The role of cooperative alliances in internationalization strategy

Abstract

From the network approach, the purpose of this paper is to provide empirical evidence about the role of international cooperative alliances (CAs) in the decision of small- and medium-sized enterprises (SMEs) to internationalize and remain in the external market. To fulfill the proposed objective, qualitative research was carried out through analyzing two SMEs (case studies) in the Portuguese textile sector. Data collection was based on structured interviews, direct observation and some documental analysis. The results show that the analyzed SMEs internationalized immediately after their creation, with this decision not being influenced by CAs but rather by the founder’s role and above all by a saturated domestic market. Alliances are determinant in subsequent developments in the foreign market, allowing SMEs to reach new markets, increase their market share and consolidate their name in the international market. Thus, managers/entrepreneurs should adopt strategies that stimulate the firm’s expansion in the external market, prioritizing the formation of CAs with international partners. This study suggests that none of the dominant models can exclusively explain the internationalization process of the studied SMEs. Therefore, this research has implications for the recent stream of literature that argues for a holistic view of internationalization models, considering the arguments of all models instead of only one.