This bachelor of economics paper discuss that the increasing globalization has put the small companies in the Swedish textile and clothing industry in a situation where internationalization has become a necessity. Furthermore has the European Union lead to that this type of companies has to seek growth on foreign markets with great socio cultural distance from the home country, Sweden. Nowadays there’s no time to internationalize in the same course of action like before. Before, the Swedish companies begun their operations abroad in fairly nearby countries and only gradually penetrated more far-flung markets. Now this is no longer possible. Besides this, has the small Swedish companies in the textile industry developed strong brands with emotional value which complicates the situation of internationalization even more. At the same time as they face this challenge they are limited by their small resources.

This leads to the question at issue;

Which factors are important to small Swedish textile and clothing companies at establishment in countries that differs culturally from Sweden?

The purpose of the investigation is;

To map out and analyze small Swedish textile and clothing companies´ choice of establishment strategy in countries that differs culturally from Sweden.

The investigation is made as a case study. We have used interviews and questionnaires as the main form of collecting the data and information. Two small Swedish textile and clothing companies established in a culturally different country, Spain, have been interviewed. Other similar companies have taken part of the questionnaire survey.

In the theory part we review the following theories. We start by looking at the Hofstedes´ 4+1 model and the internationalization barriers according to Porter. The purpose of this is the importance of market knowledge. Then we study the Uppsala internationalization model, the international product life cycle and the network model which all describes the internationalization process. We also go through the new establishment strategies according to Porter and entry modes and factors that influence the choice of entry mode according to Hollensen. We have developed, on the basis of these relevant theories to the problem, a frame of reference which describes how this kind of companies should act when establishing in culturally different markets. The frame of reference states that a small Swedish textile and clothing company should know and understand the new market. First they should direct themselves to a specific and suitable segment, and then cooperate with other actors to gain market knowledge. Further they have to choose an entry mode, this choice is influenced by a number of factors such as firm size, socio cultural distance and international experience. This process should lead to the use of direct export through agents and distributors because of their market knowledge and the limited cost and risks which these bring.

We have developed our interview and survey questions on the basis of the frame of reference. The information is presented in the empirical part. It is furthermore analyzed and compared with the frame of reference. This led to the result which answers the purpose. The investigation compares the Spanish and Swedish culture and shows the main barriers and opportunities on the Spanish market for the small Swedish textile and clothing companies. It also demonstrates that the companies act as we advocate in our frame of reference when establishing in a culturally different market. The conclusion is that the most important factor is to create useful contacts with great market knowledge. Market investigations are too expensive and therefore the key to success lies in having good cooperation partners in the distribution. The investigation is an indicator of that the companies no longer follows the old school of internationalization.

Finally we discuss the subject and get to the conclusion that the theories of internationalization and culture within the business economics are obsolete and therefore it would be interesting with further studies within the area.