This study is an exploratory study on small companies to investigate and explain how SMEs in Surabaya build supplier networks and enhance dynamic capabilities. This study is important due to not many studies explaining how the strength of supplier's network strategy, the synergy of collaboration, and dynamic capabilities are able to explain the variations of performance through the role of strategies development. Based on 41 respondents from SMEs in Surabaya that participated in this study, there are several findings that need to be highlighted include: business development can be done by improving and evaluating suppliers' networks; collaboration with entry networks is very important in the development of SMEs; business development strategies planned and carried out by SMEs since business development must prioritize the role of partnerships and synergies between SMEs and suppliers; cooperative strategy with suppliers accelerates the innovation process undertaken by SMEs that lead to the acceleration of business development; SMEs need to collaborate with other companies to absorb new knowledge to increase their resources competence.
supplier network strategy, dynamic capability, business performance
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