| Summary: | This master of economics paper discuss that the globalization has lead to increasing internationalization among small Swedish IT- companies in the service sector. Sweden has a long history of foreign trade but in the beginning of the industrialization only large companies that produced goods answered for the foreign trade. Before, the Swedish companies begun their operations abroad in fairly nearby markets and only gradually penetrated far-flung countries. Now this is no longer possible. When small companies nowadays seek growth in other countries there is no time internationalize with the same approaches as before, especially when the company offers a service. Services have special characteristics that must be considered while developing establishments plan for the foreign market. Our question at issue is: Which factors are relevant for small Swedish IT companies in the service sector while establishing in foreign markets? And the aim of the investigation is: To map out, analyze and give recommendations for possible approaches when a small Swedish IT- company in the service sector wants to establish in the Spanish market. (The investigation is made for a specific small Swedish IT-company in the service sector that is planning an establishment in Spain. This company is called the case study company.) From the theoretical part, where relevant theories were presented, we picked out the most suitable theories and variables for our investigation. These were; barriers and factors that influence the choice of entry mode, network theories, acquisition, greenfield investment, licensing, franchising, joint ventures and strategic alliances. Furthermore we choose two new establishment theories; offer a generally superior product/service and launch a new marketing innovation. On the basis of these relevant theories, a frame of reference was developed. The whole investigation was based on this frame of reference. The investigation is a case study. We have used the following methods for collecting data; participation study, literature study, interviews and questionnaires. The investigation was made in two different phases. The first phase consisted of the literature study and the questionnaire, the main purpose of this phase was to distinguish external barriers and factors on the Spanish market that are relevant to consider while developing the establishment plan. Phase two consist of interviews with the Swedish trade company but also with other small IT-companies in the service sector that are established in foreign markets. The main purpose with this phase is to get information about all that considerers the establishment of small IT-companies in the service sector, this includes barriers, factors and possible approaches. During these two phases a participation study took place in the case study company. This study gave us information about the culture, structure and way of working in the case study company. We could from this information distinguish internal barriers and factors. The collected data and information is presented in the empirical part. It is furthermore compared and analyzed with the frame of reference. This led to the result that answers the aim of the investigation. The result consists of recommendations to the case study company such as that they have to develop their business plan, but also consider internal and external barriers and factors, for an example their resources and the demand on the Spanish market. The best approach when establishing in Spain is internal development. This means that a local office is established on the foreign market, here should, preferably, local inhabitants work that knows the language and the social and cultural life. The optimum is if this person can start its work in Sweden at the office of the case study company. The reason for this is to integrate the new staff into the company and its culture. Starting a local office gives the case study company a possibility to control and coordinate their internal activities, which are essentials parts of the development of their international business plan. The result of the investigation shows that it is necessary with a well thought-out establishment plan for how the company should proceed when going to foreign markets. This plan has to be adjusted to the branch of trade, the company, the service and the foreign market on matter. Each company has unique characteristics that affect the formulation of the establishment plan. However it is also possible to see similarities between a certain type of company or branch of trade, as within the group, small Swedish IT companies in the service sector.
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