Entry strategy for SMEs in the Russian market -Focus on challenges, entry modes and network relations.

Abstract: Russia’s economy is growing at a very fast pace and it has an enormous potential for the international enterprises. Although Russian market has a huge potential for international enterprises but at the same time it has challenges and pitfalls that need to be addressed before getting into the Russian market. Often international enterprises fail in Russia due to the reason that they are not fully aware of the challenges and difficulties of the market. Entry mode of SMEs is affected by the challenges and pitfalls of the Russian market and network relationships play vital role for the success of SMEs in the Russian market.   The aim of the thesis is to identify the main challenges of the Russian market that international SMEs can face while entering the Russian market and also how SMEs can choose a specific entry mode while taking into consideration the challenges that Russian market poses to international enterprises. Thesis also deals with the importance of network relationships and how SMEs can take benefit of the network relationships in order to serve the market better.   Empirical data has been collected by conducting interviews with representatives of different Swedish SMEs that are operating already in the Russian market. After the empirical analysis, the challenges of the Russian market are stated that were experienced by the interviewees. Common mode of Swedish SMEs based on the interviews is stated and it is also stated that how Swedish SMEs establish and maintain relationships with Russian counter parts.   This thesis will be helpful for the SMEs that are going to enter in Russia; to identify the key successful factors of the internationalization in Russia through a theoretical background, and cases of Swedish SMEs competing there. Moreover, the present study could also be of great interest for the Russian authorities that try to improve the business environment in Russia as it shows the perceptions of international enterprises on challenges of the Russian market.