Offshoring: Drivers and Factors in Swedish Manufacturing Companies

Abstract: The purpose of this study is to increase understanding about critical factors Swedish manufacturing companies need to consider when offshoring. The study is based on two research questions. The first question is to investigate and understand why Swedish manufacturing companies offshore their facilities. The second research question aims to understand the critical factors companies need to consider when moving abroad. Case study and semi-structured interviews were used to collect data. These case studies took place in seven different Swedish manufacturing companies which have offshored their facilities outside of Sweden. A cross-case analysis is done in order compare all seven companies with factors they considered when moving abroad.  Then, this cross-case analysis is compared with the literature review. Comparing theoretical and empirical data results in finding the gap. The findings imply that most of the Swedish manufacturing companies moved abroad because of cost reasons. The most reasonable choice for companies in order to be more competitive was to move abroad. According to the literature is cost saving the biggest driver why companies decide to offshore their facilities. Furthermore, in order to have a successful offshoring it is important to consider several factors. Factors that have been considered by seven Swedish manufacturing companies differ but the main factors all seven companies considered before moving abroad are work competence, cost of production and lead time. Finally, the study provided valuable insight on real elements considered by Swedish companies when offshoring and which contributed with findings that compare and understand the relation between theoretical and empirical factors. The study results could be used as base for further investigations, especially in the gaps in theoretical review.