The role of networks in a Swedish medium-sized pharmaceutical firm’s internationalization process

Abstract

Today pharmaceuticals are the fifth largest export product in Sweden, whereas SMEs are the motor of innovation within the pharmaceutical industry. Pharmaceutical firms face several challenges, as high product development costs, high entry barriers due to institutional legal frameworks and slow return of investments, during their internationalization. However, internationalization is important for SMEs survival, whereas good relations to a network strengthen their network position and ability to internationalize. But how does a medium-sized pharmaceutical firm utilize their networks when they internationalize? The aim of the thesis was to gain an understanding how a Swedish medium-sized pharmaceutical firm utilize its networks when they enter foreign markets. To answer this, the business network internationalization process model by Johanson and Vahlne (2009) was used. How networks are utilized during the internationalization process is divided into two stages; before and after entering a foreign market. To fulfil the aim of the thesis, a single case study of a medium- sized pharmaceutical firm was conducted, with a qualitative method where eight people were interviewed to answer questions of how they utilize their networks during their internationalization process. In-depth semi-structured and face-to-face interviews contributed to a deeper understanding of the case company’s foreign market entry in all units of the business, thus an overall nuanced picture of the expansion decisions. The conclusion was that the case company utilize their networks differently through different phases, hence the use is largest before foreign market entry. In this stage, they use their network to gain knowledge about the foreign market and to find potential partners. In the after stage they utilize their network (i.e. business partners) to manage their local activities and to utilize their partner’s or middlemen’s network relations to strengthen their own position within the market and within the network.