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Competitor Networks As A Mechanism For Internationalisation

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  • Political Science


Within the Ayrshire knitwear industry in Scotland, a group of small- and medium-sized enterprises (SMEs) have formed a network with the purpose of developing group branded products for export markets. The initiative was instigated by the Ayrshire Textile Group (ATG), which was created in 1991 as a partnership between Enterprise Ayrshire, a government funded body, and the local textile industry. This paper briefly reviews the existing literature describing the internationalisation process of firms (e.g. Johanson & Wiedersheim-Paul, 1975, Bilkey & Tesar, 1977; Johanson & Vahlne, 1977; Bilkey, 1978; Reid, 1981, 1983; Turnbull, 1987) and discusses why SMEs may consider networks as a means to developing international markets (e.g. Easton, 1992; Hakansson and Snehota, 1995; Johanson & Mattsson, 1988; Forsgren & Johanson, 1992; Coviello & Munro, 1995). The case study of the ATG empirically illustrates how network relationships facilitate foreign market development by SMEs, the role of enterprise companies in this process, and the problems such companies are likely to face. The paper concludes with a discussion of future directions of the research.

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