Fulltext02 PDF

BACHELOR THESIS
Factors influencing export performance

A study of Swedish companies exporting to Russia
Viktoria Sorokina
Bachelor of Science in Business and Economics

Business Administration
Luleå University of Technology

Department of Business Administration, Technology and Social Sciences

ACKNOWLEDGEMENT
I want to thank Jörgen Persson at Part AB and Ann‐Christin Sundström at Liko AB, who took time and
contributed with their ideas, knowledge and experience for this research, which made it possible. In
particular I would like to thank my supervisor Maria Ek Styvén for her support, encouragement and
valuable guidelines throughout the whole thesis writing process. I thank Erik Hagenrud at the Swedish
Trade Council as well, who provided with information about available Swedish companies in Norrbotten.

The 29th of May 2012
_______________ Viktoria Sorokina

ABSTRACT
The focus of this thesis is different factors that can influence Swedish companies’ export performance to
the Russian market. The research is done by applying qualitative approach, where two interviews will be
conducted. Conclusions that have been made in this research can give some guidelines for the Swedish
companies that already export or consider starting their business activity in Russia. A number of
previous researches about successful export and obstacles for it have been studied, as a ground for this
thesis. The empirical information, obtained for this study, confirmed or rejected some of previous
conclusions. Within the present research the following findings about impact of internal and external
factors were made, such aspect, as firm size, does not impact on company’s possibility to export.
However, it is important for a company to have international competence, export experience and a local
business network on a foreign market. Managerial characteristics and social networks appeared to be
important for successful export as well. On the side, external factors of the Russian market, like political,
economic, socio‐cultural and technological ones as a whole were not experienced as obstacles for
export. Still, some factors within them, like bureaucracy and language were experienced as barriers.
However, Russian market is seen as an attractive one and two Swedish companies that contributed with
information to this thesis want to continue their business towards Russia.

SAMMANFATTNING
Denna uppsats fokuserar på olika faktorer, som kan påverka svenska företags exportresultat till den
ryska marknaden. I detta forskningsarbete tillämpas kvalitativ ansats, där två intervjuer kommer att
genomföras . De slutsatser som gjorts i detta forskningsarbete kan komma att ge några riktlinjer för
svenska företag, som redan exporterar eller planerar starta sin affärsverksamhet gentemot Ryssland. Ett
antal tidigare studier om framgångsrik export och hinder för detta har studerats, som grund för den här
uppsatsen. Gjorda slutsatser om påverkan av interna och externa faktorer är att en sådan aspekt som
företags storlek inte påverkar företags möjlighet att exportera. Dock, är det viktigt för ett företag att ha
internationell kompetens, export erfarenhet och lokalt affärsnätverk på den utländska marknaden.
Chefers egenskaper och sociala nätverk visade sig också vara viktiga för framgångsrikt exportresultat. Å
andra sidan, externa faktorer på den ryska marknaden, som politiska, ekonomiska, sociala och kulturella
upplevdes inte som barriärer för export. Dock finns det några faktorer bland dem som upplevdes som
hinder, nämligen byråkrati och språk.
Emellertid betraktas den ryska marknaden som attraktiv och de två företag som bidrog med information
till uppsatsen vill gärna fortsätta sin verksamhet gentemot Ryssland.

Table of content

1 Introduction ..........................................................................................................................................1
1.1 Background ..................................................................................................................................1
1.2 Problem discussion ......................................................................................................................2
1.3 Purpose and research questions .................................................................................................2
1.3.1 Definition .................................................................................................................................2
1.3.2 Delimitation .............................................................................................................................3
2 Literature review...................................................................................................................................4
2.1 Introduction .................................................................................................................................4
2.2 Internal factors ............................................................................................................................4
2.2.1 Organizational level.................................................................................................................4
2.2.2 Managerial level ......................................................................................................................7
2.3 External factors............................................................................................................................9
2.3.1 Political environment ..............................................................................................................9
2.3.2 Economical environment.......................................................................................................11
2.3.3 Social and cultural environment ...........................................................................................12
2.3.4 Technological environment...................................................................................................13
2.4 Frame of reference ....................................................................................................................14
3 Methodology.......................................................................................................................................16
3.1 Research approach ....................................................................................................................16
3.2 Research strategy ......................................................................................................................16
3.3 Literature search........................................................................................................................17
3.4 Data collection methods............................................................................................................17
3.5 Sample selection ........................................................................................................................18
3.6 Data analysis ..............................................................................................................................19
3.7 Quality of data ...........................................................................................................................19
3.7.1 Validity...................................................................................................................................19
3.7.2 Reliability ...............................................................................................................................20
4 Empirical data......................................................................................................................................21
4.1 PART AB .....................................................................................................................................21
4.1.1 Company information ...........................................................................................................21
4.1.2 Internal factors ......................................................................................................................22

4.1.3 External factors......................................................................................................................23
4.2 Liko AB .......................................................................................................................................25
4.2.1 Company information ...........................................................................................................25
5 Analysis................................................................................................................................................29
5.1 Within‐case analysis ..................................................................................................................29
5.1.1 PART AB .................................................................................................................................29
5.1.2 LIKO AB ..................................................................................................................................31
5.2 Cross‐case analysis.....................................................................................................................32
6 Conclusions and findings.....................................................................................................................35
6.1 Further research ........................................................................................................................36
6.2 Managerial implications ............................................................................................................36
REFERENCES ................................................................................................................................................38

List of figures

Figure 1. Influencing factors…………………………………………………………………………………………………..………………15

Table 1 Cross‐case analysis, success factors and obstacles for export……………………………………………………33

1 Introduction

1.1 Background
Nowadays international marketing gains more attention among all market actors, whether they are
companies, consumers or even country’s economy. This can be explained by eliminated restrictions and
more free relations between nations contributing to free commercial exchange (Albaum and Duerr,
2008). To be successful on the international market requires additional experience and knowledge in
marketing strategies. A firm, going abroad, must be aware of that application of only basic principles of
marketing is not enough. To every foreign market these rules shall be adjusted and applied in
accordance to the local context (Czinkota and Ronkainen, 2010).
Nowadays, when competition between companies is high, it is quite obvious to suppose that developing
companies want to expand their business activity, which often implies entering foreign markets. This
process depends on a company’s local business environment and its core competency (Wild et al.,
2008). A firm can establish its activity abroad by using different entry modes, which are divided into
three groups, like exporting, importing and countertrade; contractual entry and investment entry (Wild
et al, 2008).
Wild et al (2008) name some reasons, why firms start to export. This can depend, for example, on a
company’s striving to increase sales, when its domestic market is saturated and a company wants to
introduce its production to the foreign markets. By applying this strategy, a company gets more profit
from selling abroad and it allows spreading costs among different producing units. The second reason, is
to diversify sales, low sales in one market can be compensated by better sales in other. The third reason,
according Wild et al (2008) is that by selling abroad, a company gets knowledge and skills for further
sales to foreign markets, if it has not had any previous export experience.
According to the Swedish Cabinet Office (2008), Russian market is considered to become one of the
largest among other economies after the global crisis. Its attractiveness can be explained by the
continued growth and increased industry production. Export council of Sweden has its representative
offices in Moscow and Saint‐ Petersburg, contributing to development of export and import relations
between two countries. In Russia there are about 400 Swedish companies. Bilateral trade relations are
kept on the same high level, but can be affected by process in the world economy. Next year after the
economic crisis export to Russia was reduced but increased 2010 and was estimated to 20,9 billion SEK
(Swedish Cabinet Office, 2008).
According to the administrative agency of Statistics Sweden (2011) in 2011 export to Russia increased by
33 percent while imports from the Russian market increased by 25 percent.
Export from Sweden to Russia includes high‐technology products, like machines and equipment,
products of chemical industry, cellulose and paper as well as products of metal industry. Import from
Russia consists mainly of oil (Swedish Cabinet Office, 2008).

1

1.2 Problem discussion
A company going abroad shall take into consideration different issues that can have great importance
for the company’s performance abroad. These issues regard mainly differences between home and host
country, whether they concern internal or external factors.
Domestic and market changes that have happened since Russia came in a new age in the 90s made the
country quite attractive in the international market. During recent years many western companies have
altered their attitudes towards the Russian market and consider establish their business in this country,
in spite of the risks that countries, with transition economies, such as Russia, imply (Fallon and Jones,
2004).
Still, not only a company’s macroenvironment will influence its selling performance abroad. Going
international, internal factors on the organizational level can also be significant for achieving success.
However, there are many challenges that foreign companies have to face when they decide to start
their business with Russian companies, or by their own. The research done by Fallon and Jones about UK
companies (2004), going to Russia, discovered some risks that they referred to different aspects within
economical, political issues as well as institutional and cultural challenges were discovered. According to
Wild et al (2008) instable political situation hinders overcome to a market economy in the country. As
well, there are worries how Russia will disposal nuclear weapons stockpiles. Even on the managerial
level changes are required (Wild et al, 2008).
Still, even if there are a lot of challenges of making business in Russia, more and more foreign companies
start export to the country. Many Swedish companies choose to establish business relations with the
Russian ones in different kinds of industries.
1.3 Purpose and research questions
The purpose of the present research is to get a deeper understanding of factors that can influence
Swedish companies’ export performance in the Russian market. These factors concern different aspects
which companies shall take into consideration so that to make export successful and avoid eventual
difficulties in the long run.
The subject of the study raises the following research questions:
1. What factors can contribute to successful export of Swedish companies’ products to Russia?
2. What factors can hinder Swedish companies’ export to Russia?
1.3.1 Definition
Aaby and Slater (1993, p.16) determine export performance as “rate of growth in export sales and
percentage of total sales accounted for by exports”.
According to Cavusgil and Kirpalani (1993) there is no certain definition of export success, however, they
point out 6 criterions that determine it, like considerable and stable increased export over 3‐year
2

period, considerable increased export volume to the total business after 3‐year period, level of export is
significantly higher than the average indicator in the studied company industry sector, large increase in
sales abroad during short period of time, “breakthrough” on a market with difficult conditions and the
highest level of export sales during a certain year. In the present research export success will be seen
from the managers’ point of view. Certain attention is paid to their perception about export process to
Russia, how it went, if it was really possible to implement it.
1.3.2 Delimitation
The research aims at studying Swedish companies, located in Norrbotten County. This choice seems to
be quite logical, since Norrbotten is a part of Barents region. Close geographical distance and
cooperation with Russian companies within Barents region creates good possibilities for export of
company’s products to Russia.
Another criterion for the studied companies is that they must produce products and not service. This
depends on that it is easier to find a company that exports products.

3

2 Literature review
Theoretical part of the research is relevant to its purpose and identifies internal and external factors,
influencing company, selling abroad. This part describes as well results of previous studies, regarding
impact of internal and external factors on a firm’s export performance as well as what factors contribute
to export success or are obstacles to it.
2.1 Introduction
A number of factors can influence a company’s export performance, whether it will be a successful
result or there are some hinders for that. A number of researches have been made to reveal what
factors contribute to export success or hinder it, in other words what factors can be determined as
barriers. It is quite obvious to suppose that different companies accommodate resources in different
proportions.
Zou and Stan (1998) in their review of factors, affecting export performance, distinguish internal and
external factors. They explain such distribution by two theoretical approaches. The internal factors can
be explained by the resource‐based theory and the second ones by industrial organization theory. Zou
and Stan (1998) divide the internal factors into controllable and uncontrollable, but the external are just
uncontrollable, still, they point out that such distribution does not have any theoretical support (in
comparison with theoretical approaches for distinction between internal and external factors). Leonidou
(2004, p. 281) determines export barriers as “all those constraints that hinders the firm’s ability to
initiate, to develop or to sustain business operations in overseas markets”. He distinguishes between
internal and external export barriers, where the last ones can be divided into procedural, governmental,
task and environmental.
2.2 Internal factors
In the present research some internal factors and their influence on export performance will be studied.
Both firm and managerial characteristics and attitudes have different impact on export performance and
can be essential for the decision to export or concentrate sales only on the domestic market. The
author’s decision to divide internal factors into organizational and managerial level in the present
research depends on that they include different aspects that are specific either for a company or its
administrators, which makes sense to study these aspects separately.
2.2.1 Organizational level
Size of organization
Bijmont and Zwart (1994) in the research about impact of internal factors on export success of Dutch
small and medium sized companies, determine some internal factors as firm characteristics, factor of
attitudes towards export (from managerial point of view), export policy and export marketing planning
4

factor. Louter et al (1991) in their research about factors for export determine internal success factors as
“universal”, which include firm’s characteristics, marketing strategy and attitude and commitment. They
consider these factors as prerequisites for export success.
Such factor as size of organization can have an impact on company’s success in export. According to EU
recommendations (2003), a company is determined as small if it has less than 50 employees and it is
determined as a medium‐sized enterprise when it has less than 250 persons. In his research Culpan
(2003) points out that a firm is regarded as small when it has less than 100 employees, and it is ranked
as medium‐sized if it has more than 100 employees (Culpan, 1989). In the present research the
definition suggested by EU recommendations (2003) will be used.
Cavusgil and Naor (1987) found a positive relation between a firm size and its export activity. However,
small firms can experience more difficulties to establish on foreign markets, which can be explained by
the fact that international involvement requires certain resources (both human and financial), which
small firms does not always have in sufficient degree (Bonaccorsi, 1993). Research, conducted by Culpan
(1989) shows as well that smaller companies are less successful in exporting, than medium‐sized ones.
Export activity can contribute to a company’s increased income, extended product life cycle and give
opportunity for new distribution channels (Aliand Swiercz, 1991). Holden (1986) in his research about
U.S. companies exporting to the European market found that small size of a company can be an
advantage by adjusting price in time, when currency rates changes rapidly.
Still, some researches show a contradictory meaning of a firm’s size for its export performance. This is
confirmed by Gomez‐ Meja (1988) and Holzmüller and Kasper (1991), who found that a firm’s size does
not influence or has little impact on its export performance. However, Louter et al (1991) found that
both small and medium‐sized companies were successful exporters.
Other researches show that larger firms have more advantages to get improved export result. This is
mainly due to they have better distribution of managerial and financial resources and due to economies
of scale (Bonaccorsi, 1993). The fact that larger firms achieve higher export performance as well as
“number of employees is positively related to export sales” was also confirmed by Baldauf et al (2000,
p.71).
Some researches show relationship between a firm’s size and its attitudes towards export. Finding,
made by Calof (1994), discovered that intentions towards export increase if a firm is large.
Firm’s export experience
Correlation between experiences of export activity as a factor of success has also been studied. In their
research Katsikeas et al. (1996) consider a company’s export experience as number of years a
manufacturing firm has been involved in export and number of countries, where it has exported. They
found as well that there is no direct connection between a firm’s export experience and export
performance. However, according to Dominguez and Sequeira (1993)a firm achieves better export
performance when it has experience in selling abroad.
It was found that export experience (volume) and firm’s performance has a strong connection (Madsen,
1993). According to Madsen (1993) export experience can have positive impact on a company’s
5

marketing methods and the way how a firm allocates its management resources towards the buying
country. Such relationship can be explained by the fact that exporting organizations obtain more
knowledge about market’s performance and social contacts, leading to improved communications
strategies, which results in enhanced export performance (Madsen, 1993).
Export experience can also influence attitudes towards further export (Gripsrud, 1990). Firms that have
exported products tend to continue export of them (Gripsrud, 1990). An interesting finding of Ali and
Swiercz (1991) supports studies about connection between international experience and attitudes
towards exporting. They suggest that companies, whose export experience is less than 3 years, have less
intentions to export, but those firms, which have been involved in international business for 3 and more
years, have strengthened intentions to continue with international activity. However, attitudes for
export seem to be less favourable for the companies that have exported for 7 to 10 years but
encouragement increases again after 10‐year period of export.
Export experience can be connected to how often a firm exports its production and export behavior. The
study conducted by Rocha et al. (1993), shows relationship between characteristics of an exporter
(aggressive or passive) and export experience, which is determined by how long a company sold abroad
since it started its export. A company tends to be an aggressive exporter if it has had a long experience
of selling aboard. According to Rocha et al (1993) passive exporters has been less engaged in experience
in time.
International business competence
Any company that decides to go abroad shall have certain competence, needed to achieve successful
export performance. In different studies there are other notions for international competence, which
are described as international marketing competence, export marketing expertise or export skills and
knowledge (Julien and Ramangalahy, 2003).
According to Belich and Dubinsky (1995) international competence is characterized by a company’s staff
skills when it regards making business abroad. Dealing with foreign customers can contribute to
improved knowledge of the staff about situations on the foreign markets (Belich and Dubinsky, 1995).
The same fact is confirmed by McDougall et al (1994), that a company, exporting its products, can
benefit by improved knowledge whether it concerns foreign markets or language.
According to Cavusgil and Zou (1994) it is supposed that a firm’s international competence has an
impact on its export performance. A study conducted by Knight and Kim (2009) reveals further
significance of international business competence. They consider that international business
competence include international orientation, international marketing skills, international
innovativeness and international marketing orientation. Among them international orientation and the
last one are considered to be particularly important for international business competence, indicating
its level. It depends on that organizational culture can be determined by international orientation and
international market orientation will impact on how a company will obtain knowledge about foreign
customers and rivals and how it will organize its activity towards international business (Knight and Kim,
2009).
6

Whether making business abroad will be successful or complicated can be determined by the fact if a
company has awareness about the foreign market and culture of the host country that can include
business patterns, social traditions, language, trade techniques etc., which vary significantly in every
country. The ability to deal with these aspects of different environments is essential for an exporting
company (Hallen, 1982). This is also supported by Belich and Dubinsly (1995, p.7), that for any company,
selling aboard, it is very significant to be able to manage “tasks relevant to business, cultural, and trade
environments”.
Business network
One of the factors that can contribute to the success abroad can be participation in a business network
in the home or host country. In the research of Björkman and Kock (1995, p.520) business network is
defined as “a set of two or more connected business relationships”. Such network can integrate
relations between customers and suppliers, industry and government association (Freeman et al, 2012).
To be involved in a business network means that a company gets strategic advantage, since a company
gets access to external information and opportunities in new markets (Ericcson and Chetty, 2003). Being
a part of international networks can give a company further opportunities for successful export.
Availability of international networks can provide an exporting company with access to the information
on the foreign market, whether the customers in the host country will accept the product, or how the
product shall be adjusted to the customer needs (Rauch, 2001). A foreign producer can benefit from
international network by getting assistance with finding suitable distributors or investors for
cooperation (Rauch, 2001).
2.2.2 Managerial level
Managerial characteristics
Management characteristics like aspects of the company have also certain impact on export
performance (Lages, 2008). Some objective characteristics like education, mastering a foreign language
can influence attitudes towards export (Reid, 1981). Command of foreign language give a manager some
advantages, it can be important in that meaning that it can simplify creating personal contacts or
contacts with possible business partners, develop relations with existing customers (Leonidou et al,
1998). Still, researches, conducted by Cavusgil and Naor (1987), Leonidou et al (1998) and Holzmüller
and Kasper (1991) found a different result. According to them relationship between these two
characteristics, determining export activity is weak. The same regards a manager’s age, no any certain
differences were found (Cavusgil and Naor, 1987; Leonidou et al, 1998).
Other characteristics like international experience of a manager can be significant for successful export.
This is confirmed by some researches, conducted by Dichtl et al (1990), Madsen (1993) and Axinn
(1993). The same is supposed by Zou and Stan (1998). They consider that a manager’s international
experience help to prevent a company from risks or give a company benefits in connection to doing
business abroad.
Some studies have been implemented to find a connection whether certain personality traits can impact
export performance. Such connection was found by Leonidou et al (1998), who found that risk
7

tolerance, innovativeness, flexibility, commitment and quality and dynamism can be referred to
successful export. Similar conclusions were made in the findings of Hultén (2009), who studied
establishment of Swedish small and medium sized companies in Russia. Such traits as innovativeness,
flexibility and commitment have positive influence on export performance. Management competences
are more important than firm characteristics according to Aaby and Slater (1993).
Management attitudes and perceptions
Among internal factors Zou and Stan (1998) point out a company’s export marketing strategy,
management attitudes and perceptions to export, management and a company’s characteristics and
competencies. According to Aaby and Slater (1993) management perceptions play large role for a firm’s
export success.
Strong connection between perceived opportunities for growth, connected to the export and export
performance (Axinn, 1993). Still, according to Axinn (1993) there is a weak connection between
perceived profit advantages and export performance. The opposite was found by Leonidou et al (1998),
but the researches confirm positive relation between perception of opportunities for growth and export
initiation.
According to Zou and Stan (1998), when they have summarized previous investigations about
managerial perceptions and attitudes, they found that a manager’s export commitment plays a key role
for export performance. They concluded as well that being international oriented creates a favorable
precondition for profitable export. On the other hand, perceived export barriers can lead to low
perceived export success (Zou and Stan, 1998).
Social network
Personal contacts can also be a crucial factor, contributing to export success.
Louter et al (1991) found that personal contacts and frequent communication with foreign customers
and distributors are significant for effective and successful export. The researches signify as well that
personal contacts with partners contribute to “moth‐moth advertising”. A long‐term relationship needs
care, confidence, regular visits and frequent communication.
According to Cavusgil and Naor (1987) a company can benefit from personal contacts on the external
level by receiving significant information in a shorter period than it would get the same information
from other sources.
Madsen (1993) found that positive personal relations and decisions taken together with the channel
members have good impact on export performance. His explanation of such connection depends on the
fact that cooperation leads to more qualified joint decisions and better understanding between
customers and channel members enhance export performance.
8

2.3 External factors
Just like a company’s internal factors can influence its activity abroad, a company’s macro environment
has impact on its performance. The factors coming from outside the company include forces that can
affect both the firm and its actors (Jobber, 2007). These forces are determined as political, economical,
social and cultural and technological factors. A firm can hardly influence them and sometimes even
depend on the home country’s foreign politic and international agreements towards the host country. A
number of researches have been conducted to find a connection between these forces, regarded as
export barriers, and export performance. Al‐Hyari et al (2012) distinguish the following export barriers:
procedural, governmental as well as environmental like economic, political‐legal and socio‐cultural. The
external factors, distinguished by Zou and Stan (1998), include industry characteristics, characteristics of
the foreign and domestic market.
Fallon and Jones (2004) in their study about UK companies, doing business in Russia, identified some
risks, existing on the Russian market, like economic, political, institutional and cultural, which included
unstable economic and market conditions, bureaucratic and government interference with commercial
transactions, corruption, increasing competition and language barrier. The last one was also determined
as barrier in the findings of Hultén (2009). Other findings confirm as well that bureaucracy and
competition on a foreign market are regarded as obstacles for export (Altintas et al, 2007).
Silva and Rocha (2001) in their study about perceptions of export obstacles among Brazilian firms found
out that larger, more experience firms viewed corruption as well as politic and economic restraints as
important obstacles for export.
Madsen (1993) found that such export barriers, as physical distance to export market or physiological

and cultural differences between the home and host country, have no direct effect on export
performance. However, companies, facing such barriers as tariffs have negative effect on export
attitude and leads to low export activity.
Russia is an attractive market for foreign enterprises whether it regards establishing business with
Russian partners, export or import. Still, different factors, existing on the Russian market can have
certain influence on the export. In the present research they will be presented as PEST (Political,
Economic, Social and Cultural, Technological environment) framework. Jobber (2007) refers this
framework to the forces that exist outside a company that together with a company’s
microenvironment create opportunities and risks for it and which a company cannot influence.
2.3.1 Political environment
Political environment in a host country is significant for the exporting company in that sense that the
country can apply different means which lead to complicated import. Among such political factors there
are tax regulations, tax rates, government stability, labor legislation or political interference in form of
bureaucracy and corruption (Czinkota and Ronkainen, 2010). Political factors can influence import in
that ways that they create a kind of regulation which foreign companies have to follow (Jobber, 2007).
Political situation in a country can impact attitudes towards the country on the international market.
Due to complicated political situation in the southern republics of Russia, located in the Caucasus region,
as well as strained relations with Ukraine and republic of Belarus, assassinations of journalists, which
9

could be related to their occupation have affected attitudes in Europe and outside towards Russia. Such
circumstances probably will not influence current business activities of foreign companies but it can
have an impact on taking decision if a foreign firm wants to establish its business affairs in the country.
By 2009 positive attitudes towards Russia turned to quite negative (Liuhto, 2010).
According to the Network for International Trade Services (data is missing) Russia considers being one of
twenty main importers in the world. Most of imported goods and services come from China (18%),
Germany (12, 2 %) and Ukraine (6,4%). By 2010Russia’s trade showed marked increase import of goods
and services. Importation from Sweden reached 1,3%. Export of foreign companies to Russia can be
influenced by a number of tariff and nontariff barriers, unfair and prohibitive charges and fees,
discriminatory licensing and a system of registration and certification, applied by the host country.
According to Wild et al. (2008) some non‐tariff barriers are quotas, embargoes, local content
requirement, currency control and administrative delays. The last ones imply different kinds of controls
and bureaucratic rules that foreign companies often have to face in connection to customs procedures.
Not all goods can be imported to Russia through all available border crossings, and sometimes foreign
companies get information about possible changes quite late. Such inconvenience and complicated
customer procedures, regarded to that, lead to unnecessary expenditures for foreign exporters. Custom
clearance for certain goods is possible only in ports or airports. Such ill‐considered decisions with
understaffed customs offices and absence of appropriate infrastructure cause logistical troubles.
As Russia is intending to become a member of the WTO and its obligation to fulfill the Coding System,
the country had to make changes in tariff rates by decreasing them for the 90% of the categories of
commodities. Besides the tariffs, Value Added Tax (VAT, decreased to 18% with some exception by
January 2004) and some selective excise taxes were overviewed. The last ones are charged by 20% to
570% depending if it is luxury goods, alcohol or cigarettes. The purpose of application of different taxes
and tariffs is supposed to protect domestic producers (the Network for International Trade Services,
2010).
Even other circumstances can determine how easy or complicated it is for foreign companies to export
to Russia.It happens that documents, required to export goods, are often interpreted in different ways.
Contradictory requirements cause quite often astonishment at foreign firms. Such inconsistence is
caused by differences between legislative framework, regulation of subsidiary companies and
administrative rules (Your guide to cracking world markets, 2011). However, it seems that more
transparency in required documents has been achieved for the number of documents, which are
required to import goods on the Russian market. Documentation has decreased, according to Doing
Business (2012), due to the reform referred to export to the country in 2012.
Corruption
Corruption causes large damage both to the society and the companies, operating on the market (Wild
et al, 2008). The explanation of Wild et al (2008) for the phenomenon is that this is mainly due to the
reason that resources are not used efficiently. One of the reasons, why corruption exists, can be
explained by the fact that the government is not powerful enough to control its bodies over the country
(Sun, 1999). According to Sun (1999) corruption in Russia can depend on that divided power among the
government bodies creates obstacles to put into action anticorruption laws.
10

Corruption is harmful on the organizational level as well. Here there can be difference between private
and state‐owned companies. Managers at the state‐owned companies seem to be interested in short‐
term profits than in contribution to further prosper of the company (Sun, 1999).
Corruption can influence well‐being of the country by money laundering or just transferring them to
banks abroad (Sun, 1999). Still, current total situation is becoming more profitable in Russia and more
investments in the country’s are made (Sun, 1999).
According to Levin and Satarov (2000) rights that can be granted exclusively by the state creates a
perfect ground for corruption. Some of such rights concern, for example, privilege for export and import
operations, taxes and issue of licenses.
It can be quite obvious that exporting companies, coming to Russia, wonder about how corruption
among the law enforcement bodies can influence their business activity, connected to the export, in
Russia. Customs and tax fees can be connected with bribes. In 1996 404 officers of the internal affairs
departments were suspected of corruption, many officers in the custom service (40%) were committed
with taking bribes (Levin and Satarov, 2000).
Still, some measures have been taken to fight corruption among law enforcement bodies. Internal
security service was established in The Federal Security Service, The Ministry of Internal Affairs, The
State Customs Committee and The Federal Service of Tax Police, where about 60% of the crimes were
revealed in The Ministry of Internal Affairs (Levin and Satarov, 2000).
Government bureaucracy
Overgrown bureaucracy can complicate foreign companies’ export to Russia. The reason for that are a
numerous papers, required from different government agencies. For exporting companies the main
issue here is operations connected to custom clearance, how much time it will take and what
documents are demanded. Still, bureaucracy will not be an obstacle to enter a foreign market if the
company is compensated by possibility for large profit on that market (Wild et al, 2008).
2.3.2 Economical environment
Economical environment of a country is determined by a number of factors, such as, economic growth,
exchange rates and inflation.
One of the indicators of economic performance in a country is its volume of its gross domestic product
(GDP), which was ‐7,9 % in 2009. At the same time, only a year later GDP increased by 3,8% (Bureau of
European and Eurasian Affairs, 2012). Still, the total GDP does not reflect its regional growth rate.
According to Liuhto (2010), the situation can be quite different among the regions.
Despite economic slack during the recent years after the world economic crises, the Russian economy is
gradually recovering, but the process is still slow, which is confirmed by the unchanged growth rate
since 2010 (4,3%). According to World Bank’s report (2012) the recovery can be explained by fixed
capital investment and inventories as well as increased consumption, mainly among private households.
11

In 2011, economic growth was achieved mostly due to consumption. Fixed investments are increasing
slowly.
According to World Bank’s report (2012) economic situation can also be described by the income, this
factor can be important in that meaning that consumption of goods and service will be effected. During
2008‐2010 disposable income was slowly increasing, but turned down from 2010 and was decreasing
during the whole year. At the same time, the situation for the incomes, referred to social protection was
different. Pensions increased in 2008 and their considerable increase was reached in 2010 (34,8%).
During first years of the crisis real incomes grew by 1, 8% but in 2011 the figure was lower, 1,1 %.
Income distribution contributed to consumption allocation among households with middle and high
income and low‐ income people. Among the first ones consumption decreased during 2009, but
expenditures of people with low income were stable. During 2010 consumption among both groups
increased. Changes in inflation rate refer also to the economic situation in the host country. Inflation
rate was significantly lower that during first period of the crisis.
2.3.3 Social and cultural environment
New customer and partners abroad mean that a company will have to face cultural and social challenges
that will influence how the actors of the new market will respond to a company’s product (Czinkota and
Ronkainen, 2010). Hollensen (2010) points out the following factors of socio cultural environment, as
language, manners and customs, technology and material culture, social institutions, education, values
and attitudes, aesthetics and religion. The main religion in the Russian Federation is Russian Orthodox,
which is followed by Islam, Judaism, Roman Catholicism, Protestant and Buddhism (Bureau of European
and Eurasian Affairs, 2012).
Accessible education increased literacy in Russia to almost 100%; number of institutions of higher
education is estimated to about 1 108. Nowadays, studying science and technology within educational
system get much interest, which contributes to high demand for researches in mathematical, scientific,
space and aviation spheres (Bureau of European and Eurasian Affairs, 2012).
Understanding cultural differences can be significant in the sense that a seller, taking consideration to
them, applies product adaptation to a certain market. Cinkota and Ronkainen (2010) point out the
following elements of culture:
• Language
• Religion
• Values and attitudes
• Education
• Manners and customs

How a company will be affected by these elements, will depend on its business activity on the foreign
market, whether the company is investor or sells products or services (Czinkota and Ronkainen, 2010).
Language
To understand people’s language means to understand their culture (Wild et al, 2008). This can be
especially important for foreign companies, which want to establish own business abroad.
12

Czinkota and Ronkainen (2010)point out some reasons why it is important to command language in
international marketing:
• Command language gives advantage of information gathering. Speaking the partners’ language
creates trust and improved personal relations that can contribute to further positive
cooperation. Moreover, misunderstanding is eliminated, since the manager can hear and
understand what is said. Command language allows a manager being part of the market, instead
of just observing it.
• Access to local society.
Language has its peculiarities, which shall be taken into consideration. The same language term in
language can mean different thing, which can be misleading.
Wild et al (2008) determine so called “lingua franca”, a language which is understood by 2 parties, who
have different native language. Nowadays, English can be regarded as lingua franca for making business
with foreign partners. Some international corporations choose one language for international
correspondence, which in most cases can be English.
For a company, starting its business on a foreign market, many issues can be solved by using local
agencies. Especially, it concerns making advertisement about the company’s production.
Manners and customs
Manners are “ways of our behaving, speaking and dressing” (Wild et al, 2008). Another element
following culture is customs, which are established habits and ways of behaving, handed down from
generation to generation (Wild et al, 2008). Differences in manners and customs between countries are
obvious. Czinkota and Ronkainen (2010) emphasize importance of understanding the partner’s manners
and customs in negotiations. It is quite obvious that business culture differs in every country. In such
cases correct interpreting is significant to make right conclusions. Russian way of negotiating has also
own peculiarities. When a foreign partner considers that the agreement is concluded, a Russian
representative can propose changes in the last minute. Foreign partners, who are not aware of the
Russian’s manners, consider it as poor preparation.
Czinkota and Ronkainen (2010) point out another part, that also refers to customs in other cultures,
which is gift giving. Gifts are an important part of creating relations between the partners. Some things
have quite neutral meaning, but the others can cause misunderstanding and astonishment from the
local partners’ point of view. Before to give a gift to the partner shall be whether it is a proper one. For
example, in Russia, as well as in Germany and France, it is not recommended to give a knife or any sharp
things (Wild et al, 2008).
2.3.4 Technological environment
As for the technology development Russia was the 50th of 154 countries between 2002 and 2007. Such
conclusions were drawn on the basis of research, where technological development of each country was
measured by eleven indicators, like number of internet users, educational level and literacy rate, access
to stationery and mobile telephones and wideband digital networks. The countries that have leading
13

position within information technology and communication are Sweden, South Korea, Denmark, the
Netherlands, and Iceland (Sivankov, 2010).
The difference between Europe and Russia how much employed in R&D is large. The number of people,
involved in Research and Development is 30% in Europe and only 1,5% in Russia. Still, even if the figures
are low, technological development is considered to be high, which can be explained by large amount of
high‐educated people, working in the technological area. Russia is one of the countries, which have
leading positions in the following spheres: nanotechnologies, power generation, space and software. As
for the nanotechnologies, this sphere is one of priority‐oriented by the government, since, the
investments are in it are gradually increasing since 2010. Power industry is developing as well and large
investments are made especially in nuclear power industry. Development rates are planned to increase
due to new equipment and increasing generating capacity in every plant. There is large interest for
producing renewable energy. Due to the country’s size and high transportation costs there through,
local energy sources would be a reasonable solution (Sivankov, 2010).
2.4 Frame of reference
According to Miles and Huberman (1994) the main idea of conceptual framework is to explain what the
research will be about by using a narrative or a graphical form, and to show relationship between the
key factors. Deeper understanding of factors that can influence Swedish companies’ export performance
in the Russian market is the aim of the research.
The graphical form shows connection between different components of internal and external factors
and export performance.
14

Figure 1. Influencing factors
INTERNAL EXTERNAL
– Organizational level – Political environment

– Managerial level – Economic environment

– Social and cultural

environment

– Technological
environment

SUCCESS FACTORS BARRIERS
EXPORT
PERFORMANCE

The figure shows that factors influencing a company’s export performance are divided into internal and
external. On the assumption of the literature review, majority of studies, regarding connection between
internal and external factor and export performance, show that most success factors belong mainly to
internal ones, and barriers seem to be referred to the external factors.

15

3 Methodology
This part presents information about what research methods were used and how empirical information
was gathered. As well, method problems are revealed to the accuracy of the collected information. The
methodology part also includes information, which methods of analysis will be used to analyze the
empirical information.
3.1 Research approach
Either qualitative or quantitative approaches or their mix can be applied in researches. The purpose of
quantitative method is to answer questions like “how much” and “how many” and results are quantified
by using statistical techniques. Such kind of research usually involves lots of respondents and tries to
find statistical implication (Miles and Huberman, 1994).
So that to get right answers for the research questions, it is important to make a correct choice between
qualitative and quantitative research. The second one is based on the understanding that we obtain
from figures (Saunders et al, 2009), which is an opposite of the qualitative research, when we interpret
meanings by words and not by the figures (Saunders et al, 2009).
For the present research qualitative approach seems to be the most suitable form. It helps to get
answers for the questions like “how” and “why” and will be more relevant to get answers, what Swedish
companies consider about factors, leading to successful export or the factors that are obstacles to it.
The main purpose of using qualitative approach in this case is not to get a statistical data, but interpret
the views of the relevant companies.
3.2 Research strategy
Choice of research strategy depends on the purpose of the research. Saunders et al (2009) points out
some possible strategies, such as experiment, survey, case study and action research. Among them case
study is the most suitable form for conducting the present research. According to Yin (2003), such kind
of research implies study a certain phenomenon in “its real life context”, especially when it is difficult to
distinguish between phenomenon and context. Additional explanation why case study is useful is its
connection to the research questions. Since the purpose of the present research work is to answer the
questions “how” and “why” case study can give better answers than any other research strategies
(Saunders et al, 2009). These two questions are asked about the present events, which the researcher
cannot control (Yin, 2003). It means for the present study that the author cannot influence the case
companies’ business, regarding their export activity.
Case study as a strategy is often used in explanatory and exploratory researches. Explanatory researches
are used mainly to find casual relationship between two phenomena in a specific situation (Saunders,
2009). The purpose of applying exploratory strategy is to find new insights; when understanding of a
problem is needed (Saunders et al, 2009). Besides, this strategy allows a researcher being flexible, i.e.
new information can influence choice of the research direction. On the assumption of an exploratory
purpose of the present research, this strategy is chosen by the author.

16

3.3 Literature search
Except research articles, books on different subjects within the research framework were used.
Material, available by the electronic resources of the library at Luleå University of Technology gave
advantage for information searching. To find necessary information such databases as Emerald, Google
Scholar, LUCIA, Scopus as well as search system for electronic and print journals at LTU were used. The
keywords were export, success, obstacles, Sweden, Russia, internationalization.
Previous studies about factors, influencing export, were used as well. To get better understanding of
internationalization and aspects of export to other countries research articles were studied.
3.4 Data collection methods
To get information for the research primary data was used as well. Primary data is described as data,
collected to the conducted research (Saunders et al, 2009). To get more specific answers for the
research questions and to confirm or confute the results of the previous studies, some interviews will be
conducted.
Since, the research is conducted according to a qualitative approach with exploratory purpose; an
interview is the most appropriate method to collect the primary data. Yin (2003) points out some types
of data collection for case studies, like documentation, archival records, interviews, direct or participant‐
observation. Among them he considers that interview has a significant role for collecting information for
case studies.
According to Saunders et al (2009) one‐to‐one interviews can be of different kinds, like face‐to‐face,
telephone or electronic interviews. Still, it was decided to conduct a personal interview due to the
advantages that it is supposed to have. Such kind of interview contributes to establishing personal
contact (Saunders et al, 2009)
Primary data for the research was collected by semi‐ structured interviews with the representatives of
the chosen companies. Such kind of data collection allows concentration on the research subject (Yin,
2003), flexibility and possibility for additional questions that can give further important information for
the present research. In addition, semi‐ structured interviews are widely used for studies with
qualitative approach. To get general picture about business activity, the respective company’s web‐page
was visited (as a source of secondary data).
Questions for the interview were based on the theoretical part of the research. According to Bryman
(2011) the questions must cover the subject, which implies certain significance, but they shall be
formulated from the respondent’s point of view. It means that a researcher shall undertake to consider
how an interviewee will answer a certain question or how he will react.
The interview guide was composed initially in English and then translated into Swedish. This was done
with regards to that the respondents are Swedish and so that they would not misunderstand a posed
question.
17

Before the interview started (as well as when representative of a respective company was contacted) a
brief presentation was done what it will be about and it was asked about permission to record the
respondent’s answers.
In order to document the information, it was decided to record the respondent’s answers, when the
permission was given, to the mobile phone by using its recording function. This decision was taken due
to some reasons. According to Saunders et al (2009) such kind of collecting the information has both
advantages and disadvantages. For example, it means that the interviewer can focus on listening to the
answers for the questions and observing the non‐verbal signals of the respondent. Further advantage of
recorded interview is possibility to re‐play it. This allows coming back to the answer in case better
understanding is needed. In addition to that, direct quoting is possible. Still, an interviewer shall be
aware of possible disadvantages of recording an interview (Saunders et al, 2009). Among them are
eventual technical problems with recording device and it can create inconvenience to the respondent.
The information, gathered during the interviews was refined, transcribed into written text and
translated into English. Since such information processing can cause misinterpreting, the translation was
done as carefully as possible.
3.5 Sample selection
Different sampling techniques can be used whether it is quantitative or qualitative research. These
methods are included in probability or purposive sampling (Bickman and Rog, 2009). In the present
research only purposive sampling is applied as it is completely related to the point of the research, when
some certain cases will be chosen and analyzed. Bickman and Rog (2009) define the following
techniques, used within this sampling strategy: sampling to achieve representativeness or comparability,
sampling special or unique cases and sequential sampling. The author of the research applies the
second one technique because it provides with better opportunities to get answers for the research
questions.
According to the subject of the present research and its purpose, the companies selected for the study
had to meet certain requirements, such as it must be a Swedish manufacturing company or companies,
which export to Russia or have had some experience of exporting to that country. The respondents
should be representatives of Swedish companies that have had experience of export.
To get sample of possible companies a meeting with the Swedish Trade Council, Luleå, was arranged.
These specified companies have their location in Västerbotten and Norrbotten and operate in different
sectors of industry.
Case companies were chosen according to their business activity. The choice depended on the kind of
their production, whether the company manufactures products or sells service, and their location.
Finally, it was decided to choose the company Part AB, located in Kalix, and Liko AB, Luleå. Such decision
was taken due to distance advantage to the chosen companies. Close distance simplifies contacts and
information gathering, required to make this research work possible.
Selection of the company’s representatives did not depend on the author’s decision. The names were
obtained when the author contacted respective company and explained the purpose of calling; the
18

author was referred to the potential respondents as they are supposed to be the most appropriate
employees, who could contribute with necessary information for the research.
Representatives of the companies, whose experience is valuable for the present research, were
contacted when sample selection was done. When permission to conduct an interview was obtained,
the interviews were conducted.
Representatives of both companies work with tasks, dealing with export. The main job duty of the
respondent in Part AB is supply responsibility. He receives specified orders, books up and holds a bidding
regarding freight costs. In addition, he takes care of physical processing that includes ordering and costs.
In other words, the respondent’s responsibility is to take care of freight, shop and delivery. The
representative of Liko AB works as a team leader for the group for order collection and is order
coordinator.
3.6 Data analysis
The empirical information, gathered during the interviews, is analyzed by within and cross‐case
methods. Analysis made by the first method allows comparing empirical findings with the previous
studies, described in the theoretical part of the research.
By making cross‐case analysis, the findings can appear to be stronger. Two different cases are regarded
then as individual cases, and findings from both cases are combined with each other so that to make a
general conclusion (Yin, 2003). According to Miles and Huberman (1994), cross‐case analysis increases
generalizability and “to deepen understanding and explanation”.
The findings will be presented in a text form for within‐analysis, and a table will be used to demonstrate
the differences between the companies within cross‐case analysis as well as explanation to the table.
3.7 Quality of data
A conducted research deals with aspects of reliability and validity. Finding of a research can depend on
implementation of data collection and analysis, done by the researcher. That is why to avoid getting
wrong findings the researcher should take into consideration the importance of validity and reliability.
3.7.1 Validity
Validity can be described as measuring the right thing, i.e. the studied phenomenon corresponds to
what the researcher wants to study. Level of validity is determined as high when right things are
measured (Bjereld et al, 2008). Yin (2003) points out construct validity, which implies using specific
measures for the studied phenomenon. In this case data collection requires using multiple sources of
evidence, chain of evidence and “a case study database”.
Findings of the present research will be based on the interview guide. In order to achieve high level of
validity the interview guide, based on theoretical studies, was submitted to the supervisor. After that
the interview guide was improved on the basis of the received comments so that to be used in dialogues
with the representatives of the companies later on.
19

As for the present study, both respondents, who participated in the interviews, have been employed in
the relative company during quite long time. The representative of Part AB has worked during 6 years
and the representative of Liko AB has work during 25 years in the company. They are both work with
issues, regarding export and have been engaged in respective company’s export to Russia. The reason
why just these representatives were chosen for participation in the interview depends on that during
the first contact with the respective company, the researcher was referred to them. Such selection
implies that they are considered to be the most appropriate persons for getting empirical information
for the present research.

Still, even if both representatives have been employed quite long time and know much about the issues,
regarding their work, connected to export, some other problems can arise. Both interview participants
had difficulties with answering some questions, because as they expressed it, they “did not possess
information to be able to answer the asked question”. It implies that the information, gathered for the
research is in some parts incomplete and does not give opportunity to confirm or reject some of
theoretical issues, touched upon in the research.
3.7.2 Reliability
The purpose of the reliability is to make a research as correct as possible (Yin, 2003). The reliability of
the present research can be considered as good. The information, received during both interviews, was
recorded on the mobile phone that eliminates misinterpreting. According to Bjereld et al (2007) one can
use different means to improve reliability, like to make repeated study of some part of the previous
research or let other researcher conduct the same study.
As for the present study, later on, when the information was refined and structured in a text, it was sent
to the both respondents so that they could look through it and confirm or reject wrong information.

20

4 Empirical data
This part of the research contains empirical information, obtained from two case companies. The
information will be analyzed and used for answering research questions.
4.1 PART AB
4.1.1 Company information
Part AB produces prefabricated bath rooms and operates in construction industry. Most of its products
are delivered to the building sector. The production volume estimates to 5000 prefabricated bath rooms
per year and the company is planning to increase the volume.
The company is an expanding one and has about 150 employees now. During the period of economic
recession between 100‐200 people were employed at Part AB and the company is going to employ
more people now. The company has its head quarter in Kalix and representative offices in Stockholm,
Malmö and Uppsala in Sweden. It has its distributers in Norway and Finland as well. As for export, the
main market is Norway. The annual turnover of Part AB is about 120 million SEK.
The main customers of the company’s production are basically hotels and no private apartment owners.
The respondent says that much depends on the required standard. To deliver prefabricated bath rooms
with low standard requires large volume so that it would be profitable.
The company exports its production mainly in Scandinavia, namely Norway, Finland and Denmark.
Except these countries Part AB has exported its production to Germany, England and Ireland. Part AB is
still receiving a lot of inquiries from the British Isles and a part of Scotland. The company has also
delivered its products to Island, and it was a unique project.
Part AB started to export its production to Russia in 2008. The reason why the company started export
was that Russia is an expansive market, and the executive group can see it as potential. Nowadays
building industry is developing in Russia. This means a lot of work for the company, but under condition
that all the channels perform well. Sometimes it can be difficult. Part AB does not have any continual
export to Russia, but receives inquires from Russian customers.
The respondent considered that it was difficult to answer the question, regarding the factors that had
the most positive influence on the export to Russia. On the contrary, the factors that had the most
negative influence considered to be burdensome bureaucracy and corruption. Part AB confronted with
corruption only initially during the first delivery. After that everything went well. The respondent says
that “bureaucracy is as it is”. The first shipment was complicated, but when they got through it, it just
rolled on. According to the respondent the most important factor was that they had an agent in Russia,
as well Russian haulage contractor with Russian drivers was hired, that facilitated customs clearance.
The haulage contractor was from Saint‐Petersburg.

21

4.1.2 Internal factors
Organizational level
Part AB did not experience any difficulties with starting export to Russia by reference to its size. Still, the
respondent emphasizes that it can be different for small and medium sized companies. As for export to
Russia, if a company has a right channel on the Russian side, it will function well. This regards generally
all the companies. If a firm does not have any Russian contact or someone, who deals with different
issues, it can be complicated. A firm size can be significant in that sense that if it is a small company, it
has less resources and it will experience more problems initially. If one has routines, it will function, but
start can be difficult.
Part AB started export to Russia for about 4 years ago, but to other countries, basically, when the
company was established. In the beginning the production was exported only in Scandinavia. On the
first stage, the company got problems with the Norwegian customs. However, the issues were solved
because Part AB has cooperation agreement with its Norwegian partner and nowadays cooperation is
going very well.
The respondent evaluates the company’s international competence as medium. They have agents in
other countries. According to the respondent international know‐how is not needed for the core work.
Part AB employs different agents as sellers. The company has a contact person in Russia, who helps and
functions as a network.
As for describing the influence of international competence on export performance, the respondent
considers that a firm shall have “international know‐how” so that it could work. As Part AB exports its
production to Norway, it will be enough with Norwegian contacts. Influence from the host country.
Before the company started export to Russia, Part AB wanted to know about the economic situation on
the Russian market and a customer. As the respondent emphasized one does not want to deliver the
production without prepayment that is why the company always requires advanced payment. This part
is the most important, to be sure of getting money. If the company delivers to the continual building
(CTP), it takes responsibility for risks. This can imply problems in the future because of costs for freight
and material. Except the economic part, Part AB wanted as well to get know how contracts should be
written, how one should secure oneself to get money, what can be a difficult part between the future
parties. The respondent considers that it is important as well to learn about customer, when a company
enters a foreign market. According to the respondent it feels secure to do business with an international
firm, but not if the company is entirely Russian. As the respondent said “otherwise, it feels nervous”.
One does not know about financial possibilities. The economic part, to get agreement endorsed, to be
sure to get payment. Part AB applies 20% advanced payment.
The respondent considered that it was difficult to answer a question regarding business network on the
Russian market. He supposes that Part AB had a business network, when it exported to Russia for the
first time. He supposes as well that the managing director and the owner of the company know better,
because they were personally in Russia. The company’s agent in Russia can be regarded as business
network.
According to the respondent business network has a certain influence on a firm’s export performance. It
is important to deliver and sell to all parties who want to buy, whether they are in Norway, Russia or
22

Denmark. Business network can influence company’s own networks, because operations towards
Russia are different. This is not so easy; one must have networks that are on a higher level. Without
knowledge of Russian, one can use English language.
Managerial level
Part AB has managers but they are not engaged in international affairs. The respondent equals a
manager and an agent. He has little international experience, when he has to work in the Czech
Republic, where the company had a plant. In the relevant countries, like in Russia, Part AB has agents,
who are company’s sellers.
Part AB employs only extern resources to obtain contacts and involve own sources in work. The
respondent considers that one can always get benefit from them. Every country has own peculiarities.
There are differences, one can do business in one way in Russia, but it will be different in Germany.
Those managerial characteristics that are important for export performance are openness,
understanding of different cultures and different ideas. It is important to understand how the person
acts and what culture is. Culture in Russia, how one shall handle with it, what one should do, how one
shall behave during dinners. If one treats own countryman in one way, one cannot expect the same
somewhere else. One should be flexible, to have ability to understand, this is important.
The respondent considered that it was difficult to answer the question, regarding connection between
managerial attitudes of the company and export performance. The respondent is convinced that a
manager’s attitude is sufficient for a firm’s export performance. If a manager has a negative attitude, it
will lead entirely to a bad result.
The respondent is not sure, if the company has got any advantage of private contacts. The local agent in
Russia is Swedish and the respondent believes that he knew the owner of the company before
establishing the business, what was positive. The agent’s network is important because one learn others
via someone.
4.1.3 External factors
Those difficulties that the company had to meet, when they started export to Russia were regulations,
to understand how it works. Part AB had to contact Swedish Trade Council to get assistance how one
should act. Still, they got little information from the Swedish Trade Council, that could be useful, just
general guidelines, what one should do, how, what aspects were important.
Political situation had quite marginal impact on export in 2008. Part AB noticed only little of it. There
was no direct resistance to export to Russia, in other words, the company did not experience any
obstacles towards import in the Russian politics. As for the importing tariffs, the only thing that the
company wondered about was why the production should have a special title. As the respondent
explained it, it is important to get correct duty status on the assumption of customs duties. It is
important that correct specification and tax code are used so that the tax code would be right.
23

As for corruption in Russia, the respondent says that there are problems related to it, but a lot is just
hearsay. The respondent told that an agent, who was engaged in similar work with a Finnish haulage
contractor, was not allowed crossing the Russian border and had to wait for a long time. As the
respondent experience it, it was very messy. The agent who worked with other operators within exactly
the same sector advises Part AB that they must have a Russian haulage contractor and Russian drivers to
be able to transport goods smoothly. Probably, that Finnish car had correct documents, but it was a
Finnish driver and the customs wanted to earn money by not letting him go further. Sooner or later
someone will come and offer some money. As the respondent point out such things says that there is
high level of corruption. The first shipment of Part AB encountered this fact, when one found a gap in
the documents and tried to exploit the system.
As for bureaucracy, Part AB considers bureaucracy in Russia to be cumbersome. As an example, the
respondent showed a document with eleven stamps of different organizations for approval to cross the
border.
The bureaucracy had negative influence on the company’s attitude towards export to the Russian
market. On the assumption of the further experience, the shipment is carried out mainly by the
customer now. If a customer wants, he can come to the plant and pick up the ordered product. This is
done so that to avoid customs clearance. In this case the responsibility lies with the customer that
facilitates the situation. The company’s experience is that when Part AB is responsible for the
transportation, it becomes more complicated and the risk to become stuck for something in the custom
is high. According to the respondents if there is some little deviation, it will lead to problems. If the
customs want to make spot‐check and to look at a prefabricated bath room, one can face the situation
that some component or a little detail classifies as “country of origin is not classified” will lead to stop. It
is required to show a document with table of contents to the right material. For example, the company
had difficulties in finding correct document for the “dry balls” because they consist of only salt.
The respondent’s spontaneous idea of economic situation in Russia is that there is a lot of money there.
The Russian market considers being good and the economy seems not to imply problems, at least on
those levels of export that Part AB has had to Russia. Still, in order to get correct indicator, about 10‐15
projects are required to get right picture. The economic situation did not have much influence on the
company’s export performance.
According to the respondent, the social factors did not have any influence on the export performance.
PartAB would like to deliver its production to houses. Still, in this case the social standard determines
standard for bath rooms. The more exclusive an apartment is the more probability that Part AB will get
more payment.
The cultural differences had little influence. According to the respondent, the country’s bureaucracy
reflects its culture, which follows each other. However, the language is an essential part, regardless
where the production is delivered. In most cases it is regarded as difficulty. It can be English instead, but
there are limitations there as well. Part AB has an employee who commands Russian, and it facilitated
situation, when the company would sent the first shipment.
As for the technological competence in Russia, according to the respondent it is on the high level. A
building construction is a part, there must be a technical specification how it functions and there was
not any problems regarding it. The respondent does not know, if Russian customer had to adjust to the
24

company’s production, or the company had to adjust to the Russian building standard. They must have
had primary condition to be able to use the modules. According to the respondent, know‐how is
generally quite high. At the respondent pointed out that even if man is educated, it does not mean that
man is an expert; however, it seems that there are a lot of highly educated and professional people.
The respondent pointed out that there is another factor, which can influence export performance to
Russia and it has rather negative impact. The fact is that the product must be complete, when it delivers.
The reason for that is delivery of the missing parts can cause high costs and problems in customs. It
depends on that a customer has already paid for the complete product. The situation can imply double
customs clearance. Except that a question arises, regarding guarantee that Part AB offer its customers.
In the first shipment, sent to Russia, there was one thing missing and the Russian customer probably had
to solve this problem by himself. How can one get the missing detail? The respondent speculated that
the Russian customer cooperates with some local intermediary to get details and guarantees.
The question regards a world economy in general, because it rules to a certain extent. If the world
economy is favourable, it has positive impact on a market situation. If the domestic market in Russia is
breaking down, enterprises have problems, it can be positive for the company’s business, as here an
extern factor comes, when Part AB can deliver a complete product. It will be easier for the Russian
companies to build. However, this is a world economic issue whether it will be positive or negative.
The respondent wishes that the bureaucracy in Russia would not have such extent, so that the company
could export more to Russia. It is necessary to have a system or a channel, that works, or en information
channel or an agent, who makes operations smoothly. Part AB is ready to go further to Russia if there is
no risk for bad deals.
4.2 Liko AB
4.2.1 Company information
Liko AB has 130 employees in Alvik and is the largest unit, where production is carried out in Sweden.
The headquarter of the company is located in Alvik. Liko AB has also some smaller representative offices
over the whole country. The turnover of the northern unit is 600 million SEK. Liko AB is a part of Hill‐
Rom Company.
The company operates in manufacturing sector, producing medical and technical equipment and its
customers are mainly hospitals.
Liko AB exports its production almost to all countries, all continents are included. The largest market is
USA, where Liko AB exports to through the Hill‐ Rom Company, as well as to the whole East Europe. It
has its representative offices in Asia, Middle East and the South Africa.
Liko AB started export to Russia, when they were contacted by the Russian distributor in 2001. The
company was a little skeptical in the beginning; it was more difficult to export before. Cooperation was
slow and it was difficult in the beginning, but later on it appeared to be a profitable one. It took time to
learn how to penetrate the Russian market. The representative pointed out that one needs stability and
should not change a distributor. Liko AB is still exporting to Russia.
25

Those factors that the respondent considered had the most positive influence on export to Russia was
growth potential, the distributor had good cooperation with the public hospitals and the administrative
managers . The company got an indicator for development and that potential would increase and it was
confirmed later on.
On the contrary, the factors which had the most negative influence on export to Russia seemed to be
perception of Russia as unexplored country, which their sellers never been to before. How skillful one
should be to make installations in hospital facilities, it is important that installations should be make in a
proper way. Only when installation is made, one can get an idea of the company, but if something is
wrong, it will create a negative image of it. Another challenge was that it was difficult to get production
into the country, but the distributor made all arrangements and the company did not have to be
involved in it.
The difference between Russia and customers in other countries is that the company can deliver its
products more or less frequently. On the contrary, it is much more difficult to export to Russia. Russian
customers want rather pick up the ordered goods less times per year, but it should be full trucks and
there must not be any residual notes. Liko AB must have everything available. Since Russian customers
order so much, it implies a challenge, to get all the commodities into the country; everything should be
available in time. Liko AB starts to prepare and packet everything some weeks before.
According to the respondent, it was not difficult to start export to Russia with regards to the company’s
size. Liko AB started export in the beginning of 80s and export to Russia was started in 2001.

As for the international competence, Liko AB is a part of Hill‐Rom Company, which is an American
corporation. It has large competence and local representatives in the whole world.
It is important to know the local market, there are differences and the products cannot be sold to all

countries in a similar way. It can be explained by different requirements; one should know demand for
different products. Otherwise, it will be only expenditures.
Before Liko AB started export to Russia, the company had contacted Export Council. Russian customers
and Liko AB visited each other in their respective country. Test installations were made and the visitors
had opportunities to learn each other, who they work with.
In the beginning Liko AB did not have any business network, but was contacted by a Russian side. When
the company entered the concern, the business network became larger.
The respondent considered it was difficult to answer a question, regarding influence of business
network, because it is not included in her ordinary job and administration seems to know better.
Managerial level
26

Liko AB has managers from different countries, 3 Americans (supply manager, quality manager and one
who works with Research and Development) and one manager from France. Every one works in Hill‐
Rom Company, where one changes work places. Moreover, Liko AB has a manager who works with sales
to West Europe, further 2 managers work with technical support, which is “also sales” as the respondent
said.

Managers, working internationally make new contacts; give input to the sellers about the company’s
products. The local sales team teach other sellers to sell the products, to what markets, what segments
one should turn to, what hospitals, how to transport, how to sell products to different hospitals.
Regarding managerial characteristics, according to the respondent’s experience one should be familiar
with in the market. It is not enough to have just a sales orientation within a certain segment and an
area, where the company’s products are sold. As a person one should be social, focused and have
ambition for growth, but to do it carefully. As the respondent said “one should be a kind of superman”.
The respondent considered it was difficult to answer a question about the influence of a manager’s
attitude towards export. She considered herself to be a wrong person to answer this question.
According to the respondent it feels like all of them work with export. Everyone has contacts with
customers and understands the importance of it. The respondent could not give an answer for the
question, regarding connection between a manager’s attitudes and the export performance of the
company.
The respondent does not know if the company had any private contacts on the Russian market and if
the company had any advantage of it.
The respondent considers that product handling is more thorough than in Sweden. A product shall be
registered so that to be imported. Otherwise, Liko AB did not have any big difficulties, when they started
export to Russia. The company had Russian distributors, who had experience in importing from other
countries in Europe, who knew the routines.
The respondent does not know en exact political situation in Russia. The sales did not changed and
were increasing from year to year. It looks like many companies are interested in the Russian market.
Liko AB was unique in this area before, but there are many competitors now. The market seems to be
more open and foreign companies want to know it. The respondent does not know if tariffs influenced
the export, because they do not take care of import to Russia.
As for the influence of the political situation on export, it was nothing that the company noticed in the
negative meaning. The only thing that they noticed was in connection with some change. A top
politician, who was involved in decision about purchasing for a hospital, had to leave his post. The
company noticed that the purchase was postponed. That made Liko AB uncertain if it the sales will take
place or not. This is the only thing that the respondent knows.
Because the company does not handle export by themselves, it is nothing what the respondent knows
about corruption in Russia, but just has heard about it. The respondent guesses that there is corruption
27

and it is wide spread in the society. Still, nothing has been noticed from the company’s side. Liko AB
would not do business if it had faced it. The respondent considers that export goes very well and the
company can export to any customer.
As for bureaucracy, the only thing that the company noticed was that if Liko AB has to deliver a product
to the country, the customs arbitrary stops the product. In this case the customs informs the company
that the product cannot be brought in the country. The respondent points out that in such cases it feels
that corruption is implicated and the customs tries to trade on the situation. Liko AB would readily
continue with express deliveries to Russia, but it does not work. The Russian customers have to come
here and pick up the commodities if they need them urgently.
Anyway, the respondent considers that bureaucracy did not influence the export. If Liko AB would be
responsible to get products into the country, it would be different. As the customers come and pick up
the ordered product, it works well. One needs certain documents to bring in products in a country, but it
is everywhere.
The respondent does not know about economic situation in Russia, but considers that there is
competition and it is more press on Liko AB now. Distributors cannot order a product long time before,
which influences bidding process. The economic situation in Russia contributes to a stable growth, sales
have been really profitable and the respondent determines it as favorable.
The respondent does not about how social factors had influenced Liko Ab’s export performance to
Russia. As for the cultural differences, the respondent wanted an explanation to the question, whether
it regards differences between populations or how the company’s production is perceived on the
Russian market. The only difference, which the company noticed was that people do not have the same
attitude towards products made in China in west; i.e., there is a “country of origin effect”. Goods
coming from Asia can have good quality as well, but the Russian customers regard them as bad‐quality
products. One can see differences in how one looks at things. A company will not be taken seriously if it
sells Chinese products. As for language, contacts with the distributor became limited. They speak
English, but an interpreter shall always be available. The respondent feels that it is hinders from getting
a personal relation to the managing director. It will be no private relation. However, it works well for
experienced foreign companies.
The respondent could not answer a question about connection between technological competence and
export performance. The company’s products are not so advanced, and all installations are made
manually.
The other factors, which can influence export to the Russian market is competition, how it will look like
in the future. An important issue is how it will be for other companies to be established on the Russian
market. Besides, if there is some dramatic change, like an old story between Russia and USA. For
example, Liko AB is not allowed exporting to some countries (Iran and Syria). If there is a conflict on a
political level, it can be stop for export. Still, it is very little probability that it can happen.
Liko AB has exported to the Russian market during many years. The company considers that it can take a
part of affairs; hospitals are modernized, before coming Olympic Games it is planned to equip local
hospitals with the company’s products.
28

5 Analysis
This part of the research presents analysis of the empirical information and findings, regarding factors,
contributing to export success and factors, which are barriers for it. At first, empirical information will be
analyzed within single company and then compared with findings from both companies. All findings from
empirical data will be related to the previous studies, described in the theoretical part of the research.

5.1 Within‐case analysis
5.1.1 PART AB
Internal factors
Part AB is a growing company and it is planning to increase number of employees. Nowadays it has 150
employees and can be considered as medium‐sized company in accordance with EU recommendations
(2003). According to the respondent, the company did not experience any difficulties with starting
export to the Russian market. This fact supports theoretical findings, made by Gomez‐ Meja (1988)
about connection between firm size and export performance. However, the situation can be different
for other small firms. The respondent’s further considerations coincide with researches of (Bonaccorsi,
1993) that smaller companies can experience difficulties in the beginning because of disadvantages,
related to the size.
Part AB has exported to different countries and has long export experience. This can be referred to
connection between export experience and attitudes to export, found by Gripsrud (1990). It can be
quite obvious that a company exports first to the neighboring market and if goes well, the company
wants to expand its export to other markets. In the beginning Part AB exported mainly in Scandinavia
and when it saw eventual profits outside the local market, it started to export to other countries. In
other words, company’s export experience leads to better attitudes towards export.
As for influence of international competence, Part AB considers that it is necessary to be aware of
international markets, which coincides with the findings, made by Hallen (1982). General knowledge and
awareness of peculiarities of a certain foreign market is essential for export success. That is why before
starting export to Russia, Part AB contacted Export Trade Council to get necessary information, what is
special with the Russian market, regarding its economical situation, customers and signing an
agreement with a partner.
Before the company started export to Russia, they had a local agent from Sweden. Available business
network can influence export performance by affecting the company’s own networks. However, none
theoretical support is available for this.
Managerial level
The respondent sets equality sign between a manager and local agent in Russia. The company
experience that it is an advantage to have a local representative. Since every country has own
peculiarities that influence domestic market, it can be important to have a qualified partner.

29

Certain management characteristics can be important for a company’s export performance. For Part AB
they are openness, ability to understand different cultures as well as new ideas. Moreover, the opinion
that such characteristics as flexibility and differentiation what is important, find support in the findings,
made by Leonidou et al (1998).
Even managerial attitudes can be significant. Negative attitude will lead only to negative performance.
However, any previous studies, to refer this opinion to, were not found.
According to Louter et al (1991) personal contacts can contribute to a company’s export success.
Business contacts can sometimes be regarded as private contacts as well. As it has been mentioned
before, Part AB has a Swedish agent in Russia, who can also be considered as the company’s local social
network. Part AB gets advantage of such relations, because it can lead to contacts with other future
partners or private persons (Louter et al, 1991).
External factors
Political situation in Russia did not have much influence on the company’s export to the country, when
Part AB started it in 2008. Russia is one of the largest importers and imports goods from the whole
world. Government can impose different measures, restricting import, but as for export from Sweden,
there are no known restrictions.
Corruption can be a part of political system in a country. Part AB considers that it can have a negative
influence, but does not see it as an obstacle for export, which is an opposite to the findings of Fallon and
Jones (2004). Part AB did not experience corruption on that level that it would influence company’s
export to Russia. However, the company’s first delivery was problematical. Part AB is aware that
corruption exists and seeks measures so that to avoid its possible negative influence on export. The fact
that a car from another company, working in a similar branch, was not allowed crossing the Russian
border and had to wait during long time. Even if the driver had correct documents, it can be an evidence
of corruption, related to bribes within customs service. Levin and Saraton (2000) pointed out that bribes
were very common among officers, working with foreign affairs and officers in the customs service.
Part AB experienced that Russian bureaucracy is quite burdensome. Customs procedure was
experienced as time‐consuming and complicated. The respondent showed a document, required for
customs clearance with 11 customs seals and stamps from different organizations. It is quite obvious
that a foreign company can regard such complicated procedures as an obstacle for export to the Russian
market. Such bureaucratic regulations and requirements for the documents had a negative influence on
the attitude of Part AB to export to Russia and in this case bureaucracy can be regarded as a barrier,
which is supported by Altintas et al (2007). Part AB had to reconsider their delivery system and now
Russian customers have to come and pick up the ordered good.
Economic situation did not have negative influence on the company’s export. On the contrary, Part AB
sees the Russian market as an attractive and a growing one with good economic potential. This empirical
finding does not coincide with export barriers, suggested by Al‐ Hyari (2012), where economic situation
is a risk for a foreign company.
30

Other factors, like social environment did not have any influence on the export. However, cultural
differences had a little impact. Here respondent determined language as an obstacle. The company has
an employee, who has command of Russian language that made contacts with Russian partners easier.
Language as an obstacle was also revealed in the findings of Hultén (2009).
Technological competence is considered as large in Russia and the company did not experience any
influence from technological environment.
Part AB considers that there are other factors that can complicate export of their production to Russia.
The fact is that their product must be complete, when it delivers. Otherwise, it will lead to problems
with customs clearance. Another point is how the company should provide guarantee service for the
customer.
Except the above mentioned factors, influencing export to the Russian market, world economy can play
significant role.

5.1.2 LIKO AB
Internal factors
Liko AB can also be regarded as a medium‐ sized company (EU recommendations, 2003). On the other
side, Liko AB is a part of Hill‐Rom Company, which is represented in the whole world. When it started
export to Russia and during export now, the company did not have any difficulties judging from its size.
This is also supported by the findings of Gomez‐ Meja (1988).

The international competence of Liko AB can be regarded as high due to it is a part of Hill‐Rom
Company. To have international competence For Liko AB is important because it gives knowledge about
a foreign market. Such necessity depends on differences between domestic market and foreign one and
demands for a company’s products. This opinion coincides with findings, made by McDougall et al.
(1994).
It is difficult to estimate influence of business network on the company’s export performance because
no empirical information is available.
Managerial level
Manager with international experience have a positive impact on export performance as a whole due to
new contacts and information spreading. Managers are a source of knowledge about the company’s
production, new sales channels and markets.

It is also difficult to estimate influence of managerial attitudes, social network on export performance.
Liko AB considers that a manager, who is outgoing, concentrated, dedicated and ambition to expand,
but to do it carefully, is important for export performance. Still, such opinion does not have theoretical
support in the present research and can be regarded as a new finding.
31

External factors
Political situation in Russia did not have any negative influence on the company’s export as a whole.
Liko AB considers that corruption did not influence the company’s export. However, Liko AB supposes
that it exists, but it have not had any experience of that. Since export is stable and continual, corruption
is not regarded as an obstacle for export to Russia, which is an opposite finding of Fallon and Jones
(2004).
Many companies view bureaucracy as a barrier for export to a foreign market (Altintas et al, 2007), but
Liko AB does not regard it as any difficulty. Probably, for the most part it depends on that the company
is not responsible for import, but a Russian distributor takes care of procedures, connected to import of
their production to Russia. Otherwise, Liko AB is doubtful that export would be easy to implement.
Economic situation in Russia is perceived as favourable, leading to high sales. In the case of Liko AB it
cannot be regarded as an obstacle as well. This finding does not support conclusions of Fallon and Jones
(2004).
As for social factors, the respondent was not familiar with their influence on export performance. This
makes impossible to make a reference to any previous study.
Cultural differences can also impact a company’s export performance, but the company does not regard
them as an obstacle. Al‐Hyari (2012) sees socio‐cultural factors as barriers for export, but this is not
confirmed by Liko AB. Within social and cultural environment language is regarded as a main barrier for
making business abroad. Liko AB has also had to face this problem (Hultén, 2009). Command of the
language gives opportunities for creating personal contacts with partners, but Liko AB considers that
these relations with the chief executive officer of the distributional company are limited due to the
language barrier.
The respondent was not familiar how technological environment in Russia influenced their export
performance. In this case, it is impossible to determine its barrier status.
5.2 Cross‐case analysis
The cross‐case analysis is presented in a table, where results from empirical data about both companies
are compared with the theoretical findings from previous studies. The model of the table is based on the
recommendations for presentation techniques of Miles and Huberman (1994).
32

Table 1. Cross‐case analysis, success factors and obstacles for export

Frame of reference Part AB Liko AB

Internal factors

Firm size 0 0

Firm’s export experience + +

International business + +
competence
Business network + ?

Management characteristics + +

Management attitudes and + ?
perceptions
Social network + ?

External factors

Political environment 0 0
‐Bureaucracy – –
‐ Corruption 0 0

Economical environment + +

Social and cultural environment 0 0
‐Language – –

Technological environment 0 ?

“+ “ positive influence on export performance
“‐ “ negative influence on export performance
“0” no influence on export performance
“?” given “don’t know responses”

The cross‐case analysis shows that both companies have quite similar points of view, however with
some exception, when it concerns influence of internal and external factors on export performance. On
the basis of comparison, most of the presented internal factors have positive influence on export
performance.
33

On the assumption of the comparison of Part AB and Liko AB, in both cases export performance was not
influenced by the firm size.
Both Liko AB and Part AB have been established on the market and exported to different countries for a
long time. In this case export experience can contribute to positive attitude for further export (Gripsrud,
1990).
Both companies are aware of significance of international business competence for export success,
which coincides with the findings of Hallen (1982).
Part AB considers that it is important to have a business network on the foreign market. Still, it is
difficult to say something about Liko AB, since information is not available. Other points, regarding Liko
AB, which cannot be referred to previous findings, are influence of management attitudes and
perceptions and impact of social networks on export performance.
Management characteristics are prerequisites for export success, which was found by Leonidou et al
(1998). As well as their attitudes play significant role. Both Part AB and Liko AB have similar opinion.
Business and social networks are important for Part AB to achieve good export performance.
External factors have had quite similar impact on export performance of the both companies. As it
follows from the table, political, socio‐cultural and technological environment did not play any
significant role on the export performance and cannot be regarded as barriers in this research.
Moreover, economic situation in Russia was considered by both Liko AB and Part AB as very positive and
contributing to high sales and further export to the Russian market.
However, both companies experienced some external factors as obstacles. Two inhibiting factors were
determined for Part AB, namely language, which is also regarded as a barrier by Hultén (2009) and
bureaucracy (Altintas et al, 2007). If the last was less burdensome, Part AB would export more to the
Russian market.
Liko AB sees language also as a barrier. Even if bureaucracy had little impact on the company’s export
performance, it can also be regarded as an obstacle (Altintas et al, 2007). So language and bureaucracy
have had negative influence on export performance of both companies.

34

6 Conclusions and findings
This part of the research will present findings and answers for the research questions. Discussion as well
as implication for future research will be presented.
The purpose of the present research was to reveal what factors contribute to successful Swedish
company’s export to the Russian market and what factors are obstacles for export. For that reason
internal and external factors, influencing export performance, were studied. On the assumption of the
analysis of two companies, the following answers to the posed research questions were found.
RQ 1: What factors can contribute to successful export of Swedish companies’ production to Russia?
It was found that factors on internal level, like firm’s export experience, international business
competence, business network, managerial characteristics and attitudes as well as social network have
distinct connection between successful export and export performance.
Regarding internal factors, other things, that Part AB emphasized, was that business network can affect
the company’s own networks and indirectly influence export performance. Such managerial
characteristics as openness, ability to understand different cultures and new ideas are prerequisites for
successful export. As for external factors both companies perceived present economic situation on the
Russian market as very favorable for further export to Russia.
Some interesting similarities were found between the companies, how they arrange their export to
Russia. Both Liko AB and Part AB use similar approaches to make export smooth. They are the following:
• Russian customers come to the plant and pick up the ordered goods. This allows avoiding
burdensome bureaucratic customs procedures.
• Russian distributor or an agent, who represents the company on the Russian market. To
have a representative on a foreign market is important because he can assistant with
import procedures, so that the exporting company does not need to think about all details.
• One should learn about customer and Russian market before to start export. Every country
has own peculiarities, that will affect foreign company’s business activities on that market.
• Available business and social network on the Russian market. To have networks on a foreign
market is important because they can provide the exporting company with necessary
information in a more effective way and they can lead to other contacts, contributing to
positive export performance.
Another interesting thing that Part AB pointed out is that a company, exporting to Russia and which
transports its production by own means must have a Russian haulage contractor with a Russian driver.
This is to avoid administrative and bureaucratic delays during customs procedures.
35

RQ 2: What factors can hinder Swedish companies’ export to Russia?
Usually, factors building up a company’s macro environment (politics, economy, culture and technology)
are perceived as barriers for doing business on a foreign market, since they include many components
that a company cannot control (Jobber, 2007).
Influence of political, economic, social and cultural as well technological environment was studied in the
present research. It was found that factors on the external level as a whole do not have certain impact
on export performance. However, language as a part of cultural environment, and bureaucracy, being
part of a country’s political system were regarded as an obstacle.
It is not reasonable to generalize findings from only two Swedish companies, but taking into
consideration the similarities in export activity and factors, influencing export performance, one can
suppose that some points of this model can be applied by other Swedish companies, who export or
intend to start business activity towards Russia. Both companies see Russian market as an attractive and
want to continue export to this country.

6.1 Further research
In the present research only some of the internal and external factors influencing export were studied.
Further studies can investigate other numerous aspects existing on organizational and managerial level
in a firm. Moreover, political and economic situation can be quite different in Russia in some years,
which can lead to other conditions for exporting to the Russian market. On the basis of that, a similar
research can be relevant, taking into consideration the present situation on the Russian market in a
given year.
Taking into consideration territory size of the Russian Federation it is quite obvious to suppose that
conditions for making business for foreign firms can vary in the whole country. It can depend on that
administration of the country’s regions can apply own regulations or conditions for import may vary
when it concerns import from neighboring countries or import to the central part of the country. It
means that further studies about export of Swedish companies’ products to the near‐border or central
part of the Russian Federation can be relevant.
6.2 Managerial implications
Implications for managers imply suggestions for a company that is exporting or considering starting
export to the Russian market. Proposals are based on the comparison of export activity of two Swedish
companies and findings in the present research.
Taking into consideration positive connection between internal factors and export performance,
it is recommended that a company shall have international business competence, what
peculiarities Russian market has and its customers demand. Understanding different aspects,
influencing a company can create more appropriate strategies for making business on the
Russian market.
36

To have managers, who have positive attitudes for export can be one of the key factors for
achieving stable and high sales abroad. A company shall make sure that appropriate personnel
work with export issues; a manager, working with export shall possess certain personal
characteristics, like to be open‐minded, flexible and inventive.
To be able to solve possible issues of a foreign company or to establish its products on the
market is recommended to have a local agent or distributor, who can be a part of a business
network. Advantage of having local representatives is that they provide the foreign company
with necessary information faster than other formal sources as well as it is used as an
intermediary for selling the company’s production to the Russian market.
A company that transports its production to the Russian customers is recommended to hire a

Russian haulage contractor, so that to avoid burdensome customs procedures.
Since language can be an obstacle, a company selling to Russia can benefit from employing
personnel, who has command of Russian language.

37

REFERENCES
Aaby, N.‐E., Slater, S.F. (1993). Management Influences on Export Performance: A Review of the
Empirical Literature 1978‐1988. International Marketing Review, 6 (4), 7‐ 26.

Albaum, G. & Duerr, E. (2008). International Marketing and Export Management. Harlow, England:
Financial Times Prentice Hall.
Ali, A. & Swiercz, P.M. (Apr, 1991). Firm Size and Export Behavior: Lessons from the Midwest. Journal of
Small Business Management, 29(2), 71‐78.

Al‐Hyari, K., Al‐Weshah, G., Alnsour, M.(2012). Barriers to internationalisation in SMEs: evidence from
Jordan. Marketing Intelligence & Planning, 30 (2), 188 – 211.

Altintas, M.H., Tokol, T., Harcar, T. (2007). The effects of export barriers on perceived export
performance: An empirical research on SMEs in Turkey. EuroMed Journal of Business, 2 (1), 36 – 56.

Artemiev, I. & Bagaudinova, S. (2009). Doing Business in Russia. Washington: The International Bank for
Reconstruction and Development/ The World Bank. From http://subnational.doingbusiness.org.

Axinn, C. N.(1993). EXPORT PERFORMANCE: DO MANAGERIAL PERCEPTIONS MAKE A DIFFERENCE?
International Marketing Review, 5 (2), 61‐71.

Azzi da Silva, P.A., da Rocha, A. (2001). Perception of export barriers to Mercosur by Brazilian firms.
International Marketing Review, 18(6), 589 – 611.

Baldauf, A., Cravens, D. W., Wagner, U. (2000). Examining Determinants of Export Performance in Small
Open Economies. Journal of World Business, 35(1), 61‐79

Belich, T.J., Dubinsky, A.J. (1995). Factors Related to Information Acquisition in
Exporting Organizations. Journal of Business Research, 33, 1‐11.

Bickman, L., Rog, D.J. (2009). The SAGE handbook of applied social research methods. Los
Angeles: SAGE.

Bijmolt, T.H.A., Zwart, P.S. (Apr, 1994). The impact of internal factors on the export success of Dutch
small and medium‐sized firms. Journal of Small Business Management, 32 (2), 69‐83.

Bjereld, U., Demker,M., Hinnfors, J. (2007).Varför vetenskap? Lund: Studentlitteratur.

Björkman, I. & Sören K. (1995). Social Relationships and Business Networks: the Case of Western
Companies in China. International Business Review, 4 (4), 519‐535.

Bonaccorsi, A. (1992). On the relationship between firm size and export intensity. Journal of
International Business Studies, Fourth Quarter 1992, 23(4), 605‐635.

Bryman, A.(2011). Samhällsvetenskapliga metoder (B. Nilsson, övers.). Malmö: Liber. (Originalarbete
publicerat 2008).

38

Bureau of European and Eurasian Affairs (2012). Background Note: Russia. Downloaded from
http://www.state.gov/r/pa/ei/bgn/3183.htm# on the 3rd of May 2012.

Calof, J.L. (2nd Qtr., 1994). The Relationship between Firm Size and Export Behavior Revisited. Journal of
International Business Studies, 25 (2), 367‐387.

Cavusgil, S.T., Kirpalani (Manek), V.H. (1993). Introducing Products Into Export Markets. Journal of
Business Research, 27, 1‐15.

Cavusgil, S.T. & Naor, J. (1987). Firm and Management Characteristics as
Discriminators of Export Marketing Activity. Journal of Business Research, 15, 221‐235.

Cavusgil, S.T., Zou, S.(Jan., 1994). Marketing strategy‐performance relationship: An investigation of the
Empirical Link in Export Market Ventures. Journal of Marketing, 58(1), 1‐21.

Culpan, R. (1989). Export Behavior of Firms: Relevance of Firm Size. Journal of Business Research, 18,
207‐218.

Czinkota, M.R. & Ronkainen, I.A.(2010). Principles of International Marketing. Mason, Ohio: South‐
Western Cengage Learning.

Ditchtl, E., Koeglmayr, H.‐G., Mueller, S. (1990). International Orientation As A Precondition For Export
Success. Journal of International Business Studies, First Quarter, 21(1), 23‐40.

Doing Business. (2012). Doing business in a more transparent word. Economy profile: Russian
Federation. The International Bank for Reconstruction and Development/The World Bank. Downloaded
from http://www.doingbusiness.org/reports on the 7th of May 2012.

Dominguez, L.V., Sequeira, C.G. (1993). Determinants of LDC Exporters' Performance: A Cross‐National
Study. Journal of International Business Studies, 24(1), 1st Qtr.1993, 19‐40.

Eriksson, K., Chetty, S. (2003). The effect of experience and absorptive capacity on foreign market
knowledge. International Business Review, 12, 673–695.

Fallon, G. & Jones A. (2004). Marketing in Russia by UK businesses: lessons from a survey of trade
missioners to Moscow. Journal of Small Business and Enterprise Development, 11(2), 174 – 185.

Freeman, J., Styles, C., Lawley, M. (2012). Does firm location make a difference to the export
performance of SMEs? International Marketing Review, 29 (1), 88 – 113.

Gomez‐ Mejia, L.R. (1988). The Role Of Human Resources Strategy In Export Performance: A
Longitudinal Study. Strategic Management Journal, Sep/Oct 1988, 9(5), 493‐505.

Gripsrud, G. (1990). The Determinants of Export Decisions and Attitudes to a Distant Market: Norwegian
Fishery Exports. Journal of International Business Studies, third Quarter, 21 (3), 469‐ 485.

Hallen, L. (Winter, 1982). International purchasing in a small country: An exploratory study of five
Swedish firms. Journal of International Business Studies (pre‐1986), 13(000003), 99‐112.

39

Holden, A.C. (1986). Small business can market in Europe: Results from a Survey of U.S. Exporters.
Journal of small business management, 24, 22‐29.

Hollensen, S. (2010). Global marketing [Electronic resource] : a decision‐oriented approach. Harlow,
England: Financial Times Prentice Hall.

Holzmüller, H.H. & Kasper H. (1991). On a Theory of Export Performance: Personal and Organizational
Determinants of Export Trade Activities Observed in Small and Medium‐Sized Firms. Management
International Review, 31, 45‐ 70.

Hultén, P. (2009). Swedish SMEs' Establishment of Business in Russia: A Case Study. Journal of East‐West
Business, 15(1), 5‐24.

Jobber, D. (2007). Principles and Practice of Marketing. Maidenhead: McGraw‐ Hill Education.

Julien, P.‐A., Ramangalahy, C. (Spring, 2003). Competitive Strategy and Performance of Exporting SMEs:
An Empirical Investigation of the Impact of Their Export Information Search and Competencies.
Entrepreneurship Theory and Practice, 227‐245.

Katsikeas, C.S., Piercy, N.F., Ioannidis, C. (1996). Determinants of export performance in a European
context. European Journal of Marketing, 30 (6), 6 – 35.

Knight, G. & Kim, D. (2009). International business competence and
the contemporary firm. Journal of International Business Studies, 40, 255–273.

Lages, L.F. (2000). A Conceptual Framework of the Determinants of Export Performance: Reorganizing
Key Variables and Shifting Contingencies in Export Marketing. Journal ot Global Marketing, 13(3), 29‐51.

Leonidou, L. (2004). An Analysis of the Barriers Hindering Small Business Export Development. Journal of
Small Business Management , 42(3), 279–302.

Leonidou, L.C., Katsikeas, C.S., Piercy, N.F. (1998). Identifying managerial influences on exporting: Past
research and future directions. Journal of International Marketing, 6 (2), 74‐102.

Levin, M. & Satarov, G. (2000). Corruption and institutions in Russia. European Journal of Political
Economy, 16, 113–132.
Liikanen, E. (2003). Commission Recommendations of 6 May 2003 concerning the definition of micro,
small and medium‐sized enterprises. Official Journal of the European Union, L 124/36.

Liuhto, K. (2010). Political risk for foreign firms in Russia. Romanian Journal of Economic Forecasting, 3,
141‐157.

Louter, P.J., Ouwerkerk, C., Bakker, B.A.(1991). An Inquiry into Successful Exporting. European Journal of
Marketing, 25 (6), 7 – 23.

Madsen, T.K. (1993). Successful Export Marketing Management: Some Empirical Evidence. International
Marketing Review, 6(4), 41‐ 57.

Mansikkaviita, A., (2012). Utrikeshandel, export och import av varor. Sveriges officiella statistik,
statistiska meddelanden. Downloaded from
40

http://www.scb.se/Statistik/HA/HA0201/2011M12D/HA0201_2011M12D_SM_HA22SM1201.pdf on the
30th of April 2012.

Miles, M.B., Huberman, A.M. (1994). An Expanded Sourcebook: Qualitative Data Analysis. Thousand
Oaks: Sage Publications.

Phillips McDougall, P., Shane, S., Oviatt, B.M. (1994). Explaining the Formation of International New
Ventures: the Limits of Theories from International Business Research. Journal of Business Venturing, 9,
469‐487.

Rauch, J.E. (Dec., 2001). Business and Social Networks in International Trade. Journal of Economic
Literature, 39(4), 1177‐1203.

Reid, S.D. (Autumn, 1981). THE DECISION‐MAKER AND EXPORT ENTRY AND EXPANSION. Journal of
International Business Studies, 12(2), Tenth Anniversary Special Issue. Supplement, 101‐112.

da Rocha, A., Christensen, C.H., da Cunha, C.E. (1993). Aggressive and Passive Exporters: A Study in the
Brazilian Furniture Industry. International Marketing Review, 7(5), 6‐15.

Saunders, M., Lewis, P., Thornhill, A. (2009). Research Methods for Business Students. Harlow, England:
Financial Times Prentice Hall.

Sivankov, A. (2010). Possibilities and challenges. Economic strategies, 12, 50‐55.

Sun, Y. (Oct., 1999). Reform, State, and Corruption: Is Corruption Less Destructive in China than in
Russia? Comparative Politics, 32(1), 1‐20.

The Network for International Trade Services (data is missing). Trade Policy and Regulations in Russia.
downloaded from http://www.globaltrade.net/f/business/Russia/Trade‐Policy.html on the 2nd of May
2012.
The Network for International Trade Services (2010). Import Tariffs in Russia. Downloaded from
http://www.globaltrade.net/f/business/Russia/Trade‐Policy.html on the 2nd of May 2012.
The Network for International Trade Services (2010). Trade Barriers in Russia. Downloaded from
http://www.globaltrade.net/f/business/Russia/Trade‐Policy.html on the 2nd of May 2012.
Ulatov, S., Smits, K. (April, 2012). Moderating Risks, Bolstering Growth. Russian Economic Report, 27.
Downloaded from http://documents.worldbank.org/curated/en/2012/04/16251128/moderating‐risks‐
bolstering‐growth on the 5th of May 2012.

Utrikesdepartementet (2012). Ryssland. Downloaded from
th
http://www.regeringen.se/sb/d/5472/a/43790 on the 10 of May 2012.

Wild, J. J., Wild, K.L., Han, J.C.Y. (2008). International Business: the Challenges of Globalization. Upper
Saddle River, New Jersey: Pearson Prentice Hall.

Yin, R.K. (2003). Case study research: design and methods. Thousand Oaks: Sage Publications.

41

Your guide to cracking world markets. (2011). Customs clearance procedures . Downloaded from
http://madb.europa.eu/madb_barriers/barriers_details.htm?barrier_id=020032&version=10 on the 3rd
of May 2012.
Zou, S. & Stan S. (1998). The determinants of export performance: a review of the empirical literature
between 1987 and 1997. International Marketing Review, 15(5), 333 – 356.

Interview

Part AB, Kalix the 2nd of May 2012, 10.00‐11.00
Liko AB, Luleå the 3rd of May 2012, 14.00‐14.30

42

APPENDIX 1
Interview guide (in English)
1. Background of the company.
o What is your position in the company?
o How long have you worked at the company?
o What is your background?
o Number of the employees in the company?
o Branch of the industry, the company operates in.
o What other countries does your company export the production to?
o When and why did your company start to export to Russia?
o Does your company still export to Russia?
o What factors do you think had the most positive influence on export performance to Russia?
o What factors do you think had the most negative influence on export performance to Russia?

Internal factors, influencing export.
2. Organizational level of the company.
o Did you have any difficulties with starting export to Russia taking into consideration size of your
company?
o How long time have you exported to Russia and other countries?
o How would you describe international competence of your company?
o Describe the influence of the international competence on the export of your company.
o How did you prepare for export to the Russian market?
o Did you have any business relations on the Russian market?
o Describe the impact of the business network on your export performance.

3. Managerial level of the company.
o Do you have any managers with international experience, working with export?
o Have their experience influenced the company’s export performance? If so, how?
o What managerial characteristics do you think are important for export performance?
o Describe your managers’ attitude towards export. Have their attitudes influenced the
company’s export performance? If so, how?
o Did you have any benefits from private contacts in Russia?

External factors, influencing export.
4. PEST framework
o Did you meet any difficulties with starting export to Russia? What were they?
o How do you experience political situation in Russia?
o How has political situation in the country influenced the export?
o How did you experience corruption in Russia?
43

o How did you experience bureaucracy in Russia?
o Describe how it influenced your company’s attitude towards export to Russia?
o How do you experience economical situation in Russia?
o How has economical situation in the country influenced the export?
o Do you think that social factors (e.g., age distribution, population’s health, safety consciousness)
have influenced export performance? If so, how?
o Do you think that cultural differences have had any influence on the export? How?
o How do you think access to technology influenced the export?

Finishing questions
o Are there any other factors, besides the above mentioned, that can influence the export
performance to the Russian market?
o Is there anything else you would like to add?
o Can I contact you later if I have any additional question or need to clarify something? What is
your preferred means of contact (e‐mail, phone…)?

44

APPENDIX 2
Intervjufrågor (på svenska)
1. Företagets bakgrund.
o Vad är din titel/ funktion på företaget?
o Hur länge har du arbetat på företaget?
o Vad är din bakgrund?
o Hur många anställda har företaget?
o I vilken industribransch är företaget verksamt i?
o Till vilka andra länder exporterar företaget sin produktion?
o När och varför startade ert företag exportera till Ryssland?
o Exporterar ert företag fortfarande till Ryssland?
o Vilka faktorer anser ni inverkade mest positivt på exporten till Ryssland?
o Vilka faktorer anser ni inverkade mest negativt på exporten till Ryssland?

Interna faktorer som påverkar export.
2. Företagsnivå.
o Hade ni några svårigheter med att starta export till Ryssland utifrån företagets storlek?
o Hur länge har ni exporterat till Ryssland och andra länder?
o Hur skulle ni beskriva företagets internationella kompetens?
o Beskriv påverkan av internationell kompetens på företagets export.
o Hur förberedde ni er inför export till den ryska marknaden?
o Hade ni affärsrelationer på den ryska marknaden?
o Beskriv påverkan av affärsnätverk på företagets exportresultat.

3. Ledarnivå.
o Har ni några manager med internationell erfarenhet, som arbetar med export?
o Har deras erfarenhet påverkat företagets exportresultat? Om ja, hur då?
o Vilka karaktärsdrag hos manager anser ni är viktiga för exportresultat?
o Beskriv företagets managers inställning till export.
o Har deras inställning påverkat företagets exportresultat? Om ja, hur då?
o Fick ni någon fördel av privata kontakter i Ryssland?

Externa faktorer som påverkar export.
4. PEST framework
o Hade ni några svårigheter med att starta export till Ryssland? Vilka var de?
o Hur upplever ni politisk situation i Ryssland?
o Hur har den politiska situationen påverkat exporten?
o Hur upplever ni korruption i Ryssland?
45

o Hur upplever ni byråkrati i Ryssland?
o Beskriv hur det påverkade företagets inställning till export till Ryssland?
o Hur upplever ni ekonomisk situation i Ryssland?
o Hur har den ekonomiska situationen i landet påverkat exporten?
o Anser ni att sociala faktorer (åldersfördelning, medborgarnas hälsotillstånd, säkerhetstänkande)
påverkat exportresultat? Om det är så, hur då?
o Anser ni att kulturella skillnader har haft någon inverkan på exporten? Hur?
o Hur tycker ni tillgång till teknologisk kompetens påverkat exporten?

5. Avslutande frågor
o Finns det andra faktorer förutom de ovan nämnda, som kan påverka exportresultat till den ryska
marknaden?
o Är det något mer ni skulle vilja lägga till?
o Får jag kontakta er senare i fall jag får ytterligare frågor eller behöver klara upp någonting?
o Hur skulle ni föredra att bli kontaktad (via telefon, via mail, något annat sätt?)

46

Fulltext02 PDF

Uploaded by

Copyright:

Available Formats

Fulltext02 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Fulltext02 PDF

Uploaded by

Copyright:

Available Formats

BACHELOR THESIS

Factors influencing export performance

Bachelor of Science in Business and Economics

Luleå University of Technology

Madsen (1993) found that such export barriers, as physical distance to export market or physiological

SUCCESS FACTORS BARRIERS

It is important to know the local market, there are differences and the products cannot be sold to all

A company that transports its production to the Russian customers is recommended to hire a

You might also like

Fulltext02 PDF

Uploaded by

Copyright:

Available Formats

Fulltext02 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Fulltext02 PDF

Uploaded by

Copyright:

Available Formats

BACHELOR THESIS

Factors influencing export performance

Bachelor of Science in Business and Economics

Luleå University of Technology

Madsen (1993) found that such export barriers, as physical distance to export market or physiological

SUCCESS FACTORS BARRIERS

It is important to know the local market, there are differences and the products cannot be sold to all

 A company that transports its production to the Russian customers is recommended to hire a

You might also like

A company that transports its production to the Russian customers is recommended to hire a