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Regional, national and international networks: the suitability of different competitive strategies for different geographic profiles
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Abstract(s)
The continuous capacity of firms to learn is seen by many scholars as the critical solution in order to avoid firms from becoming locked into obsolete technological and competitive trajectories. This is a very common tendency, particularly in peripheral areas and/or labour-intensive industries.
Networks are often seen as the channel to overcome the risk that firms may become rigid. By accessing other markets, assets and technologies, firms free themselves from their own limitations while following the technological trajectories of their competitors. In this paper, we approach the issue with respect to the relation between the competitive strategies of small firms and their networking profile. We report the results of the application of a common questionnaire to a sample of 165 SMEs from labour-intensive sectors belonging to the following southern European areas: North (Portugal), Valencia (Spain), Macedonia (Greece) and South Italy (Italy). Using multivariate statistical analysis, the firms were grouped according to the use of regional, national and international geographic scales for supply, distribution and sales networks. For each one of them, competitive strategies related with market, investments, technology and training were analysed. Our results allow us to observe that competitive strategies vary across the three groups, indicating that there is a relation between the capacity to improve the geographic scale of networking and the capacity to strategically react to market changing conditions. While the related literature confirms the advantages of networking for the competitiveness of firms, we conclude that not all firms have the ability to develop international or even national contacts. Firms with restricted backward and forward linkages are also the ones with lower technological, training and innovative performances. Another important and related insight regards the requirements of going global: the network scaling-up is related more with quality production, than with scale economies. The exploitation of marketing networks depends heavily on the openness towards new opportunities which, in turn, depends on the knowledge stock of firms (Cohen & Levinthal, 1990) and on the empowerment of employees to pursue it (Lechner & Dowling, 2003). The resource-base of firms is both an input for and an output of networking activity, and that can be either a vicious or a virtuous cycle.
Description
Keywords
Firm-networking Manufacturing Firm strategies
Citation
Cesário, M.; Vaz, M. T. N. Regional, national and international networks: the suitability of different competitive strategies for different geographic profiles, Trabalho apresentado em 15th Uddevalla Symposium 2012, In Entrepreneurship and Innovation networks, Faro, 2012