Exploring nearshoring opportunities in a low-cost country : a case study of nearshoring between Sweden and Morocco

Abstract: The purpose of this study is to explore possibilities for textile companies in European high-cost countries to relocate production to low-cost countries in North Africa by performing a case study on Sweden and Morocco. The study will thereby contribute to increased understanding of nearshoring opportunities in low-cost countries. Sweden is seen as an example of a European high-cost country and Morocco is seen as an example of a North African low-cost country. By investigating nearshoring from a European high-cost country to a North African low-cost country, the authors conclude the advantages and disadvantages of nearshoring. Through a case study with a qualitative approach, observations and semi-structured interviews with industry professionals were conducted. The interviews were designed to investigate the advantages and disadvantages of relocation of production from both the production country perspective and from the outsourcing country perspective. The authors identified disadvantages that include increased labor and production costs, financial assistance for environmental standards, human rights issues and bad supplier relationships. Despite challenges, nearshoring offers advantages like increased flexibility and potential sustainable development, enhancing brand image and potentially increasing revenue. The findings emphasize the need for future research on differentiating nearshoring from traditional offshoring, assessing the environmental implications of various sourcing locations, and exploring the supplier-customer relationship for successful nearshoring implementation.