The Internationalization Process of SMEs : A Comparative Study between Pakistani and Swedish SMEs.

Abstract: This master dissertation focuses on the challenges and strategies for SMEs in the internationalization process. Particularly it focuses on perceived challenges from resource-based view. In order to describe the challenges, the study focuses on those resources that SMEs needed in the initial stage of the internationalization process. Resources further categorized into two types, tangible and intangible resources. In our study we use two internationalization models, to analyze the different stages and for better understanding of the internationalization process with respect to challenges and strategies. Challenges faced by SMEs when starting their internationalization process are different in developed and developing countries. In developing countries like Pakistan, SMEs face challenges due to the less educated managerial staff for strategic formation and external support for internationalization process. However, in developed countries like Sweden, SMEs face challenges due to low incentives for internationalization and high bank interest rate. Further, the growth of SMEs in any country also depends upon the availability of resources and support of external organizations. SMEs are not big enough like large organizations, nor do they have enough resources to survive in the international market. In developing countries, SMEs face more challenges because of less availability of resources and external support for their internationalization process. At the initial stage of the internalization process, SMEs in Pakistan need more financial resources to make investment in capital-intensive projects and educated management for strategic formation. In Sweden, SMEs in the initial stage require financial resources on low interest rates and guidance to find representatives in the international market. The external organizations in both markets should support SMEs to meet challenges in their internationalization process.