SMEs’ alliance portfolio management capability: Strategies for dealing with larger partners

To form alliances is an important strategy for small and medium enterprises (SMEs) to develop, and acquire resources, and to survive. SMEs often need to cooperate with larger organizations with more power, which means that it is crucial to avoid being locked-into the partner’s value chain or locked-out from the system or market. SMEs therefore need to develop a portfolio of alliances to balance and sustain their relationship with larger firms. The purpose of this chapter is to examine the alliance portfolio capability SMEs need to manage their relationships with larger organizations. To address this, three case studies of high-tech SMEs in the ICT industry are analyzed. They manage their alliances by moves and countermoves and by developing warding, agility, balancing, portfolio proactiveness, and awareness to remain an independent firm.