Internationalization of Service Business

Abstract

Service operations are a vital part of the Finnish equipment manufacturers’ business. They support machine sales and generate a considerable part of the revenue. Companies are looking for growth opportunities in the foreign markets, which usually requires resources. The reason for growing can be the saturation of the existing market areas or willingness to increase turnover. Need for service has increased along with the quality requirements. In addition, technology has increased the requirements for proficient service. Internationalization also brings other kinds of challenges for which the companies need to be prepared. The purpose of the study was to determine what the biggest challenges for Finnish companies are when establishing a service organization in a foreign country and how to overcome those challenges. The theoretical framework was created around the elements that were relevant to the topic. It gave a good foundation for the creation of the interview questions. The empirical research was implemented by using the qualitative approach. Five experts were interviewed, and they were selected based on their long experience in international operations in different Finnish companies. According to the results, the main challenges for a service organization are cultural differences, lack of experience and skills, regulations and laws, product specifications and pricing. Those challenges can be overcome with a good strategy and proper preparation. With a good entering strategy, a company can expand more easily, learn and use the process in the next entering projects. The author’s recommendation for further research are right path selection in market entry, how to get people committed to the company and strategy for spare parts stocks.