Analyzing the Role of Dynamic Capabilities in the Internationalization of Gradual Global SMEs

Abstract

Internationalization represents an obligatory path for firms in order to compete and survive in the current competitive environment. However, many enterprises, especially the SMEs, sometimes lack the necessary resources to grow and succeed in international markets. Several authors argue that SMEs constantly need to create, adapt and reconfigure their relationships and network resources to remain competitive in an international environment, that is, they need to develop dynamic capabilities. The aim of this paper is to analyze the international growth of gradual global SMEs by adopting the dynamic capabilities framework. Through the case study of a firm from South Italy, this paper aims to analyze the role played by dynamic capabilities in the growth and success of a gradual global SME in international markets. The results show that the capabilities to perceive opportunities and threats in the international context, to seize opportunities through adaptation, reactivity and reconfiguration, have been fundamental for the international success of the company analyzed.

Influential dynamic capabilities and small and medium enterprises' internationalization success: mediating role of international entrepreneurial orientation

“…When it comes to different management characteristics required for the success of firms in general, especially in the case of internationalization, the "dynamic capabilities" of entrepreneurs are the most important. Tartaglione et al (2019) defined dynamic capabilities as an entrepreneur's ability to understand a firm's growth and survival. A firm's growth and survival within a dynamic business environment are ensured by its competitive advantages and firm performance, which can be obtained through dynamic capabilities.…”

“…Prior studies may not be sufficient to understand the internationalization of SMEs and the various factors affecting this. Tartaglione et al (2019) RIBS 33,1 argued that traditional theories regarding competitive advantages, such as the resourcebased view, are insufficient to explain the international success of SMEs. For conclusive and in-depth understanding, it is paramount that researchers explore how firms can use resources to outperform rivals, that is, firms' capabilities and competencies, which must be included in the analysis.…”

Exploring the Staging Patterns of MNC Entry to New Markets: The Resource Leverage Approach

“…In line with this, Madhok indicates that a frequent balance between exploitation and development of organizational capabilities is necessary for successful market entry of MNCs [31] . Also, some scholars view foreign market entry as an integrated process of both exploiting home-based knowledge and exploring host-country specific new knowledge [32,33,34,35,36] .…”