Alliances amongst companies in the network model of international expansion

Abstract

The paper discusses the significant role played by alliances in the network model of enterprise internationalization. It presents definitions and a discussion of alliances, mainly non-equity ones, as a mode of enterprise expansion onto world markets. Against the background of theoretical deliberations, the size and structure of non-equity alliances is discussed as a means of international expansion with reference to information published by UNCTAD. Special attention is paid to contract manufacturing, offshoring services, franchising agreements and managerial contracting. In conclusion, it is proven that in the international expansion of enterprises, simultaneous use of various forms of engagement occurs, among which the significance of non-equity alliances based on partnership agreements is growing in popularity. The use of international contract manufacturing and offshoring services has become a broadly applied practice within numerous firms. International contract manufacturing of cheaper intermediate products and finished goods has spread in traditional sectors, mainly clothing and footwear, but also in modern sectors, such as the electronics, aviation and automotive sectors. The study conducted by UNCTAD concerning the choice made by enterprises as regards the mode of international expansion has proven that dynamic growth of mergers and acquisitions, as well as non-equity investment, took place between 2012 and 2014.