ABSTRACT This study addresses the dynamic interaction of strategic alliances (SA) on innovation (IN), product development (PD) and organisational performance (OP) in the Indian small and medium enterprises sector. Three empirical studies (Study 1: N = 170; Study 2: N = 185; Study 3: N = 200) were conducted to test the impact of SA on IN, PD and OP. The questionnaire was distributed to the top- and middle-level managers in Indian SMEs. Furthermore, we applied regression and correlation analysis to explore the relationship between our study variables. The result of Study 1 indicates that there is a significant relationship between SA and IN. In addition, resource integration (RI) plays a significant mediator role between SA and IN. The result of Study 2 indicates that there is a positive impact of SA on PD. In contrast, knowledge sharing (KS) has an insignificant effect on the relationship between SA and PD. The result of Study 3 reveals that there is a positive impact of IN, sustainability (SU) and environmental factors (EF) on OP. This study provides a critical and practical contribution to SA by examining the impact of SA on the organisational performance development processes (IN, PD and OP).