Foreign operation mode strategies of SMEs in emerging markets : the case of Finnish sawmill equipment providers in Russia

Abstract

The purpose of this study was to examine foreign operation mode strategies utilized by SMEs in emerging markets. More specifically, it was also essential to understand the factors affecting foreign operations mode strategies, as well as how SMEs switched, stretched, and combined these modes. These issues were empirically addressed in the context of Finnish sawmill equipment providers entering the Russian market was considered. The research was based on a qualitative multiple case study approach in order to get a sufficient understanding of the strategic decision of Finnish sawmill equipment providers related to their foreign operation mode strategies, as well as to outline the critical aspects of the Russian business environment they were entering. Three Finnish sawmill equipment companies and the Finnish-Russian Chamber of Commerce was considered.

The key findings of the research indicated that SMEs utilized exporting as initial foreign operation mode which did not switch, stretch, or combine with other types of foreign operation modes. The key factors affecting SMEs' strategies were resources, the potential of an industry, political & legal factors, business environment, geographical location, cultural context, and controllability over the selected foreign operation mode strategy.