The role of Strategic alliance in Strategic alignment between competitive strategies and resources in SMEs

The particular concern of this chapter is to discuss the significance of strategic alignment between a firm’s competitive strategies and its internal possessions (i.e. resources and capabilities) in the context of Small and Medium-sized Enterprises (SMEs). It seems sensible to ask how these firms acquire and develop their resources and capabilities in such a way that they are aligned with their competitive strategies and subsequently enhance their firms’ competitive position. Whilst the fit between a firm’s strategy and its internal and external factors is a prerequisite for maintaining its competitiveness, SMEs have faced challenges in acquiring adequate resources and capabilities to establish a strategic alignment, owing to their fewer resources and capabilities. Given the SMEs limited resources to initiate and drive operational and strategic changes to fit both their internal and external constraints, this book chapter aims to suggest strategic alliances as a way forward for SMEs to gain a sustained competitive advantage. It is argued that such strategic alliances have the potential to fulfill the primary objective of achieving competitive advantage through developing a symbiotic relationship between their businesses and (internal and external) environment. However, this chapter evokes that strategic alliances per se may not create competitive advantage; rather, competitive advantage can be obtained through the capacity of a SME to align its externally competitive position with its internal possessions through a proper use of strategic alliances.