SME means small and mid size enterprise. By the definition of European Union, SME is an enterprise or company with not more than 500 employees. In other definitions it is said that the SMEs should have not more than 250 employees. So, through an overview we can say that SMEs are that kind of company which have a small or midsize or home office with a larger enterprise. In present days, with the increasing popularity of entrepreneurship as a career, the number of SMEs are getting higher. We can see a lot of SMEs around us nowadays.
Though SMEs play a vital role in the growth of the economy, still they haven’t got the frequent access they deserve in the international market. They are still under-represented in the global economy. Through any of a range of cross border activities such as international trading, investments, partnerships, product development, participation in strategic alliances the globalization process for SMEs can be realized. The importance for SMEs to reach the global level is indescribable. The Nordic theory for the SME growth movement is “Think big. Start small. Grow fast”. This theory means to think out of the box, to start from small and grow continuously and fast. The main purpose of this theory is to qualify and constantly enlarge the business competence. SMEs are just not a small or midsize version of large and established companies. They have their own research, resources, knowledge and ideas. So, their opportunity should be different and should not be compared with the large companies.
The SMEs face some risks while entering into the international market. For example:
- Any foreign market will be able to take a comparatively larger proportion of resources from the SME than the larger companies.
- SMEs may lack the information those are necessary for exploiting international opportunities.
- As in the international market, SMEs need to deal with rivals larger than them, so they may suffer scale and resource disadvantages.
- As SMEs are comparatively smaller than their rivals with less age, experience and reputation they are naturally more dependent on human capital.
- For the lack of enough experience and reputation, the impact of failure of SMEs in the international market can be greater than their rival companies.
These risk factors are the main obstacles for the SME exporters to access the international market. Then a question arises. What is the solution for these problems? Let’s discuss it. The first step for solving the problems can be a higher degree of internationalization. Normally, this leads to better financial performance. In Fact SME exporters should think about this process more because this internationalization can outweigh their cost in the international market place. Then they should search for foreign markets, the facility and opportunity from all the foreign markets are not equal. Getting access to more foreign markets can increase their value on the scale of the economy by enhancing their revenues as well as their potential of profit. Thus additional volume also can be gained from the foreign markets. Normally most of the SMEs are like small business or start up companies from entrepreneurs. These companies are run mainly by their owners. So, it’s quite easy to bring change in the service and system of the company according to needs and can easily adapt in any situation. So, SME exporters should try to improve their productivity and give a better service to the international market to their multinational clients. Commitment to customer satisfaction, research and development and superior quality are the key factors which contribute to a company’s ongoing success in the international market. So, the same formula goes for the SME exporters also. The more quality and productivity you give, the better the reputation and experience you gain and survival in the international market will be easier for you.
We all know that there are so many giant companies are ruling over the international market at present, but there is still plenty of room for the small and mid size enterprises to find their niche and grow. The main thing here is to understand that the challenges they are going to face with these opportunities and when they are trying to face and solve them in every time they will be rewarded with a better place in the international market with plenty of more opportunities and scopes for their economic growth. In first stage you may find yourself misfit among those big companies or very small comparing to them, but as we said earlier that there is plenty of room available in the international market for the small and mid size companies, together with the other SME exporters you are also a giant one like your rivals and never a misfit.
In present days, SME is a big field to solve the unemployment problem. So, more and more access of the SME exporters in the international market place wi open a new door of business development undoubtedly.