Background:  An increasing amount of research is identifying SMEs foreign market entry as being driven and shaped by network relationships. Whereas the relevance of networks in internationalization has already been established, the research of SMEs is limited compared to larger firms. Moreover, the importer’s perspective of the market entry is usually neglected, although in many cases proven to be crucial in forming the entry strategy. Hence, this research aims to include both the exporters and importers perspective when describing the entry processes of SMEs. In addition, the research aims to contribute to the limited research of manufacturing SME’s internationalization via networks. More specifically, the prefabricated wooden house industry will be investigated with Swedish exporters and German importers.

Purpose: The purpose of this thesis is to describe the influence of network relationships in SMEs foreign market entry from the perspective of both the exporters and importers.

Method: A systematic literature review served as a start to identify relevant internationalization theories.  It resulted in applying the revisited Uppsala model as the main theoretical framework. Based on the core arguments of the model, a questionnaire with semi-structured questions was created. Four interviews with Swedish manufacturing exporters and four with German importers were conducted. The insights derived from the interviews lead the researchers to expand the initial model with the findings from the research.

Conclusions: Only the relationship between exporter and importer was found to be significantly influencing the market entry, and not the other network relationships. Relationship elements such as trust, commitment and learning are significantly influencing the internationalization for both parts. It was also found that Economic fluctuations influence the market entry, especially with regards to the exporter’s entry decisions. Moreover, it was found that successful relationships are based on a mutual long term approach and that exporters make continuous market and cultural adaptations, while importers do not.  In contrast to the suggestion of the revisited Uppsala Model and most previous findings of SMEs internationalization via networks, determinants of market entry and selection were not influenced by networks, for neither the importer nor the exporter.