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5 Tips for SMEs to Compete in the Global Markets

Monday, February 18, 2019

Small, Medium and Enterprises (SMEs) must have the desire to compete in the global market. What is more, many big companies that you know now, all started as small businesses. In fact, some of them started in the garage.

The reputation of those big companies that started from the garage cannot be underestimated. You may know Apple, which is known as the MacBook and iPhone manufacturer. There were also Bill Hewlett and Dave Packard who founded Hewlett-Packard (HP) from the garage they rented. Every MSME has the potential to grow like Apple or HP. It's just success cannot be obtained instantly, it must be accompanied by hard work and precise strategies. Regarding the exact strategy to compete in the global market, you can apply these 5 tips to develop MSME:

1.    The market segmentation

The first tip to expand SME is setting the market segmentation. You can not expect to sell products or offer services to everyone. Focus on people with certain criteria. This kind of segmentation is a strategy carried out by every company, especially large companies. You can offer the same product as other SME, but by targeting certain consumer segments, you don't need to worry about the competition.

This is done by Pepsi, which is arguably second compared to Coca-Cola. However, with the right market segmentation, Pepsi is still considered a big company. They set a different market segment from Coca-Cola, by promoting marketing among young people. This sounds pretty easy, but it's complicated to do. Moreover, market segmentation is an act that forcibly removes potential consumers that are not small in number. However, if done correctly, some SMEs can become the next Pepsi.

2.    Take advantage of collaboration

Competition with large companies is often complained about by SMEs. However, this is not a justifiable reason for SMEs to not develop. This may be just the opportunity to collaborate in the fields you don't have. For example, you are an SME producing household goods. On the other hand, you have difficulty distributing or marketing. In this condition, you can cooperate with other companies to help in the distribution or marketing of goods. To prevent the collaboration from becoming a burden, you can just implement a commission system. For example, a particular portion of profit for each successful transaction can be given. Through this kind of collaboration, the SME can focus on production and effort to improve product quality.

3.    Automation, automation, and automation

The next tip for developing SME is to pay attention to the recruits. Do not recruit too many workers, as it will consume a large portion of expenditure. Even if you have to recruit people, make sure that the recruitment is done correctly and is clearly required. The person chosen is also not just a random person, but a person with the qualified criteria Also, take advantage of technology to automate various business activities. This automation can be used to reduce the number of workers who burden business expenses. At the same time, the existence of various sophisticated applications now also provides flexibility in marketing products.

4.    Able to adapt in various conditions

A successful SME business actor can adapt in various situations. Moreover, in the modern era, changes in market conditions can occur suddenly. If you can't adjust to the changing conditions, you can be sure your business will collapse. Failure to adapt to the market situation leading to bankruptcy is actually a nightmare not only for SMEs but also big business. A real example of this phenomenon is the closure of several industries involved in the music business, such as the Tarra Disc or Aquarius Musikindo.

5.    Invest in yourself

Investing in yourself is something you must do so that businesses can grow big. Investment can be done in various ways, including acquisition. However, the acquisition is done by considering the budget and the benefits obtained. Those are the 5 business strategies to help SME in competing in the global markets. By doing the tips above, there might be a possibility that the small business you are currently running will become a company the size of Apple in the next few years.

Read Also : Leadership Styles for a Successful Business

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