments. Several participants (B1, E1, C1, D1, F1, F2) emphasize the importance of entering only countries with clear and established regulatory frameworks. F1 and F2 shares that the firm adopts a cautious stance, avoiding entering markets without a clear regulatory framework. F1 notes the fact that they view investing in regions with uncertain or unstable regulations as too risky, particularly when making significant investments. Thus, it is highlighted that they prioritize regulatory stability to ensure a 39 secure and predictable business environment. F2 further explains that due to lack of financial resources, the risk of facing sudden regulatory changes forces them to take more cautious actions. “We don’t throw ourselves and invest a few million to launch (...) where we don't know how it's going to go, will there be regulations or not? You want to be pretty safe in your investments and we don't have a big bag of money that we can just take a chance with, so we're being cautious.” - F2 Furthermore, in order to manage the varying regulations, some of the respondents (B1, E1) explain that they rely on national legal teams to ensure compliance with local laws. B1, for example, works exclusively with national operators and legal teams in each country to make sure that their activities remain compliant within national frameworks. E1 follows a similar line, including categorizing EU countries through an internally developed classification system into “green” “grey” and “red” zones, depending on regulatory status. The different zones are used as a framework to help the company prioritize efforts and prepare accordingly. However, although a market may be considered grey or red, it does not mean the company disregards it. Instead, they continue to monitor such markets closely in order to be ready to act once favorable conditions emerge (E1). “We know that eventually it will be reopened and then it's about being ready. (...) We continue even though it’s a closed market.” - E1 C1, while sharing the desire for legal clarity, emphasizes the practical challenges posed by differing national regulations, which can encourage gray or black markets. To address this, C1 focuses on developing flexible e-commerce platforms that adapt to each country’s legal requirements, including implementing localized payment systems and age verification measures. The respondent concludes that this approach allows the company to balance the need for scalability with strict legal compliance in order to maintain legitimacy. Further, a hybrid approach is highlighted, where F2 explains that they combine internal monitoring with support from an external compliance firm. However, due to third-party services alone considered 40 insufficient to meet frequent regulatory changes, there is reliance on informal industry networks, including competitors and wholesalers, to stay informed. Likewise, besides Company X’s in-house legal team, E1 reveals that the firm maintains an ongoing communication to local partners in each country. Further, participant D1 expresses that they are establishing and engaging in relationships with well-established cigarette companies that provide effective knowledge about the environment in order to stay compliant. “You need to stay updated. We have someone in compliance that updates us from time to time. Besides that, there is a lot of external politics, that is, external monitoring that we have to do ourselves.” - F2 “We try to be smart about it, but mostly I do it by having good relationships with cigarette companies.” - D1 In the discussion of how to stay compliant, it is mentioned by several participants to be a continuous challenge due to the pace and unpredictability of legal changes across the EU common market (E1, F2). Further, it is expressed that even extensive preparation cannot eliminate regulatory risk. Despite proactive efforts, respondent E1 highlights the significant financial and operational risks posed by sudden regulatory shifts. This argument is illustrated with an example where a market entry was interrupted due to an unexpected ban, despite full preparation. The participant emphasizes the unpredictability of the institutional environment and the risks of operating in unstable or rapidly changing regulatory markets. “However prepared you are for whatever regulation it is, you will be harmed by it. It's rare that you actually benefit from a new rule or regulation.” - E1 4.2.3 The social environment Respondents across the firms consistently emphasize the significant role, besides regulatory factors, that cultural and consumer behavior play in shaping the acceptance and success of nicotine pouch products in various countries across the EU common market. Several participants (A1, B1, C1, D1, 41 F1, F2) emphasize that cultural context matters in shaping consumer acceptance. In particular, some of these respondents (B1, C1) elaborate that cultural norms and established consumption habits influence product preferences, especially when introducing alternatives to the traditionally dominant use of cigarettes in many EU countries. “There is a cultural perception of what is considered okay to consume and what to use, so in some markets it takes longer to teach people.” - C1 The firms continuously mention the challenge of encouraging smokers to switch to nicotine pouches, portrayed as a healthier alternative. However, A1 identifies an additional issue, the negative image of nicotine pouches in relation to oral health, which through the media influences the acceptance of the product. A1 elaborates that large companies tend to downplay or distance themselves from media coverage related to oral health concerns, as such discussions could discourage product usage. In contrast, B1 points out the difficulty of managing the right balance in communicating the message effectively across these markets. The respondent mentions the difficulties with the product ending up outside the target consumer group, such as the younger demographic. “We are not the ones selling the products, but we still have a responsibility as a producer to ensure that our products are sold responsibly” - B1 However, all of the respondents are united in that the product should serve as an alternative, targeting smokers and supporting tobacco cessation. Sweden is often mentioned for having ideal figures in terms of low smoking rates, such figures that align with the EU’s goals. On the other hand, many participants (B1, C1, D1, E1, F1) agree on the lack of the awareness surrounding the practice of nicotine pouches in countries, which is perceived to hinder its acceptance. They further describe that there is a challenge in markets without a tradition of oral nicotine use, where consumers are often unfamiliar with the nicotine pouches and how to use them. Additionally, C1 highlights that what alternative product is accepted can have a cultural influence of what people in the specific market are used to, whether it is vapes, heated tobacco products or nicotine pouches. The respondent further 42 elaborates that it can be a process to educate consumers to use nicotine pouches, placing something in the mouth, rather than using products like pens or sticks that require inhaling. Furthermore, B1, E1 and F2 add that early negative experiences, such as launching high-nicotine products in an unregulated market can shape regulatory outcomes and public perception. It is explained that introducing the product in this way can hinder market expansion, particularly if it results in policymakers becoming hostile toward the product, or worse, imposing a ban in the country. On the other hand, F2 offers an interesting perspective when discussing the topic of consumer demands, revealing that nicotine strength preferences is a key factor for acceptance. The participant shares an example of where early product launches faced resistance in EU markets due to perceived low nicotine levels. Further, the participant distinguish this between Swedish users, who typically start with lower nicotine doses and scale up gradually, while new users in other EU markets often prefer higher nicotine strengths from the start. “The biggest cultural difference is, we have been snusing in Sweden and we have been doing nicotine far before everyone else (...), you have customers who have just started snusing and they are going to 20, 30 mg just like that. It's really strange because usually within tobacco there is a scale up phase (...) I don't understand how new users find a product like that and think ‘yeah, it's great’. That's the biggest cultural difference and I don't understand how it works either.” - F2 4.2.4 Managing the social challenges in the institutional environments To meet local differences, VONT tailors its approach to local demand, particularly in markets where nicotine preferences vary. For instance, the firm has acknowledged the preference of higher nicotine levels outside its domestic market, which they adapt to. F2 explains that “there is no point in launching a product outside Sweden that is below 10 mg.” Several participants express a (B1, C1, D1, E1, F1) belief that in countries without a tradition of oral nicotine use, consumer education is essential. D1 and E1 further suggest that in order to achieve awareness of the purpose of the product, large-scale educational initiatives are needed. The participant 43 elaborates that it is likely beyond the capacity of smaller firms and believes it requires the involvement of major tobacco companies to put such initiatives in action. As aforementioned, B1 highlights lobbying efforts as an effective means to establish dialogue with policymakers and relevant authorities to communicate the product’s role in tobacco harm reduction. E1 further stresses the importance of clear communication with consumers, including usage instructions on labels as a proactive tool to facilitate product adoption rather than just a compliance measure. Regarding the challenge to reach the desired demographic and avoid youngsters or non-smokers, B1 describes the firm's ability to carry out various surveys and investigations, such as studies on age verification at purchase of nicotine pouches. These efforts support the company's commitment to responsible sales practices, particularly since they do not sell directly to end consumers. B1 notes that smaller firms often lack the financial resources to conduct such costly investigations, but for a larger company, these initiatives are feasible and contribute to ensuring that the market works in a responsible way. It is further noted by C1 that the nicotine pouches is an age-restricted product, thus, they also work with investing in age verification methods on their website. Moreover, F2 notes that cultural similarities can support the adoption of nicotine pouches in certain markets. For example, Germany, which the respondent believes is culturally similar to Sweden, suggests widespread potential acceptance for nicotine pouches in that market. Additionally, E1 emphasizes that social media has played a pivotal role in increasing global recognition of nicotine pouches and normalizing their use across diverse cultural contexts. "Every market takes its time to establish, but there hasn’t been any resistance at all, it’s moving so fast. Today, people know what it is, even in countries that have never seen a nicotine pouch in their lives, they still more or less know what it is and that’s because we have social media today. It’s so global and it’s a trending product. It’s been trending for several years now, and the trend is continuing." - E1 44 In terms of raising awareness of the product the respondent C1 suggests that nicotine pouches are the most viable and sustainable long-term option. This is largely due to their relative freedom from certain regulations that may affect other products. For example, C1 explains that nicotine pouches often face fewer restrictions on where they can be used, allowing consumers to use them more . For example, C1 explains that nicotine pouches often face fewer restrictions on where they can be used, allowing consumers to use them more freely in various settings. Regulatory Social Challenges of the ● Varying local regulations ● Cultural norms environment ● Absence of regulations ● Consumption habits ● Unpredictability of national legal ● Delivering the intended frameworks message of the product ● Gray or unclear markets ● Targeting the desired ● Product adaptation demographic ● Lack of product awareness ● Perceived negative product introduction Navigating the ● Continuous monitoring of regulatory ● Adapting product to local challenges environment preferences ● Monitoring through internal legal ● Consumer education raise teams awareness concerning the ● Insights from local partners or other products purpose market players ● Lobbying efforts ● Lobbying efforts ● Clear communication with ● Selective market entry consumers ● Locally adapted platform ● Surveys and investigation of developments end consumer Table 3 Summary of what institutional challenges firms meet and how they navigate them 4.3 Market entry strategy The interviews reveal that the participating firms commonly rely on e-commerce, distributors, wholesalers or a combination of all three to expand their presence within the EU common market. For instance, some respondents (B1, E1, F1, F2) indicate that their firms utilize all of these means as part of their market expansion strategies. Further, it is revealed that some firms adjust their market entry strategy depending on the characteristics of the market which they intend to enter, whilst other firms 45 utilise the same strategy when entering different markets. Additionally, respondent E1 stresses the company's aim for an early and rapid market entry. The firm actively seeks to be among the first entrants into newly regulated markets. They are able to manage a first-mover advantage, by constant monitoring of legal environments and strong partner networks that allow for swift action when market conditions change. “To be there first, always be up to date, and for that, you have constant local contacts” - E1 From the empirical data, it is highlighted that national distribution structures within the EU can affect the entry mode strategy. Respondents A1, B1 and E1 explain that in Sweden, product distribution is centralized through a single logistics partner, Swedish Match Distribution (SMD) Logistics, which acts as the sole delivery point. All retailers place orders directly through this entity. SMD Logistics was previously owned by Swedish Match, but in relation to PMI’s acquisition of Swedish Match the European Commission required the subsidiary to be sold. Otherwise, PMI together with Swedish Match, would have gained a monopoly position in the distribution of nicotine products in Sweden (European Commission, 2022). Similarly, respondent E1 elaborates on the presence of comparable systems in other EU countries, such as Italy and Spain, where state-controlled monopolies manage the distribution of nicotine products. In these cases, E1 explains that private companies must go through designated intermediaries like Logista, which the respondent explains to be a distributor equivalent to SMD in Sweden. For instance, in Italy, manufacturers and importers are required to notify the Customs and Monopolies Agency (ADM) and the Ministry of Health six months prior to placing any nicotine pouch product on the market (Di Lorenzo, 2022). While such monopoly structures are heavily regulated, E1 notes that they can actually simplify market entry once access is granted, since the monopoly holder then manages sales and distribution across the country. On the other hand, E1 discusses that entry into non-monopolistic EU countries presents a different set of challenges. These markets may appear more open, but then the responsibility of finding effective ways of selling their product lies with the firm. E1 elaborates that it is up to the company to identify and secure distribution 46 partners who possess the right market knowledge, networks and scale to ensure successful market penetration. Respondent A1 notes that Stingfree AB has patented its innovative design of the product, being a protective shield that reduces the risk of snus-related oral lesions and other common oral health issues, in several EU markets. Further, it is revealed that Stingfree AB has had a licence agreement with Swedish Match (represented in this report by B1) for ten years, but they have not quite utilised the agreement. 4.3.1 Non-traditional market entry C1 explains that Haypp Group aims to be a partner to suppliers of nicotine pouches rather than a competitor, by offering valuable consumer insights and an extensive network of contacts. Competing directly with producers would be less beneficial, instead, Haypp Group prefers collaboration. As nicotine pouch producers often need to tailor their products to specific markets to meet local legal and regulatory requirements, C1 notes that if a supplier does not want their products sold in a particular market, Haypp Group complies with that decision. Nonetheless, C1 emphasizes that the decision to enter new markets ultimately is based on their own strategic priorities. “We compete with the suppliers, we want to be the suppliers' best friend and advisor since we have all the consumer contacts.” - C1 Specifically, the majority of the respondents (A1, B1, D1, E1, F1, F2) revealed that they utilize e-commerce partners to export their products and access the EU common market. All of the respondents indicate the strategic importance of partnerships with major e-commerce platforms, particularly in facilitating broad market reach. For instance, according to E1, they have reached nearly all EU member states, using e-commerce to maintain access even in markets with retail restrictions. Notably, A1 revealed that the firm has leveraged online sales to expand its global reach by partnering with 17 different e-commerce firms. Through collaborations with online retailers the company, despite 47 being a small team of just two people, has managed to distribute its products in over 100 countries worldwide. The respondent noted that it is the e-commerce platforms themselves that determine which products are offered in each market through their respective websites. “We are pretty much all over the EU, because we also work with e-commerce and with two of the world's largest e-com websites for nicotine pouches that are in Europe (...), so it's enough that we sell to them and then they take care of the rest.” - E1 “For a small company like Stingfree with two people working full-time, e-commerce becomes a very good distribution channel.” - A1 The empirical data include the perspective of an e-commerce operator where participant C1 provides insights as one of the largest e-commerce in the sector. C1 explains that the firm utilizes the same entry strategy when expanding into different markets, described as a scale up phase where they first engage in exporting directly from a country. Thereafter, they gradually attain a third-party-logistics (TPL) practice, where they rent themselves into a warehouse in the specific market which only handles their products. C1 elaborates that they prefer to be as national as possible selling products which are manufactured and customised for that particular country rather than sending products from one country to another. This approach allows them to use the same e-commerce platform while adapting individual sites to comply with varying regulations and tax requirements in each country. Similarly, B1 and F2 agree that although e-commerce offers the possibility to reach multiple countries at once, they prefer to keep operations national to ensure regulatory compliance. F2 further highlights that established and serious online retailers tend to operate under clear territorial agreements. The respondent specifically mentions working with online retailers like Haypp Group (represented in this study by C1), noting that such established e-commerce actors negotiate dedicated deals separately for each market to ensure that products meet national regulatory standards before distribution. “We want to sell national products, with national regulations and national taxes.” - C1 48 “Even though the service exists, we would probably keep it at the national level to be able to make reasonable judgments, so I think this is the big difference between small and large companies.” - B1 The interviews revealed that through e-commerce it is possible to export nicotine pouches globally, including across the EU common market. Even in member states where sales of nicotine pouches are banned, it is mentioned that consumers in these countries are able to order the products through online platforms. E1 explains that even though they do not engage in such activities, it is possible through e-commerce to expand to countries like Belgium or the Netherlands where nicotine pouches are banned. E1 concludes that their responsibility ends once the product has been delivered to the e-commerce partner, resulting in a risk of their product ending up at a website selling to countries where the sale of the product is banned. The participant note that their company actively avoids this risk by choosing not to collaborate with such e-commerce platforms, though they highlight that there are other nicotine pouch firms that might engage in these practices. Moreover, A1, in terms of online sales, explains that they do not really engage in market selection themselves, instead they adhere to the e-commerces criterias. This means that they rely on e-commerce partners to choose which market their product is available in. 4.3.2 Traditional market entry Besides exporting through e-commerce, A1 and E1 revealed that the company collaborates with local retailers who offer their products in physical stores, although for A1 this remains a relatively limited part of their operations. Similarly, when it comes to physical presence, participants F1 and F2 describe that beyond using e-commerce and wholesalers, their market entry strategy is adapted according to the size and complexity of each market. They explain that in larger markets, they establish a local team whereas in smaller markets, they depend more on wholesalers. Their current presence in the EU common market reflects a reliance on wholesalers, as the countries they operate in are considered smaller markets. 49 “Today we use wholesalers and various e-commerce to push the product. We do not have a team in place ourselves. In our world, we acquire it when we feel there is a hope for the country as well as that ‘OK, but sales seem to be going well, we'll have to set up a team’, that's how we're thinking.” - F2 “For example, when we wanted to launch in Iceland, Iceland is a small market. So we sourced a distributor there (...) whereas UK, UK is a big market and we wanted to have our team there.“ - F1 B1 explains that the firm leverages its large scale and established local resources to introduce new products in new markets, emphasizing the importance of their existing global physical presence. Reflecting on their own experience, B1 elaborates on the strategic advantages PMI gained through its acquisition of Swedish Match. This acquisition provided PMI with access to established production facilities and a strong foothold in the Nordic markets, extending beyond its previous operations. On the other hand, the participant explains how PMI already had an established presence all across the EU, which facilitated the introduction of Swedish Match’s products. B1 further explains that due to their large company size they are able to adopt a local office model to manage its EU operations, leveraging its broad network of local offices to introduce new products. When addressing the topic of entering new markets, B1 does not frame it as expansion, but rather as making use of existing internal resources. “It's not an expansion, we are utilising the offices we already have.” - B1 Respondent E1 explains that their products are manufactured in Finland and Sweden, where they also have sales offices. When discussing the idea of managing sales internally across various markets, E1 notes that if they would manage the sales themselves without distributors, it would require a substantial investment. It is elaborated that it would entail opening offices and possibly factories, in each country, suggesting a shift from a B2B to a B2C approach. This approach is seen by the respondent, not only to be costly but also impractical for the firm due to limited local market knowledge. Instead, the company relies on large, experienced distributors referred to as big sharks 50 who may already have contracts with major retailers and supermarket chains. As E1 emphasizes, even with an in-house setup, reaching end customers would be difficult without these established distribution networks. Similarly, D1 and F1 explains that when working with distributors or wholesalers, the company carefully evaluates potential partners by reviewing their track record including assessing their reliability, market reach and previous performance. “A market we don’t know, we are not local, then it is good to have these big sharks of distributors who know the market that have worked with other products, for instance, worked with tobacco or energy drinks (...) and have this big network so they have access to more or less the entire market.” - E1 4.3.3 Key factors for market selection While there are variations in strategy and structure, all firms emphasize the importance of established regulation, demand and reliable partnerships. When asking the participants about key factors for selecting a market to enter, a consistent theme across the firms is the necessity of operating within clearly regulated environments. Several respondents (B1, C1, D1, F1, F2) explicitly state that they only enter markets where nicotine pouches are legally allowed and where a regulatory framework is in place. Similarly, B1 emphasizes that they avoid unregulated or prohibited markets entirely. In 2022, Swedish Match revealed that they did not sell nicotine pouches to Italy due to unclear regulations, but that they might be likely to do so once the country established clear regulation (Di Lorenzo, 2022). It is commonly expressed among the respondents that it is a risk to invest in regions with uncertain or unstable regulations. “We have a commitment to only operate in countries that have regulated nicotine pouches (...) so we can release products that are regulatory acceptable by the host country.” - F1 “If sales of nicotine pouches are prohibited in a country, we have no online sales.” - B1 51 A1, on the other hand, does not actively engage in market selection for their online sales, instead, they adhere to the criteria set by the e-commerce company. This means that they rely on the e-commerce decision to expand their product availability. Another key factor shared among the firms is the role of consumer demand and market size. Many of the participants (C1, F1, F2) prioritize market potential based on the presence of nicotine pouch users and the smoking population. These participants aim to target smokers as part of their growth strategy. One of the participants, F1, put a significant emphasis on product-market fit as a key factor. “(...) are our products compatible with those consumers?” - F1 Additionally, partner credibility and distribution capabilities are also critical considerations for most firms. E1, F1 and F2 stress the importance of selecting experienced and trustworthy partners, especially those familiar with the tobacco or related sectors. The participants from VONT further comment on the importance of assessing how serious and reliable a potential partner is, their market presence and how successful they have been with other brands. Further, D1 confirms relying heavily on contacts and partnerships, describing how collaboration with larger industry players has been key to their market development, particularly in product innovation. Another interesting factor mentioned by some of the respondents (B1, C1, E1, F1) concerns taxation and financial conditions of the product in the market. The respondents emphasize the importance of excise duty on the products. E1 explains that this factor influences market selection, as selling to countries without excise duties allows the company to reclaim Swedish nicotine taxes. B1, on the other hand, has legal teams that ensure compliance, prevent illegal sales and will not enter markets that lack tax structures aligned with their operating model. Additionally, C1 also supports the view that the product should be subject to excise duty. F1 further emphasizes that assessing whether the pricing in a target country aligns with VONTs overall pricing strategy is a crucial factor in their market evaluation. 52 Entry mode strategy Key Factors for market selection A1 ● E-commerce ● Indirect market selection through ● Export e-commerce firms B1 ● Acquisition ● Regulated environment ● Sales offices ● Taxation and financial conditions ● E-commerce ● Export C1 ● E-commerce ● Regulated environment ● Export ● Taxation and financial conditions ● Demand and market size D1 ● E-commerce ● Regulated environment ● Export ● Partnerships E1 ● E-commerce ● Partnerships ● Export ● Taxation and financial conditions F1 ● E-commerce ● Regulated environment ● Export ● Demand and market size ● Partnerships ● Taxation and financial conditions F2 ● E-commerce ● Regulated environment ● Export ● Demand and market size ● Partnerships Table 4 Summary of market entry strategy 4.4 Possible Regulatory Harmonization The interviews show that all participants believe harmonized regulation of nicotine pouches across the EU would support both public health goals and their business operations. Thus, all of the respondents hope to see a regulatory harmonization across the EU common market in the future. A recurring theme is Sweden's regulatory framework that is often raised as a model worth copying due to its proven effectiveness in reducing smoking rates. Some of the respondents (A1, F1, F2) argue that Sweden’s approach, due to its long-term experience of the product and its regulations, is evidence that offers a mature and functional model that could guide future EU regulation. Further, several participants (A1, B1, D1, F1) criticise the current regulatory environment across the EU common market as politically motivated, rather than science-based. Several participants (B1, C1, F1, F2) hope 53 to see the upcoming EU framework, referring to the TPD3 as a relevant opportunity to include regulation regarding nicotine pouches. F1 specifically mentions the relevance in acknowledging key areas like health warnings, nicotine strength limits, age restrictions and labeling. “It [regulations] is good for us and for our future.” - C1 “Why can't you look at the Swedish model and regulate the products in the same way?.” - F1 “In my world, it would be great if they included nicotine pouches inside the EU TPD 3.” - F2 Additionally, the same participants (B1, C1, F1, F2) argue that unified EU-level regulation can serve as a tool for business facilitation and public health advancement. B1 points out that clear legislation not only supports consumer safety but also brings market predictability, a necessary condition for larger companies like PMI that are unwilling to engage in aggressive tactics, often used in unregulated markets. C1 further supports this by arguing that a harmonization of regulations would make the market easier to navigate for firms. “I think it will be positive for nicotine producers and retailers to know what the rules of the game are.” - C1 While the snus-guru (D1) sees regulation as crucial to support the ongoing conversion of smokers to safer alternatives, respondent E1 is more skeptical about the feasibility of full harmonisation. The respondent believes varying national rules will likely persist until the EU updates its tobacco directive (C1, E1, F2). E1 and F2 further highlight that even if the common market becomes more accessible, national and regional laws will persist, maintaining regulatory differences across the individual countries. The respondent refers to current variations, for example, in packaging or nicotine limits and highlights that such regional regulations will continue to shape market dynamics. Further, F2 elaborates on this by mentioning Finland’s flavour ban, which is applied even though the country follows other EU tobacco rules. 54 “I don't think it will ever be the case that one law applies to all countries.” - F2 Outlook on possible regulatory harmonization Predicted results of harmonized regulation ● All respondents are in favor of a ● Business facilitation harmonized regulatory framework across ● Market predictability the EU ● Public health advancements ● Hope for inclusion of nicotine pouches in ● Controlled market future EU directives ● Suggestion of Swedish regulatory approach as a benchmark ● Scepticism about the feasibility of full harmonisation Table 5 Summary of future outlook on possible harmonization 55 5. Discussion and analysis This section integrates the findings from the literature review and the empirical results through a multi-case analysis. The discussion is guided by the conceptual model and is structured to address the research question directly. Furthermore, it incorporates the researcher’s interpretation of the results and highlights potential gaps between the empirical evidence and the existing literature. 5.1 Institutional environment There is a strong alignment of the empirical findings and the key concepts derived from institutional theory. The empirical findings suggest that all respondents agree that they operate in a constantly evolving business environment, where changing market conditions create uncertainty and significantly influence their operations. Similarly, from the literature it can be found that institutional change driven by regulatory, technological and political factors often increase the uncertainty in the institutional environment, further weakening the institution (Hotho & Pedersen, 2012: 140; Meyer, 2001: 35). These uncertainties are also found to intensify with formal institutions, as they often evolve slowly and do not keep up with rapid changes (Moura et al., 2021: 243-246). The lack of clear or even established regulations across the EU common market exemplifies this uncertainty. Majority of the respondent revealed that the absence or inconsistencies in the regulation of nicotine pouches has hindered their strategic planning and market entry decisions. The conceptual model presented in Figure 3 aligns with these findings, as institutional theory, particularly the regulatory environment, clearly influences the choice of entry mode, illustrating how institutional contexts shape potential barriers. However, the model does not account for how these barriers might, in turn, influence the institutional environment. The institutional voids create what respondents B1 refer to as “Wild West” environments or as described by other respondents (A1, C1, E1) as “grey” zones. In such environments many of the respondents have witnessed aggressive marketing and unethical practices, which they consider a factor influencing the stability in the market. 56 The institutional theory outlines three pillars in which stability and legitimacy are established; regulative, normative and cultural-cognitive (Buckley et al., 2018: 141). The empirical data describes how these dimensions in some way influence or shape the nicotine pouch market. The regulative pillar is most evident from the findings, as legal restrictions are seen to determine where firms can or choose to operate. For example, the majority of the participants reveal that they only operate in markets with clear established regulatory frameworks where they are able to comply with relevant regulations. Further, the empirical findings suggest that the variability in regulatory conditions across the EU nicotine pouch industry results in firms moving toward countries with more established frameworks put in place, in order to minimize uncertainty. This behavior reflects the concept of coercive isomorphism highlighted by Kostova and Roth (2002: 216-217), which describes how organizations may gradually adopt similar practices and strategies, in response to external pressures from powerful entities. By aligning with existing legal structures, firms seek to gain legitimacy and ensure compliance. Supporting this, respondent C1 further describes that by adhering to legal requirements in each market they enter, the firm is able to maintain legitimacy, which is facilitated when the firm only enters markets with clear regulatory frameworks. Furthermore, North (1990: 97) describes that institutions are also shaped by informal conditions and the critical role which it plays in influencing the environment which firms operate in. Similarly, several respondents emphasize the importance of cultural acceptance when introducing the product into a new market (A1, B1, C1, D1, F1, F2). For instance, some respondents noted that strong national preference and historical ties to cigarette use have influenced how nicotine pouches are perceived in the specific market. Respondent C1 describes how the alternative to cigarettes that is accepted by the market is culturally influenced by what people in the specific market are used to. From the empirical results it is revealed that the majority of the respondents agree that the lack of awareness and understanding regarding nicotine pouches hinder the acceptance in the market. This can further be connected to the cultural-cognitive element in institutional theory, which influences how, for example, societies interpret new phenomena based on their shared beliefs. In a situation where consumers lack 57 familiarity, the literature suggests that acceptance becomes more challenging, similarly to what is revealed by the empirical findings (Buckley et al., 2018: 143; Kostova & Roth, 2002: 216). Further, A1 describes how the negative image of nicotine pouches in relation to oral health, largely through the media, influence the acceptance of the product in the market. The respondent elaborated that large firms in the industry often distance themselves from media coverage concerning oral health, as it may discourage product sales. In contrast, B1 points out that they have experienced challenges in managing the right balance in communicating the correct message effectively. Furthermore, the respondent mentions the challenges of preventing the product from ending up outside of the target consumer group, such as in the hands of the younger demographic. This concern can be connected to the normative pillar described by Buckley et al. (2018: 142-143), which focuses on social values, norms and expectations. Selling or marketing nicotine pouches to an unintended segment, especially young people, while it will not always break legal regulations it can be against widely held social norms. This may suggest that firms are expected to act in a way which aligns with social expectations. Furthermore, F2 identified cultural similarity between Sweden and Germany, which the respondent describes as a factor likely to support product acceptance. This highlights the role of cultural factors in shaping market dynamics. While the respondents are able to leverage the interconnectedness of markets, through for example e-commerce platforms, persistent cultural traits are still seen to create institutional variation (United Nations Development Programme, 2024: 47; Pooch, 2016: 18-19). Similar to what is demonstrated in the literature, the empirical findings suggest that cultural norms and preferences influence the market. Thus, several respondents reveal that they must tailor products and strategies to local contexts. For instance, the respondent F2 discusses the challenges of creating standardized products due to differing national regulations but also, in terms of product preferences. Moreover, the respondent notes that they have experienced varying nicotine strength preferences outside of their domestic market which further illustrates the persistence of cultural-cognitive norms in shaping markets, even amid global structural convergence (Kostova & Roth, 2002: 216; Rosenzweig & Singh, 1991: 344-345). The conceptual model describes how the perceived 58 harmfulness of the product can be seen as a barrier together with the regulatory uncertainty. The lack of awareness among policymakers, regarding nicotine pouches, not only affects product acceptance but also leads to uncertainty about how to appropriately regulate these products. However, as the empirical data reveals, firms encounter additional types of market barriers not fully captured by the current conceptual model illustrated in Figure 3, highlighting the need for its revision. These insights derived from the empirical findings correlate with the literature suggesting that the institutional environment affects not only investment outcomes, but also strategic decisions concerning entry mode choice and market selection (Hotho & Pedersen, 2012: 141; Buckley et al., 2018: 1379). Firms must weigh the costs of regulatory uncertainty and the effort required for market-specific adaptations. As individuals, in this case referring to companies, operate with incomplete information and bounded rationality, when attempting to reduce uncertainty in the market they become a subject to transaction costs (Ménard & Shirley, 2025: 2). Through strong and stable institutions, transaction costs and uncertainties can be reduced, creating a more efficient market (Hotho & Pedersen, 2012: 140; Meyer, 2001: 358). In contrast, the EU's fragmented approach to regulating nicotine pouches is seen by several firms as contributing to uncertainty and inefficiency, which in turn leads to investor hesitation and increased transaction costs and may influence the nature of contracts and agreements in the market (North, 1986: 231). 5.1.1 Managing the challenges of the institutional environment The literature references strong and stable institutions as an essential factor for reducing transaction costs, lowering uncertainty and creating efficient markets (Hotho & Pedersen, 2012: 140; Meyer, 2001: 358). These qualities are repeatedly emphasized by several respondents who indicate that their firms prioritize entering countries with clearly defined and established regulatory frameworks in place. Similar to the literature on institutional theory, the empirical findings revealed the importance of institutional clarity in reducing uncertainty and fostering efficiency. 59 Since many markets in the EU lack regulations in regards to the nicotine pouch industry, the participating firms are seen to rely on utilizing other approaches to manage the challenges that may occur from institutional environments. All respondents acknowledge the importance of staying informed, however, from the empirical findings their approach to do so varies. Some firms invest in internal legal teams which are responsible for tracking and analyzing regulatory updates in order to ensure compliance to local regulations (B1, C1, E1). This proactive strategy aligns with Oliver’s (1991: 150) description of active conformity, where organizations deliberately reinforce institutional demands in order to gain legitimacy and ensure operational consistency. In contrast, other firms reveal that they leverage external networks such as local partners and leading market players to gain market knowledge (D1, E1, F1, F2). These informal monitoring mechanisms underscores Sauerland’s (2015: 22-25) argument that successful adaptation to institutional change is about aligning with both formal and informal norms. Further, participant B1 through its local offices, effectively leverages ownership advantages by drawing on its established network of knowledge. According to the majority of the firms, the following practices are highly valuable in preparing for rapid changes, including engaging in monitoring, building and maintaining partnerships, and acquiring local knowledge. Additionally, the respondents E1 has developed an internal classification system that categorizes EU countries into different zones based on regulatory clarity. This internal framework enables the company to prioritize strategic efforts. The firm therefore continues to monitor the markets which are considered as gray or even red zones, in order to be prepared to act once favorable conditions develop. This further demonstrates a type of selective compliance, where the firm is not fully accepting nor resisting the institutional pressure (Oliver, 1991: 164). Institutional environments are not static and may undergo shifts caused by external and internal factors, which may explain why participants, like E1, describe remaining ready to respond to markets even in less favorable environments (Ferrara, 2022: 110; Micelotta, 2017: 5). Such strategic responsiveness is particularly critical in contexts where formal institutions evolve slowly, struggling to keep pace with external changes, such as the described industry changes mentioned by the respondents. This mismatch between rapid market developments 60 and slow institutional responses intensifies makes it difficult for firms to anticipate regulatory developments, creating uncertainty which may demand for a constant adaptation need. Yet, when formal institutions eventually align with current societal and market conditions, they are able to enhance legitimacy, stability and compliance which reinforces the credibility of the institutional environment (Moura et al., 2021: 243-246). Furthermore, to increase market acceptance and respond to informal challenges such as low consumer awareness, firms often engage in local adaptation when entering and expanding within the EU common market. Respondent E1 illustrates this by highlighting the use of clear consumer communication, such as including usage instructions on product labels, as a means to enhance awareness and support product adoption. This approach also helps firms navigate institutional expectations. Similarly, F2 explains how they tailor their products to local demand, for example by adjusting nicotine levels to match regional preferences. Regarding concerns about the product reaching unintended users, several respondents (B1, C1, D1, E1, F1) stress the importance of consumer education. B1 and C1, for instance, notes that nicotine pouches are age-restricted products, emphasizing the need for age verification systems to ensure responsible distribution and to safeguard against misuse. Consistent with the literature that challenges the view of firms as passive actors during institutional changes, the empirical finding shows that the nicotine pouch firms often adopt strategic responses to institutional pressure rather than merely conforming (Oliver, 1991: 145-146, 173-175; Suchman, 1995: 577). While some respondents engage in full compliance in order to gain legitimacy others adopt partial or symbolic compliance in specifically law enforcement settings (Suchman, 1995: 577). This is visible in how some respondents reveal that they continue observing restricted markets, which may suggest a form of symbolic isomorphism, where the firms mirror regulatory expectations without fully integrating demand into their core operations (Kostova & Roth, 2002: 216; Meyer & Rowan, 1977: 355-356). Further, the findings explain that firms are able to utilize e-commerce to exploit regulatory loopholes and access markets where nicotine pouches are unregulated or banned. This can 61 be described as engaging in avoidance strategies, specifically through symbolic or selective conformity (Kostova & Roth 2002: 216; Oliver, 1991: 164). Moreover, external dependence is seen to play a vital role in shaping compliance strategies. Oliver, (1991: 164) Pfeffer and Salancik (1978: 58-59) argue that firms who are highly dependent on government actors are more likely to comply, while those with lower dependence may adopt an avoidance strategy. In some cases, firms may go beyond adaptation and attempt to reshape or influence the institutional environment (Greenwood et al., 2008: 496; Lawrence & Suddaby, 2006: 21-22). The respondent B1 reveals lobbying efforts as an effective means to establish dialogue with policymakers and relevant authorities to communicate the product’s role in tobacco harm reduction. However, other respondents have described this way of influence by larger companies as a way to exploit the opportunity to remain in control of the market, creating a monopolistic business environment. Respondent F2 explicitly mentions that these types of firms do it out of self interest, which can make it difficult for smaller firms to gain market share. Since firms are competing against different actors on the market with varying resources and power, variation in size can have an impact in how they experience and are able to manage institutional pressures. This is an aspect that the empirical findings reveal, but is not fully captured by existing literature on institutional theory. 5.2 Market entry strategies 5.2.1 Traditional entry modes: a comparison of non-equity and equity entries The empirical findings reveal that the market entry strategies of the firms into the EU common market are significantly influenced by the regulatory environment. Firstly, the main entry mode that is revealed to dominate in the industry is non-equity entry modes. This is used by most participants, but as shown, particularly those with fewer internal resources or less experience in a given market. A1, C1, D1, E1, F1 and F2, all reveal to rely on non-equity entry modes. The entry is further dependent on exporting, likely due to being a low-cost and low-resource commitment entry mode, as highlighted by 62 Welch et al. (2007: 239-241). Further, Welch et al. (2007: 239-241) note that exports allow for a market entry by assuming minimal risks, which is perceived to be an important part of the firm's strategy as respondents find the regulatory environment to be unclear and uncertain. Exports are mentioned to be done through the use of intermediaries such as retailers, wholesalers or distributors which deliver the product to the end customer. Thus, as Yasar (2013: 110) suggests, this illustrates an indirect exporting entry mode, where the company has minimal direct engagement with customers, yet based on what Buckley et al (2018: 287) conveys, the firm gains the benefit of a rapid market entry with a lower investment as well as risk. However, the respondents highlight that they close deals with distributors to help them to enter new markets as the distributors possess market knowledge and that they often in turn hold agreements with retailers. The establishment of contracts with distributors could be argued to be an entry mode through contractual agreements (Erramilli et al., 2002: 223). Notably, Stingfree AB has patented its design of the product in several EU markets and has had a licence agreement, noted by Erramilli et al. (2002: 223) to be another type of contractual agreement, with Swedish Match for ten years. However, A1 mentions that they have not utilised the agreement yet, which might imply that Stingfree AB's intended mode of market entry may not have been successful. In contrast to the more commonly used non-equity modes, equity-based entry strategies were mentioned in only a few of the cases from the data sample. Firstly, PMI’s acquisition of Swedish Match illustrates the establishment of wholly owned subsidiaries, particularly through acquisition of an existing firm (Buckley et al., 2019: 291-292). This is illustrated by B1, who reveals that PMI managed to expand into the Nordic markets through its acquisition of Swedish Match. It is elaborated that PMI gained both production capabilities and market legitimacy in the Nordic region through this acquisition. This aligns with Yiu and Makino (2002: 667-668) who argue that from an institutional perspective, this type of entry mode can be a strategic move to facilitate legitimacy in uncertain environments. 63 From a resource-based perspective, Dunning’s eclectic paradigm further clarifies how firms choose between equity and non-equity modes. B1 exemplifies that, as a large multinational firm, it leverages ownership advantages and internalized operations through a network of local offices and a worldwide established presence. The acquisition of Swedish Match is described by B1 less as a typical expansion and more as a smart way to make better use of existing resources, showing how FDI can help with both entering new markets and creating smoother operations (Dunning, 1988: 10; Mudambi, 2018: 456-458). Further, E1 emphasizes that internalizing activities of distribution of sales would require substantial investment, logistical infrastructure and a strategic shift from B2B to B2C operations. Further, such FDI which may not be feasible without deeper market familiarity. This is aligned with the fact that equity-based modes are indeed linked to a resource commitment and higher risk (Erramilli & Rao, 1993: 20) Instead, the firm mitigates risk and accelerates market access by forming contractual relationships with experienced local actors, most often being distributors, who manage downstream activities. This strategy aligns with the literature on indirect exporting, which highlights its practicality despite limited control and learning opportunities (Buckley et al., 2018: 287; Yasar, 2013: 110). Yet, they manage to overcome barriers of foreignness through the network and utilize knowledge that would otherwise be hard and costly to get. Moreover, the Uppsala model can be used as a relevant framework for understanding the incremental expansion patterns identified in several cases. The gradual market entry process described by C1, including the initial phase of direct exporting followed by the establishment of TPL solutions that provide localized production and distribution, aligns with the idea of incremental internationalization through the acquisition of experiential knowledge (Johanson & Vahlne, 1977: 24-26). This case reflects a gradual internationalization approach as market knowledge accumulates. It further supports the theory that exporting is often adopted in the early stages of internationalization (Ahsan & Musteen, 2011: 377). Additionally, F1 and F2 adapt their entry strategies based on the size and complexity of the target market, as they establish local teams in larger markets while relying on wholesalers in smaller ones. However, they have not yet established any local teams in any of the EU 64 member states, leaving it uncertain whether this decision is driven by a lack of market knowledge or simply by the limited market size. 5.2.2 Non-traditional market entry: e-commerce serving as a loophole Moreover, the distribution activities of nicotine pouches are commonly carried out through the use of e-commerce. From the interviews, it is revealed that all of the respondents partner with e-commerce companies when having entered the EU common market, whereas one of the participants offers the perspective of operating as one themselves. Using e-commerce is argued by the respondents to offer the firms a broad market reach without having to establish local presence, which is in line with the literature of non-traditional entry modes (Brouthers et al., 2022: 2091; Nachum & Zaheer, 2005: 2). Research by Monaghan et al (2019: 12) and Hennart (2014: 117) infers that the global scope of e-commerce platforms enables firms to internationalize rapidly, sometimes unintentionally. All participants confirm the e-commerce platform to be an effective distribution channel with the ability to reach multiple countries simultaneously. E-commerce platforms increase the pace and the accessibility of nicotine pouches when being introduced in the market. Since regulatory institutions are known to evolve slowly in response to rapid changes, regulators struggle to regulate and maintain appropriate legal frameworks (Moura et al., 2021: 243-246). This creates the opportunity of regulatory arbitrage, where companies can avoid local legal restrictions, whether gaps or bans, by exploiting cross-border e-commerce channels. As highlighted by Brouthers et al. (2022: 2098), technology allows firms to conduct cross-border sales without having to adhere to certain legal obligations associated with local establishment. The empirical data supports this, by showing that participants acknowledge e-commerce as a strategic means to circumvent local legal barriers. For instance, A1 reveals that despite being a small company with only two employees, the company has reached customers in over 100 countries through e-commerce partnerships. Similarly, E1 claimed to have penetrated nearly all EU member states, including those with significant retail restrictions of nicotine pouches. Both A1 and E1 emphasized that market selection is managed by the e-commerce partner and once the product is delivered to the 65 platform, responsibility for its further distribution lies with the partner. As E1 noted, how the e-commerce company resells the product, is not the manufacturer’s responsibility. Thus, it is argued that e-commerce can be seen not only as a channel for rapid international expansion, but also as a strategic loophole for regulatory arbitrage enabling firms to overcome legal barriers that would otherwise hinder entry or growth in the EU market. As illustrated by Figure 3, the conceptual framework suggests that market entry barriers, stemming from the institutional environment, influences a firm's expansion strategies. However, empirical evidence indicates that the model falls short in accounting for how firms actually navigate or circumvent these barriers, overlooking the existence of alternative pathways. However, while acknowledging the effectiveness of e-commerce as highlighted by A1, some of respondents (B1, C1, F2) express a more restrictive approach in their usage of such services. F2 mentions that certain reputable e-commerce retailers negotiate market-specific agreements to comply with national regulations before selling their products, whereas others are described as less serious in this regard. This implies that some e-commerce companies might not adapt to local requirements. Furthermore, respondents B1 and F2 highlight that they prefer to work with such partners that are responsible in following national guidelines to ensure regulatory compliance. C1, as an e-commerce company, agrees on the importance of being as national as possible and adapts their website to specific regulations and requirements in each country. The respondent further notes that if a manufacturer does not want its product to be sold in a specific region, the e-commerce firm adheres to that decision. This statement appears somewhat contradictory to the earlier comments by A1 and E1, suggesting that the e-commerce partner retains full control over market selection, through their ability to decide where the products are available. However, it can be interpreted that, while manufacturers may express preferences, the e-commerce firm ultimately holds the majority of control over distribution decisions. The institutional theory mentions the role of mimetic isomorphism in uncertainties through firms imitating and adopting patterns of other successful players on the market (Kostova & Roth 2002: 66 216-217). Through the empirical data, there is a pattern in relation to all respondents using e-commerce, that could be discussed as a form of mimetic practice as a part of their entry strategies. This pattern can be argued to reflect that firms imitate others that, under uncertainty, succeed through e-commerce to manage the regulatory landscape. By using e-commerce platforms, firms bypass regulatory constraints and facilitate international sales while minimizing risk exposure. This suggests that e-commerce offers a flexible entry point, particularly for smaller firms and when operating in unclear regulatory environments. 5.2.3 Key factors in market selection to overcome barriers Firstly, a factor for market choice that emerged from the interviews, shows that a regulated environment is a recurring key characteristic mentioned by the majority of respondents. Notably, respondents (B1, C1, D1, F1, F2) mentions that, in order to enter a market, nicotine pouches must be legally allowed and a regulatory framework must be in place. However, based on the previous interpretation that e-commerce firms in the end have the possibility to decide where to introduce the products, the firm can still reach an unregulated market or a market where the product might be banned. From the perspective of Kostova and Roth (2002: 216-217), this could be argued as a characteristic of coercive isomorphism. Coercive isomorphism is considered the most impactful pressure as firms must comply with the legal regulations (Rosenzweig & Singh, 1991: 348), it falls natural that this is considered a key factor for the firms. However, in both cases, respondents A1 and E1 state that they are not involved in the distribution process of where e-commerce platforms distribute their products. This further suggests that there is room for firms to bypass institutional pressures through such channels. On the contrary, the firm wants the market to be regulated in order to avoid uncertain markets and operate in regulatory clarity. This can be viewed as a desire and aim for a clear market allowing operating stability (Buckley et al., 2018: 137-139,141-142; Kostova & Roth, 2002: 215). Secondly, taxation and financial conditions are mentioned to be important for four of the respondents (B1, C1, E1, F1). Some of them (B1, C1), mention it in relation to wanting the product to be subject to 67 excise duty. This further strengthens their commitment to only entering regulated markets. Yet, E1 mentions this factor with the reasoning of not missing out on reclaiming taxes. It could be discussed whether the firm targets markets that do not pose excise duty only for the sake of reclaiming tax, avoiding responsibility to an extent. F1 mentions that pricing in the foreign country has to align with firms' overall pricing strategy, which could further be affected by taxation legislation. Thirdly, demand and market size is also mentioned as a key factor considered when entering a new market. It points to the theory of TCA that advocates the firm's practice of economizing (Sarstedt & Mooi, 2014: 1; Williamson, 1981: 550). All of the respondents clarify that their product aims to primarily target smokers, thus, this is a target group that preferably should be on the market. This key factor is highlighted by F2, elaborating that they continuously work with meeting the demand, for instance, through higher nicotine levels. Lastly, partnerships are also frequently brought up during the discussions with the respondents, emphasizing its relevance in market expansion. Particularly, it is highlighted as a key factory to create partnerships, such as with the intermediaries that can provide market knowledge. Hence, exporting becomes a suitable option for firms with limited international experience (Welch et al., 2007: 239-241). E1, F1 and F2 further emphasize the importance of choosing a reliable and experienced partner. Thus, engaging in relationships is advocated to assist the firms to overcome potential liability of foreignness (Zaheer, 1995: 341). 5.3 Outlook of the industry in the EU common market A major concern expressed by all respondents is the absence of, or variation in, regulation which is seen to create regulatory vacuums. These voids are believed by several respondents to increase the risk for enforcement of total bans rather than appropriate regulations (A1, B1, E1, F2). Similarly, the literature on TCA explains that high transaction costs, for example, cost associated with negotiating, increases with the level of uncertainty and may lead to inefficient markets (Williamson, 1981: 552-443); Hotho & Pedersen, 2012: 140; Meyer, 2001: 358). This may result in discouraging future investments in new markets with uncertain environments. Several respondents reveal that they 68 currently are refraining from entering these types of market until regulatory frameworks are put in place. The findings from the empirical data reveal an alignment that nicotine pouches represent an evolving and relatively novel product within the tobacco industry, which the firms believe should have a tailored regulatory approach. While firms express optimism about the eventual implementation of specific regulations for nicotine pouches, the product currently remains unregulated, with bans emerging in various countries. It suggests that policymakers may hold a more cautious or uncertain stance toward the product. As several respondents noted, a lack of awareness and familiarity concerning nicotine pouches may be contributing to delays in the development of the regulatory framework. Similarly, the literature describes that formal institutions often respond slowly to rapid changes, causing delayed action (Moura et al., 2021: 243-246). The respondents view the absence of clear and harmonized EU common regulations as a failure to adapt to a shift in the tobacco industry. According to Sauerland, for institutional reforms to be effective, they must align with informal norms and societal expectations (2015: 22-25). Several respondents highlight the Swedish regulatory model as a mature and socially accepted framework, which they believe promotes harm reduction and fosters stable market conditions. They suggest that a similar approach should be adopted and enforced by the EU. From the literature Moura et al. (2021: 243-246) describes that institutions gain legitimacy when they adapt to evolving societal and market needs. In line with this, all participants express support for including nicotine pouches in the upcoming third revision of the TPD, which is expected to offer harmonized regulations across the EU. Respondents A1, C1 and F2 see this development as a potential turning point that could not only improve public health outcomes but also reduce regulatory uncertainty. However, despite these expectations, a few respondents (F1, F2) remain skeptical about the EU’s ability to achieve full regulatory harmonization. They anticipate that national deviations will continue to exist between member states, both in terms of regulatory requirements and consumer preferences, which will continue to shape how firms operate across member states despite the directive being in place. 69 5.4 Revised conceptual model The conceptual model as previously compiled, illustrated in Figure 3, provided the foundation for interpreting the relationship between institutional environment and firms choice of entry mode into a new market. The model accounts for institutional barriers that may influence and shape entry strategies. Previously, there were two main barriers included in the conceptual model. However, the earlier model fails to fully capture other factors that may affect the market entry and how the firms respond to the institutional conditions. Additionally, it also neglects the distinction in institutional environments consisting of both formal and informal pressures that create different types of barriers that must be approached differently. This insight is particularly evident in the empirical findings from the participants' experiences of responding differently to institutional pressures. Figure 4 illustrates how institutional environments influence firms’ market expansion strategies, focusing on the barriers to market entry and how firms may navigate them. Kostova and Roth (2002: 215) argue that institutional theory provides a valuable lens for understanding how firms interact with their business environments, emphasizing that institutional structures significantly influence organizational strategies and practices. The institutional environment, as illustrated in Figure 4, comprises both formal and informal institutions, which in turn create corresponding formal and informal conditions to market entry. These conditions influence firms' ability to expand into new markets and can contribute either to uncertainty or stability within the institutional context in which the business operates. Further, Hotho and Pedersen (2012: 1409) and Meyer (2001: 358) describe the conditions that a strong versus a weak institution can create, subsequently affecting the institutional environment in which businesses operate in. Accordingly, the model incorporates the dynamic relationship between uncertainty and stability in response to both formal and informal institutions. When institutional environments become more stable, the level of uncertainty faced by firms decreases, enabling a clearer and more predictable environment. Vice versa, when institutions remain weak, they increase uncertainty and create instability for firms to operate in, ultimately influencing the firm's market expansion strategy. Figure 4 aims to illustrate what is not depicted in Figure 3, namely, 70 that firms can strategically leverage institutional conditions. For example, firms may bypass formal restrictions through regulatory arbitrage by exploiting gaps or inconsistencies in the regulatory environment, effectively using loopholes to facilitate market entry. Additionally, selectively entering only regulated markets to avoid uncertainty represents another way to take advantage of differences in regulatory frameworks. Likewise, firms address informal conditions, formed by social and cultural pressures, through local adaptation to align with the specific-market demands and expectations. This extended interpretation of the model provides a more accurate representation of the actual entry process and can enhance understanding of firm behavior and strategy with regards to market expansion. Further, the revised model demonstrates how institutions affect entry, presenting a layer suggested by Oliver (1991: 145-146,173-175) and Suchman (1995: 577) to be that firms are not passive but actively seek ways to manage institutional conditions. Figure 4 Revised Conceptual Model (Figure compiled by the authors) 71 6. Conclusions This final chapter presents the conclusions drawn from the discussion and analysis of the empirical data and theoretical insights, aiming to address the research question of the study. It summarizes the key findings followed by outlining theoretical and practical implications and concludes with recommendations for future research and practices. 6.1 Conclusions This study has aimed to answer the following research question: How do nicotine pouch firms expand into the EU common market, characterized by an unharmonized regulatory landscape, and how do they navigate the challenges posed by the perceived harmful nature of the product? With the following sub-question: - What challenges do nicotine pouch firms currently face when expanding into the EU common market? - What are the key factors that help firms overcome these challenges? It is evident that there is an absence of and variation in legal frameworks regulating nicotine pouches in the EU common market. The empirical results reveal that this is an ongoing challenge met by constant variation and updates of regulatory requirements in the local market. Even though a stable regulatory framework is a key factor for firms when considering their market selection, a harmonised regulatory framework regarding nicotine pouches is perceived to remain in the future. This can be explained by theoretical literature that highlights how regulations evolve slowly in response to rapid changes in the environment. Some remain sceptical of the idea of a fully harmonised framework in the nicotine pouch industry in the EU common market, that will remove barriers derived from the formal institutional environment. 72 When responding to these institutional pressures firms utilize various measures which can be understood through the lens of institutional theory. Most firms confirm to the regulatory pressure and respond by only entering the market with an established regulated framework in place that allows them to operate with business clarity. Moreover, other firms take a selective or symbolic approach, partially confirming or avoiding the institutional pressures. An evident approach that firms practice is the monitoring of markets that are banned or unregulated, illustrating the firm not fully accepting nor resisting the institutional pressure. Partial compliance or avoidance to institutional pressures can also be seen in the use of e-commerce to access such markets. The empirical results present a way for firms to expand into markets that enable them to bypass regulatory barriers. Moreover, aligning and expanding on the theories of non-traditional market entry, empirical evidence demonstrates how rapid technological advancements pose new ways of expanding into markets. As institutional theory acknowledges the slow adaptability of formal institutions, this lag helps explain the resulting gaps in the institutional environment. Gaps in the institutional environment in the shape of regulatory bans and vacuums together with non-traditional ways of market entry create loopholes that firms leverage to facilitate market entry. Similarly to what is described in the literature, institutional barriers can take shape through informal pressures. Empirical findings align with theoretical understandings of social and cultural pressures affecting or challenging the firm's market expansion. Firms experience challenges in presenting the nicotine pouches in new markets, as cultural norms and consumer preferences vary across markets. Historical ties to cigarettes and the perception of alternative harm reducing-products to tobacco is culturally influenced by how nicotine pouches are perceived in the specific market. The empirical evidence shows that lack of awareness and understanding regarding nicotine pouches is a challenge that hinder the acceptance in the market, both for the firms and the policymakers. Local adaptation is perceived as a necessary aspect in order to effectively enter the EU market, thus firms adopt tailored strategies to meet local demands. This can consist of clearer consumer communication through labeling that aim to increase awareness and simultaneously improve product adoption. Additionally, tailoring product features like nicotine levels to regional preferences, limiting the access of the 73 product through age verification and investing in consumer education is perceived necessary to ensure responsible sales of nicotine pouches. Another approach that is adopted to manage informal institutional pressures is to influence the institutional environment. The findings reveal that larger firms may perform lobbying, communicating with policymakers in an effort to reshape or impact the institutional sphere. Consequently, this can be carried out with disregard for smaller firms that in turn disrupt their business operations. This suggests that small and large firms may experience the institutional environment differently in relation to market expansion, an aspect not fully captured in the institutional theory. The findings reveal that firms predominantly expand into the EU common markets using non-equity entry modes, particularly exporting. In line with theory, this can be explained due to its lower cost, risk and resource commitment, particularly in uncertain regulatory environments. Firms primarily export via intermediaries (e.g. distributors, wholesalers and retailers), enabling rapid market access while minimizing direct engagement and exposure. Additionally, some firms establish contractual arrangements, including distributor agreements, to access local knowledge and distribution networks. Furthermore, e-commerce plays a central role in how firms enter and expand within the EU common market. Viewing it from the theoretical lens of non-traditional entry mode, the strategy of e-commerce enables rapid internationalization without requiring physical presence or equity investment. It further allows firms to bypass or take advantage of certain legal and regulatory conditions. Some firms fully delegate market control to e-commerce platforms, while others emphasize the importance of selecting responsible partners and maintaining compliance. Ultimately, e-commerce offers both strategic flexibility and broad market reach, making it a preferred tool for navigating complex regulatory landscapes. Additionally, firms commonly use partners to grow in the EU market, benefiting from their local knowledge and networks without major resource commitments. Although less commonly used, equity modes appear less frequent due to their higher investment and risk, as well as the need for local market knowledge. However, PMI’s acquisition of Swedish Match has enabled substantial market access and production capacity, reflecting valuable resources for market expansion. 74 In conclusion, the findings reveal that nicotine pouch firms primarily expand into the EU common market through non-equity entry modes, such as exporting through e-commerce platforms and partnerships. Such modes offer flexibility when navigating an unharmonised regulatory landscape without committing to substantial investments in uncertain environments. The lack of harmonized legal frameworks, combined with cultural and social barriers, requires firms to adopt tailored strategies that vary in level of regulatory compliance. Moreover, some firms leverage e-commerce to engage in regulatory arbitrage to access markets indirectly, while others choose to fully or partially refrain from doing so, awaiting clearer regulatory framework. Ultimately, the complex interplay between formal and informal institutional pressures, combined with market-specific demands, leads firms to favor low-commitment entry strategies that facilitate responsiveness and reduced risk in an evolving regulatory context. 6.2 Theoretical and practical implications As previous research on institutional theory suggests, institutions pose substantial influence on the business environment. Existing literature presents the perspectives of Oliver (1991: 145-146, 173-175) and Suchman (1995: 577) which challenges the traditional view of firms as passive actors under institutional pressure. The findings contribute to this theoretical perspective by demonstrating that firms do play an active role in reshaping the institutional environment by actively navigating and influencing institutional contexts. Firms do not always conform to institutional demands and may adopt alternative strategies to meet these conditions. Empirical evidence identifies regulatory arbitrage and local adaptation as key strategies for firms dealing with potentially harmful products to successfully enter markets characterized by unharmonized regulations. Arbitrage illustrates how firms can deliberately capitalize on an expansion strategy in fragmented markets. This is reflected by firms entering regulatory unharmonized markets through e-commerce. Thus, the findings support and extend theories of non-traditional market entry by illustrating that rapid technological advancements facilitate the emergence of novel entry modes (Brouthers, 2022: 2091; Monaghan et al., 2019: 12). Institutional theory recognizes the slow response of formal institutions which explains the resulting 75 gaps in the institutional environment (Moura et al., 2021: 243-246). This study reveals that such gaps create loopholes that firms can exploit for market entry. The study offers practical implications for firms operating in environments characterised by unharmonized regulations and with products perceived as harmful. Firms can benefit from the insights of this study, which identifies barriers and key factors for successfully navigating complex contexts during market expansion. A valuable insight is the importance of understanding and adapting to both the variability and absence of regulation. It is suggested that, particularly when introducing a novel product that is perceived as harmful, firms must continuously monitor regulatory shifts to be equipped to manage the evolving institutional environment in order to succeed in their market expansion. Firms operating in uncertain regulatory environments should consider using non-equity modes of entry, as these approaches help minimize risk and reduce commitment (Hill, 2011: 474), making such modes a practical and effective entry strategy in such contexts. Additionally, tailoring strategies to fit local market conditions is essential for gaining acceptance of harm-reducing products like nicotine pouches. 6.3 Future research Contemporary research on institutions and entry modes has significantly contributed to addressing the aim of the study. However, future research can further develop these perspectives by focusing on company size and resources to compare their ability or capacity to respond to and influence institutional pressures. This can contribute not only to the understanding of firms as active actors, but also to capture the role of organizational resources in navigating complex markets. As the empirical findings involve six cases with Swedish firms, it could be valuable to include additional respondents as well as participants from other countries to gain deeper insights. A cross-country comparative study, would help address potential bias stemming from the Swedish context, where firms may benefit from historical ties with snus and nicotine pouches. Including cases from other countries with less familiarity of the product could provide valuable perspectives on 76 managing unfamiliar products. Expanding the geographical scope would enhance the external validity of the study and provide a broader understanding of how firms globally navigate unharmonized regulations when introducing a product that is perceived as harmful by the market. Lastly, a longitudinal study analyzing the consequences of regulatory harmonization efforts, such as the revision of the TPD mentioned by the respondents, could further provide valuable insights. This comparison would reveal how these changes affect firms' strategies, institutional dynamics and market access over time. This type of study would provide a more dynamic understanding of institutional and entry mode theory. 77 References Adeoye-Olatunde, O. A., & Olenik, N. L. (2021). Research and scholarly methods: Semi-structured interviews. Journal of the American College of Clinical Pharmacy, 4, 1358-1367. https://doi.org/10.1002/jac5.1441 Ahsan, M., & Musteen, M. (2011). 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Challenges in the EU Market (Topic 1) ● Experiences with introducing nicotine pouches in various EU markets ● Differences in acceptance and regulation of the product across EU countries ○ How you manage these differences ● Perceived regulatory trends in Europe concerning nicotine products ● Thoughts on a potential EU initiative for regulatory harmonization 3. Entering a new market (Topic 2) ● Your approach to expanding into new EU markets ● Criteria and considerations when selecting new markets for expansion ● Possible challenges and how they affect the firms market entry strategies ● Collaboration with intermediaries (manufacturers) ● Collaboration with manufacturers (retailers) 4. Future expectations (Topic 3) ● Expectations and preparations for potential EU-wide regulation of nicotine pouches ● Assessment of future growth potential in the EU market 5. Additional comments ● Opportunity to raise other reflections or aspects not covered above, but which you consider relevant to the topic 91 List of firms 1. StingFree AB - Founder, Bengt Wiberg 2. Swedish Match as an affiliate to Philip Morris International - Manager of External Affairs in Sweden & Iceland, Mathilda Stenman 3. Haypp Group - Head of Legal and External Affairs, Markus Lindblad 4. Company X 5. Kapz - Inventor of Nicotine Pouches and Founder, Thomas Ericsson 6. VONT - CEO, Admond Shlimon & COO, Ramin Warda 92