Chapter 9: The Role Of Strategic Alliances In Developing Strategic Alignment In SMEs

The particular concern of this chapter will be to discuss the significance of strategic alignment between a firm’s competitive strategies and its internal possessions (i.e., resources and capabilities) in the context of small and medium-sized enterprises (SMEs). It seems sensible to ask how these firms acquire and develop their resources and capabilities in such a way that they are aligned with their competitive strategies, and subsequently enhance their firms’ competitive position. While the fit between a firm’s strategy and its internal and external factors is a prerequisite for maintaining its competitiveness, SMEs face challenges in acquiring adequate resources and capabilities to establish a strategic alignment, owing to their fewer resources and capabilities. Given the SMEs’ have limited resources to initiate and drive operational and strategic changes that fit both their internal and external constraints, this chapter aims to suggest strategic alliances as a way SMEs can gain a sustained competitive advantage. It has been argued that such strategic alliances may fulfill the primary objective of achieving competitive advantage, by developing a symbiotic relationship between their businesses and the (internal and external) environment. However, this chapter will evoke that strategic alliances per se may not create competitive advantage; rather, competitive advantage can be obtained through the capacity of a SME to align its externally competitive position with its internal possessions through a proper use of strategic alliances.