Introduction

The need for active engagement among countries in global trade has amplified the importance of the internationalization of small and medium-sized enterprises (SMEs) for scholarly exploration and practical application alike. The multifaceted nature of internationalization is manifested by the several approaches SMEs can adopt, ranging from exporting and licensing to joint ventures and wholly-owned foreign subsidiaries. While extensive research in this area has produced valuable insights, the context-specific determinants and challenges that SMEs face often exhibit distinct complexities contingent on factors such as industry, country, and market dynamics. Particularly in emerging markets, these dynamics take on a unique nature, intensified with regard to manufacturing SMEs. With their intrinsic operational complexities, manufacturing SMEs in emerging markets encounter challenges and opportunities bound to their specific sector, warranting nuanced examination and scholarly attention.

The extant literature suggests that internationalization can appear in various forms, with exports standing as the predominant approach adopted by SMEs (Jin and Cho 2018; Safari and Saleh 2020). Scholars studying the determinants of export performance argue that exporting is a complex phenomenon influenced by multiple factors (Chandra et al. 2020; Steinhäuser et al. 2021). These factors can be classified into two categories: internal (firm-specific influences) and external (environmental influences) (O’cass and Julian 2003). Internal factors include managerially controllable factors such as marketing mix variables, management characteristics, firm-specific variables, and export strategy factors (Beleska-Spasova 2014; Safari and Saleh 2020). The second category involves external factors that are environment-specific and managerially uncontrollable. These determinants are divided into industry-specific (e.g. technological intensity) and market-specific (e.g. channel accessibility and customer exposure). Other scholars cite legal, political, and cultural factors, for example, as common external factors (e.g. Johanson and Vahlne 1993; Knight 2003).

Considerable attention has been paid to SMEs exporting in different contexts highlighting that the determinants and challenges of SMEs exporting vary from one country, sector, or industry to another (Beleska-Spasova 2014). Furthermore, several studies have been published on SMEs in emerging markets, and most argue that they face different barriers from the ones facing their counterparts in developed economies, either because of the lack of internal resources or due to external barriers (Chandra et al. 2020; Steinhäuser et al. 2021). In addition, scholars suggest that, for these firms to succeed internationally, they should enter international markets by surmounting the barriers associated with doing business internationally and develop their unique enablers (Al-Hyari et al. 2012; Chandra et al. 2020). However, the literature remains silent regarding what constitutes the internal enablers by which SMEs sustain their exporting performance in the manufacturing sector in such emerging markets as the Gulf Cooperation Council (GCC) countries, particularly Qatar (Child et al. 2017; Elbanna et al. 2020).

Like most GCC countries, Qatar continues to depend on exports in the hydrocarbon sector, representing from 92% to 94% of the total exported commodities in Qatar from 2014 to 2018 (Qatar Development Bank 2020). The main export products from Qatar include liquefied natural gas (LNG); the country produces approximately one-third of the globally traded LNG volume (Qatar Development Bank 2020). Since the non-hydrocarbon manufacturing subsectors to the Qatar’s GDP are still underperforming, the country heavily supports these sub-sectors through several governmental export promotion initiatives (Qatar Development Bank, 2017). Aiming to advance the diversification of the economy, Qatar invests the surpluses generated from its hydrocarbon exports to support the non-hydrocarbon sector. This latter sector contributed an estimated USD 7.73 billion (equivalent to 41%) of the total revenues of USD 18.74 billion for the second quarter of fiscal year 2023. According to the Ministry of Finance, the non-hydrocarbon sector increased its contribution by 2.2% during the second quarter of 2023 over that of the first quarter (Qatar News Agency 2023). Furthermore, the SMEs sector, mainly non-hydrocarbon, contributes 10% of Qatar’s GDP and provides 15% of the employment, much less than the 30% and 71% observed in the Middle East and North Africa regions, respectively (Qatar Development Bank 2020).Footnote 1

This background shows the need to study the critical enablers which support SMEs’ export performance, particularly bearing in mind that non-hydrocarbon product exporters in Qatar are predominantly SMEs. Therefore, this study focuses only on non-hydrocarbon manufacturing SMEs engaged in exporting activities. Since this sector continues to evolve in Qatar, exploring the critical internal factors that bolster SMEs’ export performance holds substantial practical implications for the practitioners, researchers, policymakers, and government agencies responsible for SMEs support.

On a theoretical level, our study contributes to the limited conceptual and empirical research on SMEs exporting in emerging markets by identifying the critical internal enablers needed for better export performance. Most prior research has centered on the obstacles encountered during the exportation process rather than examining the facilitators of this procedure (Al-Hyari et al. 2012; Chandra et al. 2020; Vural et al. 2020). Nonetheless, a fundamental contention derived from these studies is that SMEs typically require enablers to effectively export to international markets. Therefore, we unpacked a unique set of critical enablers (that is, employees with networking skills, effective supply chain management, product diversification, digitalization, and market intelligence capabilities) which can be cultivated as the internal impetus for augmenting the export performance of SMEs. On a practical level, this research offers empirical insights into the distinct enablers in play that drive the export performance of non-hydrocarbon manufacturing SMEs in this less-researched emerging market. The significance of Qatar as our chosen focus of study is heightened by its representation of relatively understudied GCC countries, as noted by (Abu Farha and Elbanna, 2018). This aspect adds value to our research by allowing us to understand better prevalent management and business models adapted from the “developed” world.

This paper opens with a theoretical background (Section “Theoretical background”) and a review of the literature on the internal enablers that facilitate the successful internationalization of SMEs (Section “Critical internal enablers for exporting SMEs”). Then we discuss the study approach, sampling, the data collection process, and the analytical processes employed to interpret the interview data (Section “Methodology”). We present next the findings of the five key internal enablers that emerged from the data, which influence the export performance of manufacturing SEMs (Section “Findings”). Concluding the paper, we discuss the findings, implications for researchers and SMEs managers, limitations and future research suggestions (Section “Discussion and conclusion”).

Literature review

This section aims to provide a review of prior research on the factors that facilitate the export endeavors of SMEs. The discussion begins with a theoretical background, followed by an exploration of the literature on the internal enablers that facilitate the successful internationalization of SMEs.

Theoretical background

Several internationalization models and approaches are discussed in the literature. However, these models and approaches differ in their perspectives on the enablers or antecedents for the success of internationalization initiatives (Steinhäuser et al. 2021). We discuss the resource-based view, network approach, Uppsala model, and innovation-related models (I-models) as the theoretical lenses through which we explore the internal enablers of SMEs’ export performance because they together provide a holistic view of several critical enablers needed if SMEs are to engage successfully in exporting activities.

The resource-based view

According to the fundamentals of the resource-based view (RBV), a business’s ability to enter foreign markets and gain the competitive advantage needed for internationalization is determined by its sustainable and unique costly-to-copy resources and capabilities (Schu et al. 2016). On this basis, several scholars have argued that any SME holding bundles of inimitable resources has a better chance than others of successful internationalization (Chandra et al. 2012; Peng 2001; Cho and Lee 2018). The heterogeneity of SMEs and their operating environment, however, makes it challenging to identify and define the critical resources needed for internationalization (Chandra et al. 2020).

The network approach

This approach suggests that firms can conduct international operations successfully by becoming members of a network to the level where it offsets the liability of outsidership (Gronum et al. 2012). For example, Johanson and Mattsson (1993) argue that for firms to internationalize successfully, they need to invest in new networks, develop positions, and increase resource commitments to current networks. Network theorists see a firm’s internationalization as developing network relationships with foreign individuals and firms (Ojala 2009). Some recent scholars who tried linking the network approach with RBV introduced the “network resources” concept (Boehe 2013). In this sense, network resources (e.g., information, reputation, and political influence) are considered assets that can be leveraged through partner organizations, which initiate international opportunities (Zhang et al. 2016). In short, from a network perspective, internationalization can be implemented successfully by building network-based positions (Gronum et al. 2012), which can help overcome some of the problems of knowledge and technology as well as capital accumulation (Child et al. 2017).

Uppsala model

This school of thought which started in the Nordic countries in the early 1970s holds that accumulated knowledge in conducting international operations and business networks tends to increase the international involvement of firms in small incremental steps (Almodovar and Rugman 2015; Vahlne and Johanson 2017; Vahlne 2020). The main idea emerging from this school is that SMEs with market knowledge and business networks can offset the liability of outsidership when they go international (Vahlne 2020).

Innovation-related models (I-models)

Very close to the Uppsala model, the “innovation-related” models treat internationalization in its subsequent stages as something that makes each stage an innovation for the firm (Gankema et al. 2019). The central focus in this stream is exclusively on the export development process, particularly for SMEs. These models assume that individual learning and top management support are the most critical enablers for internationalization (Sommer 2010).

Critical internal enablers for exporting SMEs

RBV proponents assume that the bundle of resources and capabilities a firm possesses gives it the capacity to plan and execute its internationalization activities (Chandra et al. 2020). This bundle may include management skills and experience (Yamakawa et al. 2013), social capital (Prashantham and Dhanraj 2010), proficient human capital (Alon et al. 2013), innovation and technological expertise (Dhanaraj and Beamish 2003), as well as marketing competencies (Andersen and Kheam 1998). Other scholars suggest that R&D capabilities play a significant role in the internalization of SMEs by helping them take advantage of new market opportunities (Booltink and Saka-Helmhout 2018). Along the same lines, other scholars have focused on the importance of human resources (Harveston et al. 2000), connecting SMEs’ internationalization potential with managerial attributes – such as the educational level of managers (Bridge and O’Neill 2012), international experience (Child et al. 2017), work experience (Bianchi and Wickramasekera 2016), and managerial vision and learning orientation (Gentile‐Lüdecke et al. 2019).

Another stream in the literature attributes the success of SMEs in international markets to their networking capabilities (Gronum et al. 2012; Zhang et al. 2016). The fundamental premise here is that engagement in global markets is a cooperative endeavor, and SMEs find it more accessible to participate in networks than to operate independently (Coviello and Cox 2006). Furthermore, networking enables SMEs to internationalize by providing firms with the opportunity to imitate the practices adopted by their networking partners (Milanov and Fernhaber 2009). Imitating network partners diminishes the risk and uncertainties due to the lack of experience of international expansion (Child et al. 2017; Milanov and Fernhaber 2009). In addition, network collaboration and clusters for knowledge diffusion are believed to be crucial in creating globally competitive products (Torkkeli et al. 2019). Networks also permit trust and commitment to be built, which can play a vital role in the internationalization process (Johanson and Vahlne 2009).

Other enablers such as management experience, innovative products, and knowledge of foreign markets have been observed to support the success of SMEs in doing business internationally (e.g., Chandra et al. 2020; Freeman et al. 2006; Nakos et al. 2019). In addition, international experience of exporting can reduce the its risks and barriers, allowing businesses to export to distant markets and increase the probability of their survival in international markets (Oehme and Bort 2015).

Academics and practitioners concur that the internationalization process and patterns of SMEs in emerging markets differ in pace and degree from those in developed economies (Child et al. 2017). Scholars argue that SMEs in emerging countries face unique hurdles when internationalizing, making them more vulnerable, less able to compete with Western rivals, and slower to internationalize (Zhu et al. 2020). The internationalization of SMEs in emerging economies, unlike their counterparts in developed economies, is conspicuously marked by a dearth of resources (Senik et al. 2014). Furthermore, SMEs in emerging economies frequently grapple with resource-based constraints, encompassing financial limitations, managerial hurdles, technological deficiencies, the absence of established brands, and a scarcity of innovative products (e.g., Fernandez and Ali 2015; Heredia-Calzado and Duréndez 2019; Zhu et al. 2020). Other scholars have discussed the lack of sufficient knowledge of the target market, sufficient information to make internationalization decisions, and appropriate human resources (e.g., Ipek and Tanyeri 2020; Mendy and Rahman 2019; Paul and Sánchez‐Morcilio 2019; Steinhäuser et al. 2021).

Al-Hyari et al. (2012) observe that access to finance is a key deficiency for SMEs in Jordan. Similarly, Singh et al. (2010) have noted that capital scarcity and information deficits have ramifications for the internationalization of SMEs in Fiji, a pattern corroborated by Gupta et al. (2005) in their examination of Indian SMEs. In a comparative study, Makhmadshoev et al. (2015) found that SME exporters in Tajikistan encounter more challenging institutional limitations than do their counterparts in Kyrgyzstan. This disparity in institutional contexts seems to have adverse effects on the internationalization prospects and competitiveness of SME exporters in Tajikistan and a favorable impact on those in Kyrgyzstan.

Building on the above discussion, this study, taking Qatar as the study context, addresses the need to offer a nuanced and context-specific comprehension of the factors that serve as internal enablers for SMEs in developing countries by facilitating their export endeavors. Exploring such a topic holds special significance in the field of international business and economic development because SMEs serve as pivotal engines of economic growth in these regions (Reimann et al. 2021). Investigating and comprehending the internal enablers required for successful internationalization is vital: it not only helps to unlock new opportunities for economic growth but also facilitates job creation, market diversification, and the development of competitive advantages. By understanding the needed enablers, SMEs in developing countries can attract foreign investment, foster innovation, and enhance their reputation on the global stage.

In this study, we emphasize the interconnectedness of sectors. The existing body of literature has clearly established that the ability to engage in internationalization in a particular industry can produce significant ripple effects across other sectors. This phenomenon is attributed to two fundamental dynamics: first, the internationalization decisions made by firms are influenced by the production structure and intensity of factors present in other sectors; second, the factor flows that serve as conduits for the transmission of internationalization effects to various sectors. Given these intricate interdependencies, assuming that sectoral developments can unfold in isolation is theoretically untenable.

Methodology

Given the exploratory nature of our research and the paucity of existing studies on the internationalization of manufacturing SMEs in GCC countries, a qualitative research approach for data collection and analysis was deemed the most helpful for this study (Arnould and Thompson 2005; Üstüner and Holt 2007). Qualitative research provides nuanced and contextual understanding to explore under-researched phenomena and enables the researcher to unpack previously uncharted aspects of the phenomenon under investigation (Creswell 2003). In studying the internationalization of manufacturing SMEs in emerging markets, Qatar serves as a particularly enlightening case. Situated on the Arabian Peninsula, Qatar, despite its relatively small geographic size (11,586 sq. km) (Central Intelligence Agency 2023) and population (3.05 million) (Planning and Statistical Authority 2022), has since the 1990s witnessed remarkable economic growth, largely driven by the expanding oil and natural gas reserves (Central Intelligence Agency 2023).

The population in this study was limited to the manufacturing non-hydrocarbon SMEs in Qatar. According to Qatar Development Bank, the total number of registered SMEs in Qatar is 32,000, with approximately 10,000 active entities. The manufacturing SMEs sector represents 10% of the active firms, with approximately 300 entities engaged in exporting activities (Qatar Development Bank, 2017). Because of the nature of the data required, they were collected through in-depth interviews with managing directors and personnel responsible for exporting manufacturing SMEs in Qatar. Three criteria were used to select the participating firms. First, the firm had to be from the non-hydrocarbon manufacturing sector. Second, the firm had to be small or medium-sized according to the definition put forward by Qatar Development Bank (i.e. employees must not exceed 250, and the annual turnover should be less than QAR 100 million). Third, we ensured their relevance to the subject matter (Ritchie et al. 2003), in that all the selected firms were engaged in exporting activities.

We conducted 20 in-depth interviews with managers from 11 non-hydrocarbon industries (Table 1). Among the 20 enterprises chosen for this study, 17 were in the New Industrial Area, which serves as the primary hub for factories in Qatar. Two more enterprises were in Mesaieed Industrial City, strategically located 40 kilometers south of Doha and serving as the central hub for Qatar’s primary building material, petrochemical, fertilizer, oil refining, and metallurgical sectors. The remaining enterprise was in Doha Port, situated on the eastern shoreline of the Qatar Peninsula.

Table 1 Demographic profiles of respondents.
Full size table

We recruited participants through a market research company using individual personal interviews. A purposive sampling approach was adopted to select participants who met the above criteria. Although the sample size is relatively modest, it represents a range of SMEs operating in the country’s priority sectors (i.e., sectors that have unique positioning compared to their peers and have a high potential in export development) (Qatar Development Bank 2017). Furthermore, the sample fulfills the symbolic representation criterion because the participants’ stories “represent and symbolize features of relevance” to the phenomenon under study (Ritchie et al. 2003, p. 83). We interviewed participants from various manufacturing sub-sectors, including plastics, electrical materials, construction materials, food, paper, furniture, medical devices, health, and personal care. All references to participants are pseudonymized. Data were collected over five months in 2021 from interviews lasting between 45 and 120 min, with an average duration of 72 min.

The interviews were semi-structured in format. This allowed us to explore managers’ views in detail by giving them the chance to explain and clarify, while maintaining some degree of control in discussing specific predetermined topics. An interview guide was developed to ensure that all the relevant themes were covered. The interview started with questions relating to the date of the firm’s establishment and involvement in exporting and how this had been done. The interview questions also asked how the export business develops over time, which export channels SMEs use to reach international target markets, what SMEs had learned from previous and ongoing activities in export markets, and the key internal enablers needed to trigger export opportunities and support the export performance of SMEs.

The interviews were transcribed, and the transcripts were used as the text from which thematic content analysis was conducted. To conduct the thematic analysis, we followed four steps. First, we eliminated irrelevant discussions. Second, we coded the remaining data according to a list of codes developed after many readings of the transcripts. Third, we categorized the codes into clusters, which were labeled according to the meaning of the associations shared by the codes (Boyatzis 1998; Spiggle 1994). Fourth, we adopted an ‘iterative back-and-forth’ process to interpret interview data (Thompson et al. 1990). During the analysis, we constantly compared the themes to identify overlaps, connections, similarities, and differences between incidents (Glaser and Strauss 1967). Overall, we considered the analysis process as a continuous process whereby these analytical procedures were repeated across participants’ narratives.

Findings

The thematic analysis of interview data helped to identify five key internal enablers that influence the export performance of manufacturing firms in Qatar. These are discussed in the following sections.

Having employees with networking skills

Undoubtedly, SMEs engaged in exporting require specialized personnel with specific exporting competencies and expertise. Network connections are widely recognized as essential to SMEs’ internationalization efforts (Jeong et al. 2017). Manufacturing SMEs operating in Qatar increasingly view an employee with global perspective networking skills as crucial for reaching the targeted international market swiftly through their relationships with a previously developed customer base:

During the 2017 blockade in Qatar, we changed our export strategy and hired a dedicated export sales manager who had previously worked in the same industry and already had customer contacts. That is how we maintained our export business (Ahmed, General Manager, Plastic).

Ahmed notes that hiring an export manager with networking skills has resulted in a 5% increase in the value of the enterprise’s exports, with an additional 15% increase set as a long-term target. Notably, this example also shows that firms may engage in hiring specialized labor in response to external macro-environmental changes (e.g., political). This raises the question of whether SMEs would function well without specialized labor so long as external macroeconomic forces were favorable. Another intriguing rationale mentioned in Ahmed’s account is that firms may be hiring additional personnel not because of their specialized capabilities but because of the key customer lists and the networking opportunities they bring to the table.

While SMEs are primarily constrained in their international expansion by a lack of external resources, insufficient knowledge of foreign markets, lack of international experience, and lack of overseas contacts and business opportunities (Kazlauskaite et al. 2015), hiring personnel with networking capabilities is seen as a go-to solution to overcome such constraints. According to Zhang et al. (2014), the degree of internationalization that SMEs, particularly in emerging economies, may achieve is contingent on their ability to overcome resource constraints through networking. This being the case, the teams already dedicated to export-related activities in many firms have not prevented them from hiring additional skilled personnel with customer networking skills to boost export sales:

On the internal front, we have a capable export team that develops long-term ties in new markets. However, we are thinking of hiring skilled people from a competitive company, as they will bring their connections (Khalifa, Managing Director, Healthcare).

The exporting journey of Khalifa’s enterprise began by establishing relationships with distributors in Jordan and Sudan, but these raised value of their exports to 5% of its total revenue. Employing an internal export team enabled it to establish a foothold in Kenya, resulting in a 7% increase in export value. However, Khalifa was quick to point out that, due to the relatively slow progress in finalizing registration processes to expand exports to additional new markets, the next move for his enterprise was to recruit sales personnel with existing network connections. Notably, Khalifa’s account showed the significance of network connections in encouraging the development of export capabilities for SMEs.

Indeed, foreign market knowledge is indispensable for SMEs seeking success in international markets (Child et al. 2017; Oviatt and McDougall 1994; Zahra 2005). Thus, it is unsurprising that when SMEs hire personnel to boost exports, networking abilities may take precedence over other skills. This is particularly important in Middle Eastern countries since relationships with firms’ personnel may play a more critical role than functional factors in creating consumer experiences and reducing perceived risk (Elsharnouby and Parsons 2010a; 2010b). Aligned with the network approach (Johanson and Vahlne 2009; Ojala 2009), SMEs in Qatar, by using their employees’ personal networks, can increase the value of their exports by minimizing the costs associated with searching for and linking with prospective customers. This may be especially applicable to SMEs operating in emerging economies that can leverage reliable information to mitigate the investment risks related to exporting activities.

Effective supply chain management

In analyzing the data, it became clear that developing and managing effective supply chain networks serves as an internal enabler for SMEs’ exporting success. Notably, the global marketplace is frequently confronted with new realities, rendering previous strategies, particularly if developed in different contexts, unproductive, slow, and incompatible with rate of change and volatility in the marketplace. For example, excess inventory dilutes the underlying value of manufacturing products and triggers lagging supply chains that may fail to respond to changing market conditions (Christopher 2016). Similarly, a SME supply chain may have a direct impact on other internal processes.

Similarly, at the consumption end of the supply chain, customers have a substantial demand for the timely and reliable delivery of products, particularly in the modern e-commerce environment where they can easily evaluate and move to alternative products. In this regard it is worth noting that a short and consistent order cycle time can improve the customer experience of an exporting enterprise, thereby increasing the likelihood of repeat orders and bolstering the enterprise’s reputation and brand perception:

Order cycle time reduction is one of the primary internal operational areas that we focus on in order to improve our export delivery performance (Hisham, General Manager, Construction Materials).

Hisham at once realized that his customers in Kuwait and Oman valued timely deliveries. He was quick to collaborate with a specialized logistics company, which then worked with his operations team to develop a standard operating procedure (SOP) that calculates the precise lead times required for delivery before Hisham commits to exporting to customers. Notably, for an SME that relies on adaptable and diversified global supply networks, an in-house solution to ensure timely deliveries is highly applicable, providing a competitive advantage in markets that particularly value timely deliveries. Given the typically stringent schedules and deadlines associated with construction projects, the value of on-time deliveries in this sector cannot be overstated. Subsequent material delivery disruptions have the potential to cause substantial financial penalties. Therefore, as Hisham’s assessment implies, the prompt delivery of construction materials following reducing order cycles plays a significant role in ensuring the efficient and timely completion of a project, thereby establishing his enterprise as a preferred supplier.

As demonstrated by the disruptive impact of the blockade (a diplomatic crisis in the Middle East began in 2017 when four countries severed diplomatic relations with Qatar) and of COVID-19 on SMEs operating in Qatar, structuring supply chain networks in the context of diverse alliances and efficient transportation routes is crucial for determining the degree of dependence that influences export performance:

We have learned that it is not just about export sales but also about having a roadmap with clear building blocks. Operationally, this means that we must plan our production and inventories differently, including lead times and export order cycle times (Farouk, General Manager, Food).

Farouk’s enterprise operates in the food industry and so he quickly realized that, by making use of optimal shipment quantities as a building block, he could effectively manage product inventories and reduce logistic and warehousing costs. Working with his largest importer in Kuwait, he determined that six containers was the optimal shipment order size. Equipped with this information, Farouk successfully negotiated with a local distributor to secure lower shipment charges. Farouk’s case serves to demonstrate the need for a contextualized approach to supply chain management that would embrace meticulous planning, optimized procedures, and flawless system integration. More importantly, this case exemplifies the critical importance of an effective supply chain in guaranteeing the safety and quality of exported food products, particularly those that have short expiry dates.

Notably, in the food industry, vulnerability to disruption as a result of reliance on a single supply chain network has forced firms to rethink their objectives in such areas as production cycles and inventory management. Effective supply chain management identifies and eliminates systemic inefficiencies and creates cross-network opportunities for Qatari SMEs to overcome natural and temporary gaps that may limit export performance. SMEs in emerging markets compete in a global environment where information is instantly accessible and supply chains that were on the cutting edge a week ago have been outperformed by newer, more innovative processes. This quickly makes existing supply chain processes antiquated and in need of regular redesign.

Product diversification

Another internal enabler we observed to be crucial for SMEs when they look for international expansion is product diversification. The adage about putting all of one’s eggs in one basket can apply to a firm’s business strategy. Concentrating few resources on a particular product or business area inevitably constrains SMEs’ growth and increases the risks of failure and loss. But at the same time, product diversification enhances a firm’s long-term stability and growth:

We learned that we must diversify our product portfolio by incorporating business ideas to produce innovative products such as 3D plastic medical devices, particularly given our competitive advantage of having access to cheaper and higher quality raw materials in Qatar (Samar, Chief Executive Officer, Medical Devices).

In the case of Samar, exporting medical equipment to Kenya, Sudan, and Nigeria marked the beginning of her SME’s exporting journey. However, the export quantity and value reached a state of stagnation because of the entrance of low-cost equipment manufactured in China, which flooded these specific markets. It taught Samar that exporting opportunities arise because of unmet market demands, which can be used for market penetration, especially through diversification strategies. Consequently, product diversification proved to be an essential critical enabler for Samar in adjusting to the constantly evolving dynamics of the medical industry and capitalizing on opportunities in untapped markets.

While product diversification contradicts the benefits of specialization at the heart of comparative advantage theory, it helps alleviate macroeconomic volatility. It is widely assumed that SMEs face resource constraints, diseconomies of scale, and lack of market power, which makes them more likely to compete in narrower product portfolios (Li et al. 2012). However, the contemporary global tech-savvy environment in which we live requires and yet forbids businesses to operate at near-breakneck speed to outperform competitors and get products to market in time to capitalize on local and international consumer demand. According to Samar, even SMEs in emerging economies must diversify to compete on a global scale, remain competitive and ensure their survival:

We began by exporting drip irrigation and high-pressure pipes, with exports accounting for around 20% of total revenue. However, following the blockade, we expanded our product portfolio by selling pipes, plastic film, and bags, with the goal of increasing export business to between 25% and 40% of total revenue (Ahmed, General Manager, Plastic).

Ahmed was keen to emphasize that the blockade had a detrimental effect on export quantities and values. Initially, most exports were destined for the GCC and African countries such as Tunisia, Morocco, and Burkina Faso. The decline in exports prompted his team to adopt a creative approach, and upon identifying a vacuum in the market for pipes and plastic film bags, the enterprise decided to diversify and was able to successfully penetrate markets such markets as Belgium, Germany, Iran, Italy, Turkey, and Uzbekistan.

While developing new products can be a challenging process, diversification if managed well can be extremely beneficial for SMEs seeking to establish or increase their presence in the global marketplace. More importantly, product diversification can play a crucial role in enabling exporting SMEs to effectively manage the risks linked to variations of demand in current markets, thereby establishing a foundation for more consistent revenue streams. Diversification proves to be particularly advantageous during political crises because it alleviates the reliance on a single geographic location for revenue generation.

Digitalization

The long-term competitiveness of SMEs fundamentally depends on their ability to participate in international marketplaces. The conventional SME model, generally defined by its comparatively small geographical footprint, minimal technological innovation, and lack of sustainability consciousness, is no longer viable (Denicolai et al. 2021). Regardless of the size of an SME, digital transformation has been a critical advantage both before and since the COVID-19 pandemic. The revolutionary impact of digitalization, which includes cost savings and greater network activity gives SMEs more chances to grow and internationalize, specifically through customer acquisition and online sales. More importantly, digitalization serves as a pull factor in motivating SMEs to pursue export opportunities (Danik et al. 2016). Notably, the onset of the COVID-19 pandemic uncovered flaws in communication strategies, prompting most businesses, including SMEs, to adapt quickly and establish new channels using technology to maintain their engagement with customers. Digitalization during the pandemic demonstrably revealed the vital role of technology, and its capacity to enable SMEs to continue, in contributing to the global economy. In essence, the world’s embrace of all things digital hastened every kind of communication by years as a result of the COVID-19 pandemic.

Platforms for sharing content, electronic procurement systems, social media, and websites have become the new norm for enabling firms to innovate, conduct research and development, and capitalize on new market opportunities (Vural et al. 2020). This being so, both large and SMEs have increasingly relied on technology to increase client reach and engagement as the demand for immediacy grows, while the pandemic serves as the impetus behind the greatest adoption of digitization in modern history:

With the COVID-19 pandemic, focusing more on the digital side, including virtual communications and exhibitions, connecting with new potential customers online and digitally promoting our company through B2B platforms such as Alibaba has increased our visibility and generated sales leads and inquiries (Ahmed, General Manager, Plastic).

Ahmed’s enterprise, becoming acclimated to virtual communications, participating in virtual exhibitions, and connecting with new potential consumers via online platforms have made it possible to learn to navigate in the export decline caused by the pandemic. Naturally, exporting needs SMEs to have a global perspective. Over the past two years, travel restrictions associated with COVID-19 have hampered the rate at which SMEs can orient themselves to the global marketplace. However, this study discovered that digitization has enabled SMEs in Qatar to grasp the impact of international marketplaces, particularly global developments and trends. Such awareness is critical if SMEs are to distinguish opportunities and challenges that could jeopardize their competitiveness and growth outlook:

Digitalization efforts, such as improving our website and establishing a digital presence on e-marketplaces, have aided our firm’s export performance (Amir, Managing Director, Paper).

The case of Amir exemplifies the significance of maintaining a fully functional digital platform as a potential viable alternative in facilitating direct consumer interactions to a physical market presence and traditional market intermediaries. Further, by embracing digitalization, Amir and his team have been able to penetrate new markets, such as Iraq, Kuwait, and Oman. Consequently, their firm has made a notable 14% growth in export value over the previous four-year period, indicating the advantages of implementing digitalization initiatives in facilitating the expansion of its export volume. While having an online presence has served as an important critical enabler for Amir’s paper enterprise, in today’s digital age, it is equally important for exporting enterprises in other industries.

Ironically, however, digitalization challenges the theoretical foundation of some classic models of internationalization, such as the Uppsala model (Johanson and Vahlne 1977; Johanson and Wiedersheim-Paul 1975). According to the Uppsala model, the primary impediment to internationalization is the lack of knowledge about international markets, which SMEs can overcome only via learning by doing business in the given markets. The model thus considers a firm’s first-hand experience as the primary source of its learning curve. However, the influence of digitalization means that knowledge may be transferred not only across international borders but also between employees, making the Uppsala model’s concept of first-hand knowledge at present less relevant to the process of internationalization.

Essentially, digitalization enables SMEs to gain insight into how customers, distributors, suppliers, other competitors, and public agencies behave and react in the ever-changing macroeconomic environment. This, in turn, supports SMEs’ improved understanding of prospective international markets before and during the internationalization process, thereby enhancing their competitiveness in the global economy.

Market intelligence capabilities

Each international market is distinct, and SMEs seeking to engage in exporting activities in potential markets must be familiar with their respective defining characteristics. If they lack such specialized knowledge, SMEs venturing into new markets face a higher risk of failure. Hence, market intelligence capabilities serve as an internal enabler for SMEs to explore export opportunities in international markets:

We collect market intelligence through the online ITC Trade Map portal to learn about a potential market’s significant players, tariffs, and non-tariff measures, among other things (Salem, General Manager, Electrical Materials).

By learning about new tenders and large projects in previously untapped markets such as Sri Lanka and Indonesia, Salem has enhanced his market intelligence capabilities by familiarizing himself with the Trade Map Portal; collaborating with Qatar Development Bank (QDB) has resulted in presenting his enterprise with export opportunities for agricultural plastic tunnels. By enhancing his market intelligence capabilities, Salem and his team were able to conduct effective market research, strategically analyze international markets and create a Market Access Map for their new innovative products. For instance, the team identified Hong Kong as a geographical area for their innovative insulated cables. In this way, intelligence capabilities helped Salem sell differentiated products that set his enterprise apart from his competitors’, as seen in the context of Hong Kong.

It is worth saying that SMEs are often reluctant to expand beyond their local markets due to the challenges and unfamiliarity that come with limited resources (D’Angelo et al. 2013). However, the use of Trade Map portals indicates that several SMEs in Qatar are willing to take risks and quickly expand their businesses when the opportunity arises. This practice is described as the “pacemaker” in the Conservative, Predictable and Pacemaker (CPP) model suggested by Paul and Sanchez-Morcillo (2019). Entering a new international market through exporting demands in-depth knowledge, which generally adds value to the products provided by SMEs. For this reason, accurate and timely market intelligence is critical for SMEs, particularly in making informed decisions in the analysis of possible international marketplaces for export. Research capabilities are equivalent to SMEs doing their homework to refine their exporting IQs (intelligence quotients):

Export opportunities are triggered when there is a gap or market need. We have learned that market research and intelligence are critical enablers of exporting activities (Samar, Chief Executive Officer, Medical Devices).

To Samar, market intelligence revealed a gap in the sale of cost-effective 3D plastic medical devices. This, coupled with the availability of inexpensive, high-quality polyethylene in Qatar, gave the company a competitive edge, thereby increasing the value of its exports to countries such as Jordan and Sudan. According to the dynamic capabilities theory, using marketing capabilities to identify untapped market opportunities enables firms to respond more quickly, accurately, and strategically to exporting opportunities in the international market than their competitors can (Elsharnouby and Elbanna 2021). Further, superior research capabilities serve as a foundation for the formation of born global SMEs capable of meeting the needs of customers in a global niche. Defined as entrepreneurial start-ups that aspire to generate a significant amount of their revenue through international markets (Cavusgil and Knight 2015), born global SMEs account for considerable trade flows globally, thereby serving to accelerate export performance.

The internal enablers discussed in this section are illustrated in Fig. 1 below.

Fig. 1
figure 1

Internal Enablers Enhancing SMEs’ Exporting Performance.

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Discussion and conclusion

Theoretical implications

The primary objective of this study is to explore what constitutes internal enablers for SMEs in bolstering their export activities in global markets. We identified five critical enablers – namely, employees with networking skills, effective supply chain management, product diversification, digitalization, and market intelligence capabilities. The findings of this study provide several unique insights into the key internal enablers of SMEs’ export performance in the manufacturing non-hydrocarbon sector, which can pave the way for a more developed perspective on SMEs internationalization in the less researched context of Qatar. First, the study shows that having employees with networking skills is a critical internal capability for enhancing a firm’s export performance. This finding is congruent with the resource-based view and a sense of the importance of knowledge capabilities for business internationalization (Nakos et al. 2019). Previous studies showed that foreign networking had a positive impact on SMEs’ export performance (Babakus et al. 2006). For instance, employees who have strong networks and international experience can help to establish and encourage export opportunities (Zaheer and Bell 2005). In addition, the resource-based view shows that external network links can add value to the international business of SMEs through transactions of information (Johanson and Vahlne 2009). As argued by Child et al. (2017), through networking, employees can provide the connections in international markets required to accelerate exporting processes and provide necessary market knowledge.

Second, the study corresponds to the literature that links the effective supply chain with many advantages for the firm, such as lower costs, improved quality and maximizing resources (Beamon and Ware 1998). For example, it was found that an inefficient supply chain can interfere with the ability to enter new markets through exporting, because it can disrupt the integration of processes. Two additional reasons show that managing the supply chain efficiently is particularly important for the business community in Qatar: the 2017 GCC crisis was intended to isolate Qatar and forcefully cut the country from its neighbors, and the COVID-19 pandemic had detrimental effects on major logistical infrastructures around the world such as airports and seaports, leading to the steep challenges experienced in supply chains.

Third, this study highlights product diversification as an internal enabler for export performance in addition to minimizing exporting-associated risks. Since SMEs operate with scarce resources, a failure to balance their investment decisions with diversification strategies can have negative effects on their performance. For instance, unrelated product diversification can impair a firm’s performance (Benito-Osorio et al. 2020). Although several studies have found that diversification decisions had a positive impact on SMEs’ performance, they report that such decisions can put pressure on their limited resources when exporting (Dikova et al. 2016). Consequently a careful assessment is needed to leverage diversification strategies (Miocevic 2021).

Fourth, consistent with firms’ competitive capabilities and the resource-based view, the study shows that digitalization allows SMEs to learn more about international markets before and after the internationalization process (Elia et al. 2021). Technological capabilities can provide numerous benefits to SMEs, such as improved communication with customers, improved engagement; they can improve the network, and reduce costs. Related research shows that digitalization created business resilience in SMEs and online activities improved demand during the pandemic (Ren and Gao 2022). Fifth, the study shows that enhancing the knowledge of the market intelligence capabilities of SMEs influences their ability to successfully enter foreign markets (Falahat et al. 2020; Miocevic 2021). For instance, a recent study shows that the internationalization of Qatari SMEs requires cultural considerations because certain cultural factors can affect international market entry (Younis and Elbanna 2022). As several authors argue, market intelligence enables firms to foster internationalization by enhancing their capacity to identify and exploit external opportunities (e.g., Mishra and Zachary 2015; Pham et al. 2017).

Practical and policy implications

This study offers several practical implications for policymakers, managers and owners of SMEs. First, the five internal enablers that we identified show the areas that could help drive the economic sector grow by enabling SMEs to become competitive in external markets. For example, hiring employees with networking skills and international market experience can outweigh the liability of outsidership and the lack of knowledge and experience of international markets, which are common constraints of SMEs in emerging markets. Second, managers of SMEs should ensure effective supply chain management, which can be improved by implementing IT and technology-based solutions (Pattanayak and Roy 2019). In addition, policymakers and government agencies may consider the efficiency of the supply chain processes by tackling systemic inefficiencies (e.g. lack of transparency, overproduction, long lead times, and limited collaboration and information sharing). Third, given that SMEs in emerging markets often lack the support needed, policymakers and government entities need to consider implementing efficient institutional structures to support product diversification, along with providing financial incentives for SMEs to improve firms’ capabilities.

Fourth, SMEs need to be more digitally advanced in their business activities. They can do this, for example, by integrating technology-based business activities and establishing IT-based platforms for customers. Although emerging markets such as Qatar may lack the necessary infrastructure for digitization, which can affect their internationalization prospects, they must harness the digitalization process in their managerial and organizational systems to improve SMEs’ competitiveness and increase their understanding of international markets. Fifth, SMEs should focus on acquiring market knowledge and conducting research before entering new markets. This requires SMEs to invest more in information technologies to develop their market intelligence capabilities (Carayannis et al. 2018).

Limitations and future research avenues

The present study has several limitations that future research could aim to address. First, the enablers of international business on which we focused, although significant, are not necessarily exclusive of others. Other potential enablers at different levels are candidates for future research such as the managerial capabilities of managers (the individual level); organizational slack (the firm level); governmental support (the country level); trade agreements and culture (the international level). Second, further insight into the five identified internal enablers requires a more in-depth qualitative investigation, paying particular attention to their dynamics. The performance consequences of these enablers and how they interact with each other form another important avenue for further research. Third, some methodological limitations in this study require the attention of future researchers, who might for example use a larger and more diversified sample than ours. Since ways of doing business vary between countries and regions, studying a wider range of countries might lead to more diversified findings. In addition, since our data were cross-sectional, a longitudinal design would have the potential to indicate how enablers of international business evolve over time and whether they, for instance, become less important as firms expand their international business.

This study also highlights other opportunities for future research. First, it supports the foundation of other attempts to quantitatively evaluate the proposed enablers, using large samples. Second, there is a need to explore how SMEs in Qatar can take advantage of internationalization opportunities while mitigating their risk and their complex challenges (e.g., Kiss et al. 2012). Third, future research needs to explore which network contacts are key sources of assistance for SMEs internationalization in Qatar and how each links SMEs to their foreign markets. Fourth, given the critical importance of the supply chain in Qatar, future research needs to analyze the weaknesses of the existing supply chain system and make specific suggestions to strengthen it. Fifth, in addition to examining product diversification, geographical diversification needs to be carefully considered since it can carry opportunities for SMEs in Qatar to mitigate the political risk, particularly after the 2017 blockade. Moreover, exposure to new international markets stimulates organizational learning, in the sense that SMEs strive to continually upgrade their products and adapt to new market conditions (Filipescu et al. 2013). Sixth, the role of digital financial development such as digital finance on growth opportunities for the international business of SMEs in Qatar needs more attention from future researchers (see, for example, Ren and Gao 2022). Seventh, the diverse nature of our participant pool across various sub-sectors provides a broader perspective on the internal factors that enable SMEs to improve their export performance, regardless of their specific sub-sector. Therefore, one possible avenue for future research is to explore each sub-sector further to identify the distinct enablers in each sector. Eighth, in light of the discussed theories and the scope of the present study, future researchers can expand upon the dynamics of product diversification and digitalization by exploring additional theoretical frameworks. These frameworks may look into areas such as digital marketing strategies, and the role of digital ecosystems in international business. For instance, researchers can consider the work of Elbanna et al. (2020) on potential theories in the context of internationalization decision-making, as well as that of Knight and Cavusgil (2004) on the Born Global Theory and the role of digitalization and online platforms in enabling SMEs to rapidly export and engage in international markets.

To conclude, while the economic potential of SMEs in emerging countries such as Qatar is well recognized, it must be successfully harnessed to generate value and contribute to the country’s economic wellbeing. The five key internal enablers identified in this study can pave the way for a more developed perspective on SMEs internationalization in emerging markets.