Networks, business models, and competitiveness in small Finnish firms

Abstract

Small firms must design business models that leverage the resources of others to succeed in domestic and global markets. This study investigates the variance in business models of small firms seeking to prosper through networking within an intensely competitive landscape. We use explorative quantitative methods to analyse the link between networking, business models and financial performance of 90 small and industrial Finnish firms. The results reveal five types of business models: two of them are oriented internationally and three are oriented domestically. We mapped these business model types within a financial outcomes matrix to capture the differences in business model performance and found that competitiveness and financial performance of small firms under globalisation depend on their business model and networking strategy. In particular, inter-organisational networking contributes to sales growth and international expansion contributes to improved profitability.