Adapting without retreating : Swedish and German SMEs in an uncertain U.S. market

Sammanfattning

Rising geoeconomic fragmentation — driven by trade tensions, tariff policies, and the strategic use of economic instruments for geopolitical purposes — is reshaping international business conditions. While research has examined how large multinationals respond to these developments, the implications for SMEs remain underexplored. This thesis examines how Swedish and German SMEs respond strategically to geoeconomic uncertainty in the U.S. market. Using an interpretivist, qualitative multiple case study design, empirical data were collected through semi-structured interviews conducted in spring 2026 across seven companies with direct or advisory U.S. market exposure and analyzed through inductive thematic analysis. The central finding is that SMEs respond through continuity-preserving adaptation rather than retreat. Despite describing the U.S. environment in stark terms, no firm reported considering withdrawal. Instead, firms preserved market commitment while protecting flexibility through multiple supplier relationships, distributor-based servicing, deepened local partnerships, and collective industry engagement. Variation between firms was better explained by industry exposure and managerial interpretation of whether uncertainty is temporary or structural than by Swedish or German institutional context — contrary to the expectations of the varieties of capitalism framework. The study contributes to research on geoeconomic risk, SME internationalization, real options theory, and the Uppsala model by showing that local embeddedness functions as a capability substitute, that reactivity can represent rational option-preservation, and that managerial cognition mediates between perceived uncertainty and strategic response.