If large-scale enterprises are said to be the machine to stabilize the market and keep the national economy secure, then the small and medium-sized enterprises (SMEs) are the booming and innovative engine to activate economy and increase employment. In global, small and medium-sized enterprises play a pivotal role in driving economy development. According to the WTO data, SMEs account for 20% of US exports, and 40% of EU exports. For China, the largest market in the world, there are more than 1,000 registered small and medium-sized enterprises, accounting for 99% of the total enterprises. Their development solves the employment problems of 75% job seekers. Among the total export amount, SMEs account for 60%.
However, SMEs in global are struggling to stay alive and develop in adversity. They are facing great hurdles on development, such as lack of home government assistance, unfamiliar with foreign business practices (Language obstacle is the fundamental problem. SMEs can resort to translation service provider like Integrity Multilingual (Wuhan) Translation Services Co., Ltd.), lack of innovation to develop new products for foreign markets, difficult to obtain reliable foreign representation, bad management, etc. WTO reports that up to a third of SMEs face the challenge of accessing affordable trade financing. With the economy globalization, the local advantages of SMEs are lost and they are facing the fierce competition from foreign enterprises. In this case, SMEs have to change their old views and find their way out.
Thinking Pattern Should Be Changed
Recently, one of my previous colleagues told me that the company she was working now was in an unstable situation and some staff were fired by the company or resigned. In consideration of confidential information, the name of this company won’t be disclosed here. This is only one problem which many SMEs are suffering. In spite of the destiny of this company, an obvious feature of these SMEs is sticking to old management pattern and refusing to change. The reason is that they are afraid of failure. What if they still face the same problem after they made reform? The fact is that we never know the result before we take action due to some unexpected things. But there won’t be any chance to succeed without even having a try.
Transformation to “Internet Plus (+)”
According to Wikipedia, "Internet Plus" refers to the application of the internet and other information technology in conventional industries. Similar to Information Superhighway and Industry 4.0, “Internet Plus” is proposed by China’s Prime Minister Li Keqiang in his Government Work Report on March 5 in 2015 so as to keep pace with the Information Trend.
In the digital era, it’s hard to believe that some SMEs ignore the power of Internet and only use traditional way to market their products. Websites of some SMEs are merely applied to show basic information, while some SMEs even don’t have websites. Or they don’t update contents for a long period of time, and also don’t make SEO for their websites, let alone use Internet to create benefits for them. In opposite, traditional marketing or direct selling is adopted by them, such as exhibition and site visits. “Internet Plus” provides a high-speed train for enterprises transformation. Internet offers comprehensive tools for enterprises on production process, product quality, management, cost control, etc. The SMEs should have the courage to transform to “Internet Plus” with indomitable spirit.
Innovation Is Driving Force
Previously, lower pricing strategy was adopted by SMEs. In order to further lower price, they usually cut costs at the expense of quality. Data shows that price is not so important as before since customers also consider about other factors, including product quality, after-sales service, provider’s strength, etc. Innovation is the long-term solution, including technology innovation, product innovation, management innovation, etc. SMEs should take customers’ demands as the guide and develop customized products. When it comes to innovation, talents come at first. In fact, SMEs have problem of talents outflow. This needs the decision makers change their minds and apply new management pattern to inspire their staff.
Cooperation avoids blind competition
Cooperation between small and medium-sized enterprises enables them to take full advantages of each other. As for cooperation, such as how and with whom, there is something needs to be considered. For SMEs, cooperation on products is a usual way, which means bundling sales since they have the same target market. For example, when two companies which sell cloths and shoes respectively cooperate, the customers can choose to buy both cloths and shoes at a cheaper price compared to buy separately. Both sides will benefit from such kind of marketing. Distribution is another cooperation model. SMEs can consolidate channel management, lower the delivery cost by establishing distribution cooperation.
When it comes to cooperation with whom, deep consideration is needed before taking action. There should be similar “DNA” between their products, brands, viewpoints, etc. Just like two lovers, without common language, their relationship won’t last long time. At the same time, SMEs should also take customers’ consumption habits and mutual benefits into account. By exploring the advantages of themselves and collaborating with partners who complement their disadvantages will help expand markets further.