The Effect of alliances between SMEs and MNCs on their Performance: a Case Study of Bahraini SMEs

The Effect of alliances between SMEs and MNCs on their Performance: a Case Study of Bahraini SMEs




Chapter 1




1.0 Introduction

1.1 Background

Dynamic change has become the new face of the business as it has been adopted by most of the businesses in the world regardless of their size or operational strategies. Most of the businesses today want to have the exposure of the global market and reach most of the customers around the world and offer its services and products as well. The global market can be viewed as a wider market where the companies have to maintain the competitive advantage not only in the local market of its own country, but with the local market of the target company where it is going to offer its products and services. These are important aspects that every local and global companies focuses on before planning of going global.

Going global in the global market seems to be very easy and progressive for any company but it has several challenges that the companies have to face in order to have the greater exposure of the market. In order to obtain the standards of the global market, the company has to be prepared to compete with the companies that also have access to the same market and might be operating within the same market for many years. Then the main question here is that how the companies who are thinking of going global should be adopting strategies that can work for them.

It is necessary for the companies to go global as well because its need of the market and the customers as well, because the demands and the dimensions of the market keep on changing. It can be said that for the survival of the company, it is important to adopt the trends of the market and be ready about how it is going to evolve in the future. Marketing can play a role in helping the organization to go global and offer its products to the customer, but it will be for the limited time as in future, the company will have to move in the targeted country where it finds most of the customers in the foreign land.

One of the ways that can help the companies to land in the global market is by formation of alliances of the Multinational Corporations (MNCs) with the Small and Medium Enterprises (SMEs). It can be a great benefit for both of the organizations. It is because the MNCs might be looking for entering in the new market and it will have to go through an extensive research and setup before going to a new market and have its new business plans there. However, if MNC considers partnering with the SMEs who has knowledge about the local market and knows how to deal with the targeted market then it can be an additive advantage for the MNC. On the other hand, it will be a new experience for SME because it will be able to learn with the large MNC Corporation and learn new practices and business approaches that are adopted by such large organizations.

There are times when the entrance of MNC in a new market is considered to be the death of SMEs, it will offer a different perspective to the market that the alliance between the MNC and SME will be for the benefit of the companies and the market as well. It will also ensure that the MNC and SME alliance will be staying in the market for longer and they will be in competition with other companies in the market. It will not be the source of vanishing of SMEs industries from the society but will be an additive advantage as it will be experiencing new technology and industry that they might be working in order to survive for longer period in the market. There are certain things that are needed to be considered while talking about the alliances of MNCs and SMEs so that it could be clear that if this alliance would be successful or not.

Alliance between SMEs and MNCs will be beneficial for both or it can be said that it will be win situation for both. SMEs will be able to get funding, resources and access to more information when they will be in alliance with MNC. This will let the SMEs to research more on the development of products and will be able to introduce its innovation to the market. It will also help the SMEs to get exposure of the global market as its products will reach global market with the network of MNCs. On the other hand, MNCs will find a new division that can be integrated with its already built corporation and will find a local manufacturer in the targeted market. MNC will be able to analyze the local market and reach more customers as it will be having its collaboration with the local company. This research will focus on how the alliance between SMEs and MNCs will be beneficial for both of them. Also, this research is focused on how MNCs should be selecting from SMEs candidate before forming alliance with it.

1.2 Problem Statement

The Government of Bahrain has pursued a raft of measures to ensure that it promotes SMEs growth and incubation. These include the Investment Fund Account (IFA), tax reduction, tax exemption, tax band reviews, and the writing off of tax arrears up to March 2009. SMEs on the other continue to pursue private policies to ensure that they can go through the tough economic and business times and conditions. Among the private moves made by the SMEs to increase their business profiles are the forays to enter into alliances with the MNCs through seeking business contracts, seeking licensing on activities that the MNCs can provide licenses on, merging with MNCs on various fronts to build business links which would see them expand and realize growth, and through seeking franchising again still to build business links which would see them expand and realize growth.

While some of these alliances with MNCs have been fronted as symbiotic and based on mutual benefit, other studies have perceived them as predatory with the MNCs exploiting the SMEs and thus slacken their growth advance. It has also been argued by other studies that SME/MNC alliances may kill innovativeness because the SMEs rather become under full control of the MNCs and thus redirecting the initial business intentions. In the same note, other studies have rated the SME/MNC alliances as an opportunity for the SMEs to seek budding and incubation through utilizing the pool of expertise and financial resources that the MNCs have. Given these contrasting pool of literature on the way SME/MNC alliances affect the business outcomes for SMEs, it requires demystification the real position for the Bahraini SMEs.

1.3 Purpose of the Study

This study purposes to find out the way in which the alliances between SMEs and MNCs in Bahrain can affect the business outcomes of such SMEs. The study focuses on the formation part of the alliances and its impact on the business operation. A study of this kind will bring to light the real beneficiaries of the SME/MNC alliance outcomes and will add to the existing pool of literature to enhance understanding related to this field of study.

1.4 Research Objectives

The main objectives of this research is to find out what are the possible outcomes that the MNCs and SMEs can obtain by getting into alliance with each other. It is sure that if the companies are agreeing upon getting into alliances then there will be mutual benefits for them. If not mutual benefits, each company will be able to acquire its objectives with the help of formation of alliance. On the other hand, in forming alliance between MNCs and SMEs it is mostly debated that either companies should be accessing the knowledge base of the other company or just acquire the knowledge. These are both different concepts, because in alliance the companies agree to share their knowledge so that they can work together in order to form new products and conduct future researches.

The research also focuses on finding the importance about the selection of SMEs by the larger corporation because that will be always in the greater governance position in the alliance with SME. It means that larger corporation will always be in the deciding position before the alliance and during the alliances as well. The main thing to find out in this aspect is that how successful such alliances can be where there is no equality between the SMEs and the larger corporation. As the larger corporation will be holding larger knowledge base and it will give them the priority over SMEs then how come such alliance will be successful in attainment of objectives?

The research will also focus on testifying either the prescribed procedures for the selection of the SME will be successful or not because there have been some defined framework as well that are said to be successful in the adoption of alliance between the companies. This research is very important as it will be adding more knowledge about the alliance between MNCs and SMEs and what kind of requirements are considered when it comes to formation of alliance.

1.5 Research Questions

The research is focused on the formation of alliance between MNCs and SMEs on the basis of performance and it is important to know about these aspects in this age of globalization. In this age many companies want to go global so that they can reach to global customers and get rid of the shackles that might hinder in offering their products and services to wider audiences. The research must answer some of the questions so that it is able to have its importance in the literature and further researches could be based on the findings and results of this research.

  • What is the effect of MNCs and SMEs alliance on business performance?
  • To what extent the alliance can affect the market share, Competitiveness and financial performance of the company?
  • Which type of alliances has more impact on the relationship between SMEs and MNCs?

1.3 What changes should be implemented to improve the achievements of the alliance?

These questions will lead to further investigation in this research relevancy of the alliances between SMEs and MNCs with the help of some examples that already have been implemented on the basis of aforementioned literature. The literates discussed above seems to be favoring all the aspects of the research questions that we have mentioned in relevance to this research.



1.6 Research Hypotheses

The base of the research is to find out the impact of the relationship between SMEs and MNCs on the business operation. In this research, it is assumed that the formation of alliance between SMEs and MNCs will be the best form of alliance because it will be equally beneficial for both levels of organization. The MNCs will able to benefit from SMEs to gain access to international markets which MNCs has minimal knowledge about. On the other hand, SMEs will benefit from various factors such access to capital, experience and business reputation. The relationship is win-win situation for both MNCs and SMEs, but at a common point both will be getting best of the advantages they can imagine from this alliance.

The formation part of the alliance is a very critical for the future of the relationship as it will govern the way the business will be done during the alliance. Also, it has a direct effect on the success of the relationship.

The research focus on three important dimensions which are assumed to be affected mostly by the alliance and thus the success of the business or its survival. The first dimension is competitiveness as such alliance may ease the market access sometimes in aggressive competitive environment. The second dimension is the financial performance. Since every business objective is to improve their financial performance especially SMEs, it is important to study the impact of such alliance on the financial performance of the company. The third dimension is the market share which an essential factor especially for MNCs which is almost the main purpose for them to align with SMEs to access international market.

Therefore, the three critical dimensions is assumed to be the main affected factors by the alliance relationship. The focus is on the formation part of the relationship and how it impacts the future operation of the business. The study also assumes that the legal aspect and the market barrier for partnership or non-equity alliances in Bahraini market will remain the same the during the study period.

1.7 Importance of the Study

The literature review shows that there is not much research available relevant to the subject and it is important to conduct research on the subject. The research in this subject will be helpful for the future studies as it will highlight different aspects of the alliance between Multinational Corporations and Small and Medium Enterprises. This research will work as a future direction to conduct more research in this subject that can be useful for the business studies. It will also serve the companies and SMEs who are looking forward to form alliance with the SMEs.





Literature Review

Importance of Alliances:

There are few researches conducted on the topic of alliance between MNCs and SMEs on the basis of their performance. It might be because the trend has not been adopted by most of the companies because of certain reasons. The main reasons that can be obvious regarding the sharing of information and knowledge is that the MNCs have to share their knowledge with the SMEs in order to make the alliance work properly. If there is no sharing of knowledge and resources between MNCs and SMEs, then there will not be beneficial results of such alliances. SMEs will be looking forward for the alliances because it will get to use the resources and knowledge of MNCs that might be out of reach for SMEs because of its limited resources. Therefore, this chapter will focus on previous studies conducted about SMEs and MNCs alliances and the effect on their performance in term of Market share, competitiveness and financial performance.

One of such study has been conducted by C. De Mattos, T. F. Burgess and N. E. Shaw relevance to the alliance of the SMEs with the Large Emerging Economies. The study highlights that why the large emerging economies of LEE are inclined in looking forward for alliances with the SMEs and what are the interests of SMEs in such alliances with the large economies. The researchers have focused on only factor that might be attractive for the SMEs from the developed countries as an attraction for LEE to have partnership with them and that is the developed Research and Development department. The theory of their research was based on the framework of alliances by the Grant and Baden-Fuller presented in the year 2004.

They have highlighted the reasons why small firms of SMEs will be interesting in forming alliance with the LEE, and the main reason they highlighted in their study is that the small companies will be looking forward to gain access to new resources and developed knowledge that the LEE economies will offer to them. It might be somehow challenging for the SMEs as well to share the knowledge that they have developed from years of efforts to share with LEEs, but it will be for their benefit as they will also get to know about the more advanced knowledge and resources they might get to use in order to enhance their research and develop something more accurate and that can be useful for both SMEs and larger economies (C. DE Mattos, 2013).


Market Share

As the writers have suggested that R&D is the most important aspect for the formation of alliance, they have also highlighted some of the specific reasons that explain the main reasons behind these alliances. The first factor that might be interesting for formation of alliances between SMEs and MNCs is innovation.

SMEs who have focused on the innovation of one or more than one product are mostly the attraction of alliance with the larger economies because of their knowledge and products they have developed. It is because the economies find a future benefit from the recent investment in the company’s that they can achieve with only investing money in the smaller organization and they will not have to go through the R&D phase for the development of new product. This provides an instant access for a larger market share.

The second factor that might be an influencing factor for the formation of alliances between SMEs and MNCs is the capability of the SMEs that they might have acquired with their focus and research on specified products. Capability means ability of the SME and the research they have put in specific product of technology. The capability of SME makes them suitable selection for MNCs to make alliance with them. These SMEs are more focused on the research on specific technologies that can offer a better product development in the future. It can be beneficial for both as SMEs will get to access the resources that will help them in continuing their research and development of the products and the MNCs will not have to worry about setting up things from the start (C. DE Mattos, 2013).

The third aspect highlighted is about the awareness of the company that it has come to know about the obstacles that it can face in the development process and it will be non-cost at all for the products and developments done within the company. The awareness means that the company is well aware of all the obstacles that can come to its way because of the experience it acquired while working in the industry. It helps the alliances for both organizations because they already know how to handle different issues. The writers also identify that it is better to make use of the available resources that are being offered by the organization rather than acquiring those resources. These factors can help SMEs to have reduction in their costs because they will be able to gain access to resources and information of MNCs. It will help them to expand their research as well. On the other hand, MNCs will be able to have more market share with the introduction of new products being developed by SMEs.

It implies that when there is increment in the benefits for association with the presentation of new items, it will offer ascent to between authoritative partnerships. It is on the grounds that there will no expansion in the opposition yet in the items. In addition the outside learning from other association and asset will offer upper hand to SME. It likewise proposes that the worldwide action of the SMEs for shaping organization together has been advantage for both as it can offer money related execution benefits for advancements (Pangarkar, 2008). There have been diverse reports pertinent to the issues identified with the accessibility of fund in the development and new item presentation. There are some non-monetary impediments in the new item advancement that incorporate; residential directions and control, and absence of business person environment (C. DE Mattos, 2013).

Market share is measured either by calculating the turnover or the production’s unit of a specific company. This figure is essential as it provides the size of business that a company can acquire in a specific market. It is important for the company to realize that market share should be with enough size to support the business of the company. Also a clear vision about the market share will allow the company to know the number of units required to produce in order to financially break even (Wolfe, 2006).

Competitiveness & Financial Performance:

Competitiveness is very important factor for SMEs in order to get their alliances with MNCs. It enables the SMEs to bring innovation in their products so that they could be attraction for MNCs and can be suitable candidate for alliance with MNC. This trend in OECD and non-OECD countries is expanding and this pressure is not limited to certain organizations in countries but it widely applicable to all countries and types of organizations. The international organizations are also forcing the SMEs to bring betterment in their competitive position within the market. The main focus is on development of competitive advantages that is not to be copied by any other company to gain more market share. It will not only impact the new SME but will have influence on the existing SME network as well (, 2000).

Recently in international economic relations, competitiveness has become a very essential factor for indicating the performance of the organization.

Miche`le O’Dwyer and Eamonn O’Flynn have discussed the formation of alliance between MNCs and SMEs. They have highlighted in the very beginning of their article that very much attentions has been given to the topic of the formation of alliance between SMEs and MNCs, and in this alliance the attention given to the transaction cost involved and the       knowledge based imperative between organization. It means that on the basis of knowledge base and the transactional cost, the governance policies have not been defined properly when getting in two alliance. They have focused on the reformation of the governance model in terms of the knowledge base and the cost between the organizations when forming an alliance between them.

There is emphasis on the formation of policies that can offer a better way to define the governance over the alliances between SMEs and MNCs on the basis of knowledge base. They have presented a model that can be best applicable in this situation and balances towards the selection of the governance model and the relationships that will exist between them. This can be explained in more simplified form that it will let the organizations to have a clearer view that either they want to access the knowledge of other organization or acquire that knowledge.

The researchers have shown with the help of studies that there are two factors that govern over the governance policy in the formation of alliance that are supplier appropriation concern and the absorptive capacity. Here the absorptive capacity of the recipient’s knowledge is not based on the fact that either the organization has the capability and capacity to absorb the knowledge, but it is more focused on finding the fact that if the company has the intention to acquire the knowledge or not. The intention of the recipient of the knowledge is more important in this aspect as compared to other factors that are involved in the definition of the governance policy (O’Flynn, 2005). There is also another interesting point in the formation of alliances between MNCs and SMEs, and that is MNCs want to have the superiority in their knowledge and research in both areas; quantitative and qualitative research. The acquisition of knowledge and the capability of organization is focused on its ability to have its competitiveness in the market. If the organization like SMEs is able to acquire the knowledge then they will be able to gain competitive advantage over other SMEs as well. It will be producing more valued products to be introduced in the market with the amalgamation of resources of MNC and research on specific product by SMEs. This acquisition of knowledge by SME will not only help it to grown but also help MNC to capture more market share as compared to its competitors.

It is because it will help the MNC to maintain better governance mode over the SMEs so that it can be in a position to have alliance with its strategic goals. The other side that MNCs might be ignoring that the formation of alliances is also based on the complex objectives that they want to obtain and those objectives are based on the benefits of both; MNCs and SMEs. If the objectives of the alliance are met then it means that both parties in alliances are being benefited from it. It is also shown that before getting into the alliance, it is better to know the strategic values of both MNCs and SMEs.

The alliance of MNCs and SMEs can be bolstered by the way that Molex that is second biggest provider of connectors on the planet is concentrating on keeping up its piece of the overall industry as being focused of all. There are two ways that the organization utilizing 12,241 individuals by decreasing expense by moving its generation to ease nations like Brazil, China and India. It is the main way that it has framed collusions with SMEs in these that can give minimal effort favorable position to the organization. The other way that the organization can keep up its piece of the overall industry is by presenting new items that can convey business to it. Molex investigation is additionally in light of the ability of the SME to retain the learning that it can offer. On the off chance that the SME is not ready to assimilate a lot of its learning at that point still those SMEs won’t have the capacity to manage its piece of the overall industry without upper hand over the other.

When talking about the dominant party who will be dominant in terms of providing the knowledge will be the MNCs as it will have more resources and knowledge as compared to SME. When talking about the motivation for getting into the alliances between MNC and SME, it is seen that MNC have the long motivation for this alliance to work out whoever SMEs are merely looking for shorter benefit that it will acquire by accessing knowledge and resources of MNCs (O’Flynn, 2005). The capacity of the absorption of knowledge is also compared in this study and the result shows that MNC have more capacity of absorbing knowledge as compared to SMEs.

This study highlights some of the important aspects that might be required and assessed by the MNCs and SMEs before getting into the alliances with each other on the basis of their performance.   This model can be best suitable or a frame that can be utilized for further alliances between MNCs and SMEs. It has highlighted important aspects of the alliances and what kind benefits the organizations will be able to extract from such alliance.  This framework works as a foundation or principle for SMEs and MNCs. If MNCs want to have alliance with SMEs it need to first focus on what kind of benefits it can derive from it. These benefits might include what will be the market share that MNCs will be able to have after alliance with SME and will it really workout for them. The analysis should also include the expected products and services that the MNC will be able to produce with this new alliance.

The importance of R&D has already been suggested in aforementioned study, and it seems that its importance cannot be ignored when talking about the formation of alliances between SMEs and large corporations. Keeeun Lee, Inchae Park and Byungun Yoon have also presented the theory of the selection procedures when it comes to larger corporation looking for alliance with SMEs. The thing to note is that why the larger corporations are looking for the alliance with SMEs, however they have the resources and knowledge that they can set up their own division. The answer to this question is that SME is the main driving force for the economy and it is said that staff of SMEs is 70% of the 49 million employees (Keeeun Lee, 2016).

It makes a larger contribution to the economy and the other reasons is the focused research on specific product or technology. The SMEs are more focused on the research of a single product or technology that makes it most suitable selection for alliance by the larger organizations or corporation. The trend of alliances might not be much in the market, but it is seen as a profitable investments by the larger corporations in SMEs and it has been successful that is why more organizations and corporations are looking for alliances.

This study likewise proposes that the organizations need to acquaint new items with acquire piece of the pie to have its aggressiveness alive. It expresses the case of organization who is producing semiconductors, ought to be concentrating on Internet of Things instead of adhering to cell phones since it is new in this time. It will have the capacity to enhance money related execution of the organization and furthermore have its piece of the pie predictable (Pangarkar, 2008). Discussing the cost lessening it is additionally conceivable with the assistance of open development that will likewise decrease the advancement taken a toll for the organization and they will have the capacity to make benefits. Keeping in mind the end goal to limit the value-based cost for organization it is conceivable by utilizing vital participation.

Alliance Formation Criteria

It is already suggested that why the larger corporations will be interested in formation of alliance with SMEs and why the SMEs will be interested in working with larger corporations who have more resources and knowledge than them. The researchers Keeeun Lee, Inchae Park and Byungun Yoon have proposed a procedure that is helpful for the larger corporation that they have to go through a procedure for the selection of an appropriate SME for forming alliance. It is because there might be several SMEs that might interested the corporation, but the selection of the best one should be ensured and for that they have proposed a framework that can help them in the formation of a beneficial alliance. There are several steps that might be involved in the selection of the appropriate SME, they have discussed them in detail. If the formation of alliances between them it to be formed then MNC should select the best SME that will be appropriate for it. It will be beneficial for selected SME as well because it will be getting finance for further research projects or ongoing projects. Most of the SMEs are not able to continue their projects or research because of lack of resources and finance, but alliance will solve their problem of finance and resources.

There are four steps involved in the selection of the appropriate SME for the larger corporation, definition of necessary technology, list of SME candidates, creating a table of probation and selection of SME candidate with the help of Bayesian network.


The first step that is the selection of the technology starts from analyzing the technologies that are being utilized in the corporation and market, then focusing on the selecting technologies that can be utilized by the corporation in future. The selection of such technology will the corporation also consider the benefits that it can obtain from it. The corporation draws all the technologies in the industries with the help of Technology Road Map. Then it focuses on which technology will be useful for the corporation and the secondary products that will be utilized with the help of same technology.

The second step in the selection procedure of SME is the selection of candidates that might be suitable for forming alliance with the corporation. In this regard the corporation focuses on two things of SMEs, the number of employees must be less than 500 that is also the requirement of SME and the second thing is the patent information because it can be helpful in identifying whether the company is able to form alliance with corporation or not (Keeeun Lee, 2016). It lets the creation of list of candidates that might be able to form alliance with corporation. The patent information will help the larger corporation to identify if it will be getting the proposed benefits from this alliance or not.

The next step is the creation of conditional probability test that is based on the history of the small and large corporation alliances and their results and it provides an analysis about the success of analysis with the candidate of SME. The fourth and the last step is the selection procedure with the help of Bayesian Network model. The candidates are ranked on the basis of portability tables designed in the third step of selection procedure. This last step determines which SME will be best suitable for forming alliance with the corporation as it has already forecasted some of the important information like what type of benefits the corporation will be extracting from this alliance and how successful this alliance would be.

Nerlita Masajo-Manalili has also presented a structure that can help in the formation of alliance and that structure works as guidelines for the formation of alliance between SMEs and larger corporations. It starts from the Need assessment where the MNCs also focus on what they are looking for that can be beneficial for them and in the next step it calls for key strategic consideration identification in which the companies are looking forward to focus on strategies that they will adopt while getting into alliance with the other company or enterprise.

The third step in this alliance formation is the identification of the roles that each corporation and enterprise will be taking up. The last step of this alliance formation is the evaluation to find out how successful this has been for both; SMEs and MNCs (Manalili, 1999). A better assessment of alliance between SME and MNC will be beneficial for both of them either it is cross border alliance or same region. It will help the companies to identify how much benefit they will be able to extract form this alliance. If the alliance seems to be for short time, then it must be avoided because it can cause financial performance loses to MNCs and their reputation for low assessment and techniques utilized for selected the appropriate SME (Pangarkar, 2008).

Types of Alliances

There are different categories and types of alliances that are formed between the SMEs and MNCs. The basic categories of alliances are joint ventures, equity strategic alliance, non-equity strategic alliance, and global and cross border alliance. Talking about the joint venture alliance, are formed with the help of two or more than two companies who might have the motives of forming a new market. The joint venture between the companies may be found in various forms like the majority of a company having more than 50% of shares, and the minority of the company having less than 50% shares of the equal shares of all the partnering companies forming joint ventures (Sepehri, 2011).

There have been many joint ventures that are based on 50-50 equal partnering of the companies like the one Peugeot group of France and Toyota group of Japan have. In this joint venture both companies were able to get benefit. Toyota was able to gain access to the supplier’s information in Europe with the help of Peugeot on the other hand, Peugeot got the information about the advancement in the technology by the Toyota company. The equity strategic alliance means the ownership of shares on relative basis. It means that the company might have lesser shares and the other will have greater number of shares.

The third type of alliance that is formed between the companies is the non-equity strategic alliance, and the base of such alliance is the agreements rather than the ownership of shares between the companies. These types of contracts are based on the information relevant to the suppliers and marketing purposes. One of such alliance is found in UPS and Nike, where UPS takes cares of all the supply chain operations of the company, either it is related to transportation of stock from warehouses to the outlasts or delivering the products to the customers, everything is managed by UPS (Sepehri, 2011).

Another type of alliance is global and cross border alliance that is appreciated all over the globe in different markets. Most of the larger corporation of the world in different region like to have this alliance because there are several benefits that they can have from this alliance. Global and cross border alliance lets the companies to have the benefit of avoiding fulfilling the licensing requirements, and be able to cross the barriers for import. They have already formed alliance in the target company and will be able to conduct trade in more free and progressive manner.

It also helps the companies to have the shared expenses when it comes to research and development about the new product. This is very beneficial for the companies as they will not be sharing only the resources of money, but they will have the opportunity to share the knowledge and other resources that can be helpful in better development of the new products. It is also beneficial for both companies as they will be easy to integrate into a new market with the help of an existing company alliance.

It gives them entrance to global market and alliance also helps them to attain competitive advantage in the targeted market. The targeted market is also able to identify the new company in reference to the alliance with the existing company. It can be seen that there are different categories of alliances that the companies can adopt at different level and same can be applied to the alliance between MNCs and SMEs because they are also looking for benefit of their own and such alliances are the best possible ways that the companies can be able to gain those benefits by forming the alliances that are not attainable specifically for the SMEs. It is not right to say that these alliances will always prove to be successful for both the partners, but it can be made sure by fair selection of partnering company that either the partnership and alliance will be successful or not and what type of benefits the companies will be able to extract as a result of this alliance at different levels.




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