This 30-page master's thesis explores the strategic dilemma between internationalization and localization for SMEs, illustrated by a Norwegian company's expansion into China. Localization involves organizing operations primarily within local markets rather than abroad. In contrast, internationalization denotes a growing involvement in cross-border activities that change a firm's scope and positioning (Lemaire, 2013; Chetty & Campbell?Hunt, 2004). Despite the increasing role of SMEs in globalizing economic activity, scholarly literature remains skewed toward large multinationals (Rutihinda, 2011). SMEs-defined by the European Commission as independent firms with fewer than 250 employees and less than 50 million in annual turnover-play a pivotal role in driving innovation, job creation, and wealth generation (Ruzzier & Konecnik). However, they often lack clarity on why, how, and when to internationalize (Senik).
This thesis critically examines the internationalization models for SMEs alongside localization strategies. It investigates triggers and motivations for going international, the theoretical frameworks underpinning these strategies, and the key internal and external factors influencing both paths. Strategic planning emerges as essential: setting long-term programs, organizational goals, and implementation plans to guide SMEs toward performance improvement (Stonehouse & Pemberton, 2002; Wang et al., 2007).
To shed light on strategy selection, the thesis poses the following research question: Should SMEs internationalize or localize—and under what conditions? The study culminates in a case analysis of a Norwegian firm entering the Chinese market, highlighting the decisive factors shaping its strategic choice.
Detailed Outline
I. Internationalization as a Strategy
A. Definition
B. The Internationalization Process
C. Limitations
D. Commercial Strategy
II. Localization as a Strategy
A. Definition
B. Advantages and Processes
C. Determining Factors
D. Organizational Requirements
III. Case Study: A Norwegian Company
A. Profile and Strategic Approach
B. Influencing Factors Behind Its Decision
C. Internationalization Strategy Applied