Internationalization and SMEs choice of direct export strategies and firm performance - Case study approach

Abstract

In this research, we have, through the case study method, looked at differences in social mechanisms, including relationships, networks, trust, commitment, learning, and knowledge, in addition to firm performance. The differences are looked up against the direct export strategies our case firm Drytech uses, distributor, and direct to-retailer. Further, we have examined the advantages and disadvantages of the social mechanisms and firm performance within the strategies.

Our findings found several differences within each variable when comparing the export strategies, which created the foundation to discuss each variable. Our discussion examined the advantages and disadvantages of all the variables within the social mechanisms and regarding firm performance. Our findings and discussion highlight the importance of relationships and networks when using both strategies. The degree of strength in the relationship and networks, we found to determine the achievability for information sharing and knowledge, trust, and commitment, especially when using a direct-to-retailer strategy, due to fewer expectations within the relationships. Using a direct-to-retailer strategy was more resource demanding due to the many contact points compared to a distributor in a given market with one contact point. For firm performance, we found profit and margins, in addition to sales growth, to be the main factors influencing firm performance when using the different export strategies.

This thesis used qualitative methods as the research strategy and a single case study as a research design. Semi-structured interviews were conducted with four subjects from Drytech who have worked with their internationalization since the start using appropriate samples based on the information power model. The semi-structured interviews were formed with the help of an extensive literature review resulting in a theoretical framework. The four subjects included two subjects from sales and marketing, one business developer, and the CEO. Furthermore, we conducted observation both direct and by participating in meetings and at an exhibition in Germany. The empirical evidence was strengthened with secondary sources like websites, meeting notes, and strategy documents resulting in a chain of evidence.