This article critically evaluates the notion that strategic flexibility related to products, business relationships and networks is critical for international small and medium-sized enterprises (SMEs) attempting to differentiate their firms in foreign business relationships. A model is developed to investigate the interrelatedness of these types of flexibility and their discrete effects on business differentiation in foreign business relationships. It is used to analyse a dataset covering 314 Swedish SMEs; the types of flexibility investigated were found to have positive effects (direct and indirect) on differentiation in foreign business relationships.
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