Network Approach

   We found that this hypothesis is valid to some extent for the studied companies. Mr. Hermansson, at Alfa Laval, states that the company is engaged in different networks. Alfa Laval has a network with Statoil, where the main reason is to lower costs and to gain market shares. Further reason for this company to be involved in networks is R&D and Mr. Hermansson states that this is an important factor. R&D is a recurring statement for involvement in networks and both Perstorp AB and Backer AB stress the importance of this factor. Another recurring factor for the three largest companies is cost savings and reducing costs. Perstorp AB also engages in networks due to factors as lobbying and developing common rules for health and safety preventions. Backer AB participates in networks to gain knowledge and protection of the environment. This company is the only one to state that co-operation against common rivals is a reason. To gain further market shares is another reason. Backer AB is involved in a network with its customers since the products are highly customer adapted. The company sometimes needs to acquire technical know-how from its customers to be able to serve them with the right products. According to the owner of Kron International, Mr. Ahlberg, this company does not engage in any formal networks. The other small company, Furninova, is engaged in a local network in order to gain information about foreign markets and potential customers.

   To conclude, we found that a very important reason according to the interviewed persons for engaging in networks is to reduce costs. Only one of the interviewed persons stated that co-operation against common rivals was of importance. Other influencing factors of great importance, mainly for the technological companies, were R&D and to co-operate for environment and safety preventions. As Oliver stated cited in Ebers, 2002, to co-operate for environment and safety preventions, for example ISO-certification, may be a form of necessity for engaging in networks. Necessity is distinguished as companies that are required by law or regulation to establish relationships. Oliver also talks about reciprocity, which is when companies co-operate to benefit from common goals or interests. An example of this may be companies' engagement in networks for R&D.

   This hypothesis has some validity in our study but has not been of crucial importance. Mr. Hermansson states that social network was of importance when Alfa Laval entered the Russian and Chinese market through joint ventures. The company entered these markets earlier than its competitors due to the contacts of the Rausing family. Without these contacts these market entries would have come far later. In order to gain new market information Alfa Laval is engaged in a network with Frost & Sullivan that works interactively with clients to develop innovative growth strategies. Alfa Laval is at the introducing stage of a new customer-relationship programme for closer contact with its customers. A current customer network Alfa Laval has is with Statoil. Further reasons for network engagement are to lower costs, gain access to market shares and R&D. We found that the same reasons are applicable on Backer AB. The most important motive for engaging in networks is a close co-operation with customers in order to adapt products in accordance with the customers' needs. Tightly structured networks with customers have 'forced' Backer AB to follow customers to China and the Baltic market. The same reasons apply to Perstorp AB as for Alfa Laval but for Perstorp AB social networks do not seem to be important for the company's internationalisation process. The motives for Furninova's engagement in networks have mainly been social, which has led them to further expansions in the Baltic market due to contacts gained through the Polish facility. Most of the social networks are developed through trade fairs. Kron International's development in the internationalisation process does not seem to have been dependent on networks according to Mr. Ahlberg.