Made in Sweden, again? Factors influencing the decision to de-internationalise manufacturing production in medium sized Swedish firms

Abstract

Twenty years ago, the trend amongst Swedish companies was to move their manufacturing production to low-cost labour countries, whilst in recent years there is a growing trend towards taking home manufacturing from abroad. The phenomenon occurring is referred to as de-internationalisation and is the reverse of internationalisation, which is a widely covered field. However, there are not many studies made in the de-internationalisation area, which was the aim of the thesis; to shed light over an important shift that is occurring. The thesis was conducted through a qualitative case study of four medium sized Swedish companies. Interviews were carried out among the companies to study the reasons behind their partial de-internationalisation of manufacturing production. By using the Uppsala Model, Eclectic Paradigm and a conceptual framework by Benito and Welch the purpose was to recognize the main factors influencing the decision to why firm de-internationalise. The results showed that a combination of external and internal factors affected the decision. However, the internal factors showed to be more influential than external ones. Common denominators were identified for the four companies; from those the conclusion drawn is that there is a growing importance for companies to have control over the whole production chain. When achieving this, it leads to several advantages for e.g. quality control, shorter lead times, lower transport costs and economies of scale. Considering the external factors it was concluded that home networks was of great importance when companies decided to de-internationalise manufacturing production. Absence of these networks would have obstructed the process considering start up costs, hard to access knowledge of the market, competition and available competence. The result of this thesis is a first step towards the understanding of why firms de-internationalise.