SME business models in global competition: a network perspective

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.