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Survival tactics that SMEs need to resort to
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Bikky Khosla | 09 Feb, 2010
While we are looking at brighter growth prospects of the economy, we need to understand the potential of Small and medium-sized enterprises (SMEs) and their huge role in being the life-blood of the Indian economy. An undeniable fact in today's context is that they are one of the main sources of revenue and play a key role in enabling India to compete in world markets.
However, what disturbs me is that, despite such potential, SMEs are unable to grab the opportunities that today's close-knit global markets have to offer. And the antidote to this is just one - Information and communication technologies (ICTs) and related tools.
ICT tools offer many opportunities for SMEs to grow and prosper. However, SMEs shy away from integrating these tools in their promotion and marketing strategies because of the misconception that they are either very expensive or the results are not to their liking - a view that is so wrong!
Take for instance B2B portals. These portals are about networking businesses, streamlining business processes and introducing collaborative business practices. The success of SMEs in India lies in their ability to harness the potential of Information and Communication Technologies to leverage the development process and B2B portals can be the easiest way to do so.
A B2B portal is the best thing to have happened to SMEs. It is seen as a great equalizer because it has potential to wipe historical weaknesses of small enterprises. I strongly feel that for SMEs, it is not a question of whether they should be active players in a B2B portal or not. It has become a question of survival. The opportunity cost of not being an active player in a B2B portal is too high for SMEs.
To survive, grow and win, SMEs will have to continuously infuse B2B portals in their marketing and management functions to cut cost, gain efficiency and consistency.
I have always said and will reiterate the fact that in today's business world only those SMEs that have a strong technological base, international business outlook, competitive spirit and willingness to restructure themselves will withstand the challenges and be successful in making their own contribution towards the Indian economy. Are you one of them?
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sunil Luhar | Wed Feb 10 09:30:04 2010
Inspite of so called infrastructure Boom Economy is controlled only by large scale business Houses.Basically SMEs are depended on them and I have always observed these SMEs are exploited by them. Whenever there is a oppertunity there is long queu of SMEs to grab the oppertunity and desparation of loosing oppertuity and survival insecurity, always one or other company end up offering unreseaonable/unhealthy prices. I see lot of SMEs are dyeing or just keep pushing themselves in this fight for survival.But in this process other companies find themselves no where and keep on loosing oppertunities.Even though copanies are well aware about the facts that the prices offered by the SME is not at all viable they allow them to take up the oppertunity and when they collaps INBETWEEN they get the balance job done by one of the SME who is still standing in the queu for taking up a oppertunity at the same prices.End of the day stretogy of the large scale company is they end up completing projects by using such Nos. of SMEs and keep their cost in controll at the cost of suffering of SME.There is a sever issues related delayed payment also. Irrrespective of plenty of oppertunies avalable, I dont think that SMEs are benefited.I have observed SMEs have expanded more than their sustainable limit and due to price war and unhealthy competitation they are facing severe issue of survival & sustainability. Have you heard of any SME going public these days!!!
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Re:
Darpan | Wed Feb 17 16:27:34 2010
The comment that you have made about being dominated by large scale industries and huge competition due to large number of SMEs is a natural phenomenon. Big fish always gets the small fish, and whoever has required survival skills survive. The editorial just suggests one of the ways which gives SMEs an added advantage of pooling their resources using B2B portals and other mediums. SMEs have been too apprehensive about the new age growth mediums and have not been able to utilize them properly.
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Business Knowledge of SME in India
Banerji | Wed Feb 10 08:52:57 2010
Dear Khosla,
Indian SME do not have such Infrastructure (Knowledge) for making B2B Portal business. They are taking too much time, may be in India it is good enough. B2B Portal is making open the door, but the Indian SME must be trained on business process.
lease system -growth strategy for SMEs
kailash vashist | Wed Feb 10 02:47:57 2010
When SMEs grow and earn money then first of all they invest in immovable properties, say in land properties to be safe. Their main motive is to increase assets by anyway and land property is always beneficial which always earns good appreciation.
But it affects their business growth so they can use industrial land on long term lease basis(in place of purchasing land) and should use their holding money as working capital.
Yes, many SMEs get loan against property also but lease system is also an option.
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Re: lease system -growth strategy for SMEs
Sunil Luhar | Wed Feb 10 09:27:59 2010
Insite of so called infrastructure Boom Economy is controlled only by large scale business Houses.Basically SMEs are depended on them and I have always observed these SMEs are exploited by them. Whenever there is a oppertunity there is long queu of SMEs to grab the oppertunity and desparation of loosing oppertuity and survival insecurity, always one or other company end up offering unreseaonable/unhealthy prices. I see lot of SMEs are dyeing or just keep pushing themselves in this fight for survival.But in this process other companies find themselves no where and keep on loosing oppertunities.Even though copanies are well aware about the facts that the prices offered by the SME is not at all viable they allow them to take up the oppertunity and when they collaps INBETWEEN they get the balance job done by one of the SME who is still standing in the queu for taking up a oppertunity at the same prices.End of the day stretogy of the large scale company is they end up completing projects by using such Nos. of SMEs and keep their cost in controll at the cost of suffering of SME.There is a sever issues related delayed payment also. Irrrespective of plenty of oppertunies avalable, I dont think that SMEs are benefited.I have observed SMEs have expanded more than their sustainable limit and due to price war and unhealthy competitation they are facing severe issue of survival & sustainability. Have you heard of any SME going public these days!!!
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