Trading in Turbulence : How do Swedish Companies Adjust their Internationalization Strategies in Response to Geopolitical Fragmentation?

Sammanfattning

Geopolitical fragmentation is creating an unparalleled rapidity of change in the international business environment. Trade tensions, regional conflict and changes to global supply chains are causing all types of businesses (large or small) to rethink how they go about conducting international operations. For Swedish manufacturing Small to Medium Sized Enterprises (SMEs), this is doubly difficult as they rely almost entirely upon international trade and cross border networks, however these SMEs do not have the financial or personnel resources to adequately assess or mitigate geopolitical risk. This research examines how Swedish manufacturing SMEs adapt their internationalisation strategies in reaction to geopolitical fragmentation. A qualitative multiple case study design employed semi structured interviews with Managers and Executives at five Swedish manufacturing SMEs. Empirical data from the interview process was examined using both within-case and cross-case examination in reference to four established theoretical frameworks; the Uppsala Internationalization Model, the Network Model, the Resource-Based View and the Dynamic Capabilities framework. The results of this research demonstrate that the manner in which Swedish manufacturing SMEs react to geopolitical fragmentation varies significantly based on the level of international exposure that each individual company has, the configuration of its supply chain(s), and its own internal resource base. Companies with higher levels of international exposure had to undertake major structural strategic adjustment due to the increased political uncertainty, whereas companies that were geographically confined were able to continue employing existing strategies with minor incremental adjustments. Additionally one company viewed geopolitical fragmentation solely as a positive opportunity. Overall, this research demonstrates that the impact of geopolitical fragmentation is causing the internationalisation strategies of Swedish Manufacturing SMEs to shift away from a pure focus on operational efficiency towards a more regionalised and resilient supply chain and strategically flexible approach.