Leveraging Sustainability as a Strategic Capability : How Swedish Firms Enter and Compete in the U.S. Market

Sammanfattning

This study examines how Swedish firms both startups and established, leverage sustainability as a strategic capability when entering and operating within the United States market under volatile trade conditions, regulatory uncertainty and increasing stakeholder expectations. The focus of this research is on how sustainability influences competitiveness and market entry strategies of Swedish firms in the U.S. market. While sustainability is often discussed in international business literature as a compliance issue, this study explores a broader strategic role in helping firms navigate tariff related barriers, institutional pressures and price sensitivity market conditions.The study adopts a research approach based on semi-structured interviews with representatives from Swedish firms operating in different industries. The empirical findings of the study are complemented with ESG reports, annual reports and secondary company data. Thematic analysis was used to identify recurring patterns relating to sustainability capabilities, market entry strategies, legitimacy creation and resilience in volatile international environments.The findings reveal that Swedish firms use sustainability as a multidimensional strategic capability rather as a stand alone environmental or ethical obligation. Five major sustainability capabilities emerged from the empirical analysis; integrated strategic resources, operational competencies, innovation mechanisms, legitimacy building and resilience enhancement. These capabilities support in improving operational efficiency, strengthening stakeholder trust, differentiating products and services, adapting supply chains and responding to regulatory and market uncertainties in the U.S. market. The findings further demonstrate that sustainability capabilities contribute to competitive positioning and long term relationship building, especially when aligned with customer value creation and operational performance.Moreover, the study also identifies significant tensions between sustainability ambitions and commercial realities of the U.S. market. While government regulation and institutional pressures increasingly favor sustainable business practice, customers in several industries remain highly price sensitive often leading to customers prioritizing cost and performance over sustainability attributes. As a result, firms need to balance sustainability investments against market competitiveness and customers' willingness to accept the price. The study also highlights the importance of networks, local partnerships and strategic flexibility in overcoming liability of foreignness and navigating volatile trade environments.The study contributes to international business and sustainability literature by integrating perspectives from the Resource-Based View, Institutional Theory and Stakeholder Theory to explain how sustainability functions simultaneously as an internal strategic capability and an external mechanism. The research further extends sustainability literature by demonstrating how sustainability capabilities can support resilience and strategic adaptation under conditions of geopolitical uncertainty and changing trade policies. Overall, the thesis argues that sustainability has evolved beyond compliance and now serves as part of strategic tools for Swedish firms seeking competitiveness and long term success in the U.S. market