Definition of SMEs
According to the OECD (2005) small and medium sized enterprises (SMEs) are non-subsidiary, independent firms which employ less than a given number of employees. This number varies across countries; the most frequent upper limit is 250 employees, as in the European Union (EU). However the United States (US) considers SMEs to include firms with fewer than 500 employees. Small firms are those with less than 50 employees and micro firms would be made up of less than 10 employees.
Nature of SMEs
Hollensen (2014) highlights that many SMEs suffer from limited human and financial resources as a result many outsource. Although SMEs are customer orientated most want to look after home customers first and overseas customers come …show more content…
The National Academy Press (2000) emphases that SMEs must cater to the customer’s needs, which increasingly include supply chain interaction. This means providing low cost, high quality products, effective service and on time delivery. They should know their customers intimately at all levels in the organisation and cater to specific needs at each level. However as a result of the lack of resources many SMEs may not have sufficient knowledge or may lack managerial experience in order to enter into the market effectively and compete with their …show more content…
However different sectors rely on different forms of innovation and therefore each faces different barriers to achieve success. The BIS (2013) stated that innovation can be inhibited by inappropriate corporate governance frameworks. It went on to highlight that SMEs may be prohibited from using the forms of protection available for protecting their innovation, for example patents or trademarks, due to cost. An IPO awareness survey (2010) concluded that SMEs are less aware of IP’s than larger firms, and within SMEs medium firms tend to have greater knowledge than micro firms.
External Barriers
The external barriers which SMEs face is highlighted in figure 2, with many SMEs describing the economy as the biggest barrier to face in terms of growth and entering new markets, particularly in the aftermath of the 2008 financial crisis.
Many SMEs have a lack of time to focus on getting into overseas markets. They also have a lack of awareness and information of the overseas environment in regards to the macro
According to the OECD (2005) small and medium sized enterprises (SMEs) are non-subsidiary, independent firms which employ less than a given number of employees. This number varies across countries; the most frequent upper limit is 250 employees, as in the European Union (EU). However the United States (US) considers SMEs to include firms with fewer than 500 employees. Small firms are those with less than 50 employees and micro firms would be made up of less than 10 employees.
Nature of SMEs
Hollensen (2014) highlights that many SMEs suffer from limited human and financial resources as a result many outsource. Although SMEs are customer orientated most want to look after home customers first and overseas customers come …show more content…
The National Academy Press (2000) emphases that SMEs must cater to the customer’s needs, which increasingly include supply chain interaction. This means providing low cost, high quality products, effective service and on time delivery. They should know their customers intimately at all levels in the organisation and cater to specific needs at each level. However as a result of the lack of resources many SMEs may not have sufficient knowledge or may lack managerial experience in order to enter into the market effectively and compete with their …show more content…
However different sectors rely on different forms of innovation and therefore each faces different barriers to achieve success. The BIS (2013) stated that innovation can be inhibited by inappropriate corporate governance frameworks. It went on to highlight that SMEs may be prohibited from using the forms of protection available for protecting their innovation, for example patents or trademarks, due to cost. An IPO awareness survey (2010) concluded that SMEs are less aware of IP’s than larger firms, and within SMEs medium firms tend to have greater knowledge than micro firms.
External Barriers
The external barriers which SMEs face is highlighted in figure 2, with many SMEs describing the economy as the biggest barrier to face in terms of growth and entering new markets, particularly in the aftermath of the 2008 financial crisis.
Many SMEs have a lack of time to focus on getting into overseas markets. They also have a lack of awareness and information of the overseas environment in regards to the macro