The Strategic Growth Plan for an SME Essay Example | Topics and Well Written Essays - 4250 words

The Strategic Growth Plan for an SME - Essay Example At that time nobody appeared to be interested in the product. But today Microsoft Vista is widely reviewed and talked about even before its formal launch. lacked a degree of functionality and achieved little popularity. Coke started off in 1886 when in May 1886 Dr. John Pemberton a pharmacist from Atlanta, Georgia started selling for five cents a glass. The first year of operation ended with the figures of $50 worth of sales Vs the production cost of $70 i.e. a net loss of $20. Today Coca-Cola Company is the world's leading manufacturer, marketer and distributor of nonalcoholic beverage concentrates and syrups. Infosys Technologies, a global consulting and IT services company was founded with some borrowed money by it founder Narayana Murthy. But today it is managing the IT needs of world's who's who in the business field. Small and Medium Enterprises is therefore the beginning of a giant stride for business strategists and determined entrepreneurs. SMEs need to improve their business skills to help them survive and grow. What is required to make an SME a competing and a big company is a vision and a strategic growth plan implemented with grit and determination by the owners/ managers. A strong SME sector contributes to a flexible and buoyant economy, creating jobs, providing the foundations for the large companies of the future and contributing to the nation's long term growth and international competitiveness. Firms can grow by interacting with key local players including universities, customers and research centres (Asheim & Isaksen, 1997). The main barriers to growth for smaller firms arise in the form of financing, organization and competition from new products or companies. A strategic growth plan calls for managing all such eventualities. SME Sector As far as IT sector is concerned China and India are in the forefront of global turnaround in IT enabling services and business process outsourcing. Both these countries have taken major share of the outsourcing revenue from the developed nation. Since initiating economic reforms and open policy in late 1970s, China has achieved tremendous success in economic development. The economy has changed from a centrally planned system to a more market-oriented one with a rapidly growing private sector. China now is the fastest growing economy in the world, with GDP expanding at an annual average rate of around nine percent over the past two decades. China has started recognizing the potential of SMEs and visible efforts are there to prove the point. For example, China organized its first SME fair in October 2004. Despite the progress in privatization, a considerable part of China's economy remains controlled by large State Owned Enterprises (SOEs), many of which are termed as inefficient and unprofitable. This slow march towards opening up of economy has prevented the inflow of IT led outsourcing into China to a certain extent. Major beneficiaries of the outsourcing boom are the Small and Medium Enterprise (SMEs), that effectively means less growth potential for SME sector. India on the other hand has proved to be a grooming ground for SME sector. With the exodus of IT companies from Europe, America and other parts of the world towards India, the burgeoning Business Process Outsourcing (BPO) sector promises to be a growth