eThesis - School of Business electronic theses

» hse_ethesis_13805.pdf   size:2 MB (1999469)

Even though climate change mitigation in developing countries is a well-recognized need, it is not easy for Finnish renewable energy companies to gain access to the markets. Small and medium sized enterprises (SMEs) that aim to bring their renewable energy products to African markets, face a variety of different challenges. This thesis examines and categorizes some of those challenges as well introduces suggestions on what could be done to overcome them. The literary review of this thesis examines three themes: African markets, SME internationalization and renewable energy. Networking was found to be an important element of all the theoretical paradigms and thus became the fourth, underlying, theme for the study. A framework of challenges was further derived from the literature review. In this framework, the challenges were divided into internal and external ones. The current paradigm suggests that external challenges are more influential into the internationalization process of renewable energy SMEs to Africa. The empirical part of the study suggests that the challenges experienced in Finland are in accordance to those presented in global literature. The most pressing issues seem to be related to financing and networking. Networking is used by SMEs to tackle the challenges arising from their limited resources. Finnish companies saw challenges in both, domestic and target markets. The domestic need was to find a suitable SME or large company to partner with in order to share the risk of internationalization. The target markets seemed to offer high risk and low quality partnerships and required presence on the market to work well. Governmental organizations were seen to have a large role in enabling the SMEs to grow. Governmental organizations should perform both, supporter and regulator tasks successfully in order to help SMEs to tackle the challenges of internationalization. The SMEs suggested that governmental support tools would focus less on information providing and sharing and more towards direct contacting of customers. Because of the limited resources of the SMEs, they need to turn business operations into profits quite quickly. This has been a major hindrance in, for example, connecting with non-market actors. Even though development aid organizations and NGOs might contribute to an easier market entry, SMEs didn't want to spend too much time on creating and nurturing this relationship when the paybacks are uncertain.