Motives for offshoring : A qualitative case study of three Swedish companies

Abstract: This thesis will analyze what companies main motives have been regarding their decision to offshore; either their whole production or only parts of it. The emphasis will be put on the following motives: enter new markets, cost-efficiency and closeness to markets, since they are the most commonly used in the literature. To be able to answer our purpose we have chosen to use a qualitative method by interviewing three companies within Jönköpings County, namely; Becker-Acroma, Sapa Profiles AB and Nefab. The basic structure of the world economic map consisted of a core and a periphery, where the raw materials were provided by the periphery to the core, which in turn produced the final consumption goods. However, trade patterns have changed and the international structure of today’s business environment combined with advanced communication systems has created an environment where offshore markets have become more accessible. After conducting the qualitative research, we have seen that the motive for offshoring differs in the long- and short run. A general pattern is evident in the short run as the interviewed companies have offshored, in order to follow their customers as they have moved their production abroad. The reason why companies follow their customer is in order to supply them more efficiently at the foreign market, rather than exporting the goods from Sweden. However, in the long run cost-efficiency becomes more important for a company, since the investigated companies will not stay in a market that does not generate any profit.