Market Orientation in Small and Medium-Sized Enterprises

Subject: Management
Pages: 1
Words: 393
Reading time:
2 min
Study level: Master

Small and medium-sized enterprises (SMEs) are vital for the world’s economies, providing two-thirds of jobs around the globe. SMEs go into internationalization to raise profits or lower business risks. However, successful internationalization requires the production of goods to meet recognized standards and planning of the expansion with necessary adjustments. Internationalization for SMEs could present a “learning process” with insights from new markets or localization of a “born global” product (Armario et al., 2008).

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SMEs’ market entry strategies include exports, launching turnkey projects with the installation of functional factories, licensing and franchising strategies, and creating joint ventures or wholly-owned subsidiaries. Internationalization knowledge (IK) of a company refers to an essential level of knowledge to enter foreign markets (market entry IK), new regions (localization IK), or manage businesses globally (global business IK).

Companies could also consider changes in supply chain design, customer service policy, or gap analysis to create a winning strategy for entering the global market. The supply chain, an integrated system of interconnected business processes, should be managed and designed in frames of decisions over investments and relationship patterns to achieve the desired outcomes. Customer service as a performance standard is essential in communications with clients and increasing profits through attaining customer satisfaction and loyalty.

The gap analysis is a useful tool to find the differences between expectations and customers’ perceptions of products and services. The gap analysis focuses on various aspects. These could be gaps between customer expectations and management perceptions, inconsistency in service quality and management perceptions, differences in rates of service quality standards and service delivery, the quality of service delivered in practice, and the promised level of service.

Applying information and communication technology (ICT) in supply chain management positively impacts businesses’ performance, contributing to buyer-supplier interactions and practical knowledge to react to market fluctuations effectively. Rapidly developing ICT tools, such as RFID, decision support systems (DSS), decentralized software agents, virtualization, cloud computing, and SaaS (software as a service) optimize SMEs’ supply chain operations.

The innovative ICT developments also include web services, business analytics tools, high-performance computing, SMAC stack, and Industry 4.0 digital systems tailored to effectively implement various supply chain processes. SMEs also could boost their productivity by working with dynamic capabilities related to strategic thinking. Managers’ dynamic capabilities include sensing, coordinating, learning, integrating, and reconfiguring – strategic moves to adjust a company’s status-quo operations to the business environment.

Reference

Armario, J. M., Ruiz, D. M., & Armario, E. M. (2008). Market orientation and internationalization in small and medium-sized enterprises. Journal of Small Business Management, 46(4), 485–511.

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