Establishment of Swedish start-ups in Germany : A study of start-ups establishing in a foreign country

Background: Sweden and Germany are closely linked with one another, with cultural similarities, long history of trade and close geographic proximity. Germany is an attractive country for Swedish companies to establish in due to its central location in Europe and its position as Europe's biggest economy. The EU also makes Germany more attractive with the benefits that member states gain from their membership. There are cultural differences that can be difficult for Swedish companies to identify during their establishment. Purpose: The purpose of this thesis is to examine the barriers to entry that Swedish start-ups face when entering the German market. To mitigate the barriers, strategies and preparations for a market entry is examined. Method: The study was performed as a multiple case study conducted through a qualitative research strategy with an abductive approach. 11 semi-structured interviews were performed for the collection of empirical data. Conclusion: The results of the study show that Swedish companies are affected by liability of foreignness, competition and culture in several ways. Respondents described the competition on the German market as fierce. They also emphasise the importance of research prior to market entry. Another aspect is the importance of the geographical location of establishment. Germany should not be seen as one big market but as several smaller ones. Knowledge in the German language is also very important for Swedish companies, especially for communicating with domestic German companies. The main cultural aspects are the language barrier, differences in business structure and formalities.