The dynamics of internationalization of the manufacturing industry in China a case study how networks affect SMEs' global strategies

Abstract

The globalization drives SMEs (small and medium-sized enterprises) — like big enterprises — to enter and act on foreign markets. Due to their limited resources SMEs are acting different compared to their big counterparts. Networks play a major role in the internationalization process of SMEs. Many studies have shown how networks affect the pre-phase and first foreign market entry but do not investigate how the internationalization progress continues. This study takes a closer look at the further internationalization process and shows how knowledge and experience are created for further market entries and how the additional knowledge influences the global strategy of SMEs in the Chinese manufacturing industry. Based on the knowledge management and the network approach this study uses a multiple case-study method to explore the knowledge absorption and strategy development which profit from the broad use of networks. The results of this study show that SMEs' networks play a significant role in the further internationalization process and influence the process. The SMEs' awareness of network relationships rises even though the use of network benefits happens mainly unknowingly.