In current fast-changing business markets, both in developed and developing countries, small and medium-sized enterprises (SMEs) are often struggling to become and remain competitive (Koporcic, 2020). SMEs differ from larger corporations not only in size and number of employees but also in technological and financial capabilities. SMEs’ digital capabilities are often weak (Taiminen & Karjaluoto, 2015), as are their corporate branding activities, resulting in weak market visibility and recognition (Koporcic, 2017; Merrilees, 2007). Hence, SMEs are struggling to innovate and remain competitive, which becomes even more acute during turbulent times (Koporcic, 2020, Markovic et al., 2021).
This poses a significant challenge as turbulence and disruption are increasingly emerging as the new normal. Already pre-Covid-19, “humanity face(d) significant challenges, such as climate change, increasing inequalities among countries and within societies, and the potential impact of new technologies” (Iglesias & Ind, 2020: 712). The Covid-19 crisis has further increased these pressures by forcing SMEs to move their interactions and communication with partners online, affecting their innovative capability, which, in turn, becomes crucial for their financial sustainability (Chesbrough, 2020). The Covid-19 crisis has also highlighted the pressing need for SMEs to manage and develop sustainable corporate brands (Koporcic & Törnroos, 2021), even if most SMEs cannot afford to develop detailed branding strategies, invest in branding communications, or employ brand managers (Krake, 2005).
There is a lack of academic research on those topics. Business network research (such as studies conducted by the Industrial Marketing and Purchasing Group; e.g., Håkansson et al. 2009) has neglected the importance of corporate branding, as branding was traditionally studied only in consumer-related research. At the same time, the literature on corporate branding has focused on competition between companies and the role of branding in eliminating competitors, instead of examining its importance for building bridges and improving collaborative activities between companies. Surprisingly, both research fields have focused on large companies, neglecting the importance of SMEs, although 99% of companies in most markets are SMEs. In addition, they focused mainly on a firm level of analysis, without properly acknowledging the role of individuals, who represent SMEs in their branding and networking processes (see more details in Koporcic & Törnroos, 2019b).
Interactive Network Branding
There is an acute practical need for SMEs to deal with these challenging areas, in order to survive and sustain their competitiveness in times of crisis, specifically by adapting their business strategies and relying more on strategic internal and external actions by individual managers (Koporcic & Halinen, 2018; Koporcic & Törnroos 2019a; 2019b). In order to achieve that, the concept of Interactive Network Branding (INB) was introduced (see Koporcic, 2017). As an interdisciplinary concept, INB combines: 1) business-to-business marketing discipline, with a specific focus on business network studies, and 2) brand management discipline, focusing on corporate branding, identity, and reputation. The INB is defined as “an intertwined process of networking and branding, in which companies develop their corporate identity and reputation while aiming to create a desired position in the network” (Koporcic & Halinen, 2018: 394). By adopting INB as a theoretical standpoint and incorporating views on sustainability (such as triple bottom line; e.g., Elkington, 2013) and innovation (such as open innovation; e.g., Chesbrough, 2020), we can advance the interdisciplinarity of the business marketing discipline and brand management, to achieve academic, societal, and economic impact. Thus, understanding how INB can be incorporated as a business strategy for SMEs, what are its benefits and challenges, and how can SMEs tackle sustainability and innovation to become competitive through INB, become crucial questions that need to be answered.
INB highlights the importance and role of entrepreneurs as key branding ambassadors in SMEs who interact with other relevant actors and act as boundary spanners in business networks (see e.g., an empirical study by Koporcic, 2020). Thus, one way for SMEs to be competitive in business markets deals with the ability to combine distinctive branding and networking activities executed and organized through their managerial representatives (Koporcic & Törnroos, 2019a; 2019b). As Iglesias and Ind (2020, p. 711) argue: “Leaders also need to promote an open organizational mindset that sees all stakeholders as relevant potential collaborators so that they can orchestrate a strategic collaborative innovation network, capable of fostering competitive advantage”. However, SMEs should not only acknowledge the importance of different collaborators, but also use this as an opportunity to positively influence, together with other firms, sustainability issues of business markets (Edinger-Schons et al., 2020, Koporcic & Törnroos, 2021). This is becoming increasingly relevant, as we have witnessed the emergence of rapidly changing environments. Hence, it is argued that innovation and sustainability can be implemented through INB, to allow SMEs to become competitive and to engage with current as well as potential business partners, or even competitors, in closer interaction, value co-creation, and innovation. As Lipiäinen and Karjaluoto (2015, p. 733) note: “Branding in the digital age not only requires strong internal communication and consistent external communication but also positioning of the brand in topical conversations.” This corroborates the idea of INB, where internal, external, and boundary-spanning interactions between firm representatives are ultimately influencing the creation of stronger corporate brands for all stakeholders involved (Koporcic & Halinen, 2018; Koporcic & Törnroos, 2019a; 2019b).
During the last eight years, the concept of INB has been developed. As a multidisciplinary concept, INB has covered business marketing and corporate branding literature. Going forward, the aim is to develop further INB as a business strategy for SMEs and achieve research impact in the following two novel areas: sustainability and innovation, while taking into consideration the context of Covid-19. INB, as a business strategy, can influence the financial performance of SMEs and, importantly, their competitive advantage, which is crucial for highly competitive and turbulent business environments (Markovic et al., 2021). Through INB, it is expected that SMEs will be able to ensure access to relevant resources, allowing them to innovate as a result of collaboration, while considering sustainability issues, and achieving higher competitiveness in the market.
About the author:
Dr. Nikolina Koporcic earned her Ph.D. in Economics and Business Administration in 2017, at the Åbo Akademi University. Currently, she is a Senior Researcher at Laurea University of Applied Sciences. In addition, she is the Visiting Assistant Professor at the Luleå University of Technology, the Adjunct Professor at the University of Turku, and holds an affiliation with Åbo Akademi University.
Nikolina’s research areas include co-creation of value, open innovation, corporate branding, entrepreneurship, business relationships and networks. In particular, she is studying the importance of Interactive Network Branding for small firms in business markets. Nikolina has published 15 peer-reviewed academic articles, 2 books, 7 book chapters, 18 conference proceedings, and 2 Laurea Journal articles. orcid.org/0000-0001-5050-3819
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