eThesis - School of Business electronic theses

The role SMEs have in economic welfare and global competitiveness is increasingly emphasized throughout nations. Due to globalization, SMEs have now opportunities to internationalize but also pressure to internationalize in order to survive. Academic studies are increasingly interested in the dynamics of internationalization of SMEs in addition to multinational conglomerates.

The objective of this study was to explore an established, middle-sized company in their starting point in internationalization. The focus was in the internationalization process in relation to organizational capabilities that the company already has and is about to gain and how these meet. The thesis explored late internationalization from SME perspective; how capabilities are developed through internationalization process, what is the decision-making behavior behind internationalization and how the process is structured and conducted.

The study was based on theoretical frameworks on internationalization that differ in their epistemological assumptions; economic-based, process-based and evolutionary based theoretical approaches to internationalization were explored to answer three strategic question: why and what to internationalize. The concept of dynamic capability development was explored in more detail in order to find answers to how to internationalize. In addition the special characteristics of SMEs and new ventures were reflected.

Based on the research, a correlation to the theoretical canvas can be found from the empirical material. The case company uses all approaches in explaining its strategy of internationalization. While being at the start of the path; the development of capabilities is in progress but not all development areas can be yet identified. However, it can be concluded that capability development is situational; even if a company has established practices and capabilities, internationalization process is a great development effort with a certain level of uncertainty and high risk, thus it is approached in an iterative, emerging manner.