BARRIERS TO INTERNATIONALIZATION FOR FINNISH COMPANIES (Case study: Sweden vs. Nigeria) (MANAGEMENT PROJECT TOPICS AND MATERIALS)
Internationalization is an increasingly current topic in the area of business. Companies have increasing needs to go abroad in order to stay competitive, yet many Finnish companies have not taken this step. Out of those that have taken this action, many stay within the EU and Sweden for example. What are the reasons that Finnish companies do not explore the developing markets more? For example Nigeria is a growing market with plenty of opportunities.
There are several internationalization theories that attempt to explain the process and the reasons and considerations in the process. The Uppsala model suggests that companies tend to first explore the nearby markets and as the internationalization deepens, the company may then explore the further markets. The network theory states that companies are reliant on other companies’ resources and thus need to engage in networks. As the network expands, the company may internationalize to the markets that the network has connections to. Then again, the resource based view states that companies should first look for a promising market and then see how to use their resources to exploit it, instead of the opposite. Lastly, the non-availability and availability approach states that a country should import the goods that are not readily available in the country and exports those goods that are present in abundance.
Nigeria is a challenging market with various development issues at hand. Nevertheless, it is a booming consumer market with rapid economic growth providing plenty of opportunities in several sectors including construction, health care, education, agriculture etc. Sweden on the other hand is a well-developed and organized market with slow economic growth. Nevertheless, there are several lucrative markets due to the aging population and the electronic dependence. Such sectors include cyber security, e-health and green construction, automotive and power sectors.
The data collection was challenging due to the lack of commitment from the companies as well as the amount of potential companies that could be used for the study. The data collection form of structured email interviews was finally chosen due to the failure to engage companies in face to face interviews. The data limitations included the amount of collected data, interviewer as a collection instrument, the interview questions as well as the quality of the data collected. The most interesting findings were the lack of engagement from companies to consults expert services when considering internationalization as well as the underestimation of cultural barriers as challenges in the internationalization process.For further investigation and research the controlling of variables is recommended e.g. using companies that are directly comparable in sector. Also the research design could use more closed questions.
Internationalization, Nigeria, Sweden, Barriers