Enhancing The Competitiveness Of Smes PDF Download

The internationalization process currently under way, which is being encouraged by the opening up and liberalization of national markets, and above all by the appearance and proliferation of new information and communication technologies (ICT), is generating important changes in the economic system that are having direct effects on the foundations upon which the firms base their competitiveness. Small and medium sized enterprises (SMEs) are today facing this turbulent environment harder than multinational companies due to their lack of resources and are constantly challenged and have to struggle to remain competitive. To achieve competitiveness, theories suggest that SMEs should seek to adopt a differentiation strategy to retain its current market share and be involved in continuous growth in order to expand its existing market share. Literature suggest E-business as a source of competitiveness in this "New economy" however a gap exists when it comes to the effect of E-business on small firms for this reason this research papers aims at examining the effect of E-business on the competitiveness of SMEs by answering two main questions: How does E-business contributes to the differentiation strategy of SMEs and how does E-business facilitate the growth of SMEs? To answer these questions two case studies were conducted on SMEs fulfilling predetermined criteria and vast literatures were examined and it was found that through enabling the introduction of innovative products and processes, E-business allows SMEs to differentiate themselves from competitors. It was also found that by allowing low cost, low risk internationalization, E-business encourages the expansion of a firm's customer base giving a chance for growth. As a conclusion it was suggested that all SMEs seeking to improve their competitive position by differentiating themselves from competitors or by increasing their share of sales without incurring high costs should engage themselves in E-business.