How far east? : a study of the choice between outsourcing markets

Sammanfattning: Outsourcing is an important subject in the industrial business. Most of the companies in Sweden have some sort of outsourcing relations with foreign countries. The last decade many Swedish companies have moved their production to China through outsourcing relationships. In the recent years there are signs of a shift in the outsourcing trend. The trend includes Swedish companies to move their production from China to closer markets, for example,countries in Eastern Europe.This is mainly caused by changes in external factors, such as increasing transportation cost, increasing labor costs in China and the lack of flexibility have made companies reorganize their production alternatives. The purpose of this dissertation is to explore the factors that lie behind the decision to outsource and if there are any differences when it comes to the outsourcing process depending on the market.The research was conducted through interviews with companies with existing outsourcing relations in those markets. The purpose of the interviews was to obtain an insight of the outsourcing process, how factors importance vary from situation to situation and what complications that have occurred.The result shows that there often are more complications with China than with Eastern Europe. That smaller companies seems to have more difficulties when the outsourcing relations with China are established. The result also indicated that if flexibility and speed-to-market is important parts of the companies’ business model it is more likelythat an outsourcing relationship with Eastern Europe will be beneficial.The contribution of the dissertation mightbe of importance for smaller companies who are in the process of outsourcing or consider to start an outsourcing relationship with a foreign market.