Title: SME business models in global competition: a network perspective

Authors: Mika Westerlund, Risto Rajala, Seppo Leminen

Addresses: Department of Marketing and Management, Helsinki School of Economics, P.O. Box 1210, FIN-00101 Helsinki, Finland. ' Information Systems Science, Helsinki School of Economics, P.O. Box 1210, FIN-00101 Helsinki, Finland. ' Laurea University of Applied Sciences, Vanha maantie 9, FI-02650 Espoo, Finland

Abstract: The globalising competition affects the business models of both small and large enterprises. The present study examines the responses of industrial Small- and Medium-sized Enterprises (SMEs) to the globalising competition through two constructs: 1) the nature of offerings; 2) the collaboration strategy that is pursued. The paper presents an explorative quantitative analysis based on a survey of 91 firms. The results suggest that firms emphasising the international expansion strategy distribute standardised offerings with additional services, provide tailored offerings through international multitier networks, or specialise in customer-specific offerings with additional services through dyadic international relationships. Conversely, a fourth group of firms responds to the globalising competition by providing basic offerings for the domestic market through dyadic relationships. The main conclusion is that a firm|s response to globalisation is closely connected to its business model, which is manifested through the firm|s networking strategy and the nature of the offering. Moreover, the business model seems to affect firms| profitability.

Keywords: networks; globalisation; international business; SME business models; SMEs; small and medium-sized enterprises; collaboration strategy; dyadic relationships; networking strategy.

DOI: 10.1504/IJGSB.2008.017294

International Journal of Globalisation and Small Business, 2008 Vol.2 No.3, pp.342 - 358

Available online: 22 Feb 2008 *

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