A local business catering only to the needs of the local market is already a thing of the past across almost all industries and regions. From manufacturing to retail, many companies, particularly SMEs, are facing tough competition on what used to be their own, monopolised turf. But, conversely, they are also dipping their toes into new waters across multiple boarders. So how are they able to do this and why is it such a key factor in their future growth and success?
Growing your business is important, and it always has been. But in today’s fragile economies where that growth takes place is just as important; and it no longer suffices to stick to the comfort zone of your own market. Increasingly SMEs who once dominated their local market segment are being thrown aside in favour of overseas competitors who can charge less, offer a better service and supply a wider range of products in a shorter time. Fair or not, this is the reality faced by many organisations.
However, it is also the SMEs who are causing stirs amongst the global markets as they boldly (and successfully) compete for new business in previously unchartered territories for small and medium businesses. Where the big corporates where once the only ones with the buying and negotiating powers to win such business, SMEs are swooping in with their quicker decision making ability, greater flexibility and, probably most importantly, their focus on the customer experience.
So how are SMEs able to play alongside the big kids, and hold their own? A recent survey conducted by Oxford Economics of 2100 SMEs in 21 countries showed some interesting statistics about SMEs’ capability to enter new markets as well as what might still be holding some back;
- Within Asia, only 12% of firms are only generating revenue from within their own country and they expect this to drop to 4% in the next 3 years
- Over 50% of SMEs are leveraging cross-boarder business platforms for collaboration and new business acquisition
- Innovation is key for SMEs wanting to grow in new markets – 41% of SMEs surveyed reported that the CEO has primary responsibility for the company’s innovation strategy, highlighting its importance
- 40% of SMEs believe that improving their customer relationships is a huge priority for future growth, particularly for the emerging ‘empowered’ customer
- 31% of SMEs believe social media helps them provide better customer service
- 60% say mobile technology is key to transformation
Factors still causing barriers to growth for SMEs;
- Slow adoption of cloud computing – only 35% of SMEs currently using it
- Business analytics are recognised as important for success but SMEs are still struggling to extract and analyse accurate, quality data
- Human factors cause issues too including 31% of employees not adopting mobile technology and 35% not using social media
- Social media is only used by 12% of SMEs for their innovation strategies which highlights a huge opportunity gap
- One third of SMEs think Big Data is not relevant to their organisation’s success
A big challenge for SMEs is that while they acknowledge the need for business transformation, they are not always able to embark on initiatives to make this happen. This is possibly down to financial concerns but could also be that they want to test the waters first before committing too much time, money and effort into something new. A risky strategy but one that the retail and wholesale sectors are currently following across many countries.
Major improvements in business operations and supply chain management can cause significant improvements for SMEs wanting to break into new, competitive markets. But what would make a customer leave their trusted vendor or supplier for a newer, younger, out-of-town alternative? A few factors including cost, delivery timeframe, availability, wider choice of services and products and flexibility would be expected but where SMEs can make the real difference is their culture of innovation, their adaptability to new technologies and trends and their skills in meeting the needs of the global customer through such means as mobile and social media.
At Blue Ocean Systems, we work with SMEs who are looking to expand their business across boarders and together we create a sustainable strategy, supported by a strong business platform that prepares them for growth, in all corners of the world. If you would like to talk to us about your future plans and how we can support you in achieving them, contact us today.