How SMEs can find their place in a rapidly globalising world of business
In an increasingly globalised marketplace, companies must adjust to operating internationally. How does this changing economic landscape affect SMEs?
New customers are the key to the expansion of any organisation. And by capitalising on readily available new technologies, social media integration, web conferencing and e-commerce, small and medium-sized enterprises (SMEs) have the chance to reach more people than was ever possible before this digital boom.
SMEs can be more flexible
It is important for SMEs and startups to take into account the impacts of an increasingly globalised business world, especially when looking to compete with the larger pool of resources available to bigger companies. Small businesses usually have a smaller turnover than large already established organisations, but they benefit from increased flexibility and ability to adapt.
Mr Tej Kohli, Chairman of Kohli Ventures, a global investor in innovative ideas, disruptive technologies and dynamic businesses, said: “As a major investor in SMEs throughout the world we only focus on firms that have the potential to be global players. If you take start-ups that went on to be major global success stories, they were only able to achieve exponential growth by having a concept that works globally.”
Mr Kohli added: “Furthermore, operating in markets across the globe reduces risk as not all your market eggs are in one basket and nor are you dependent on the well-being of one particular national economy.”
New international markets
With the effects of the recession finally starting to subside, the world’s economy is becoming more stable- with this comes the emergence of new, profitable markets from overseas, most notably in Asia. With the UK looking to promote trade relationships with China, small businesses are seeing opportunities to reach this lucrative new market.
Greg Zemor, CEO of Neteven, a company specialising in marketplace management, said: “We make it our utmost priority to provide the strongest support for foreign sellers. Good preparation along with the help of experts is key to the success of cross-border business development. There are more and more solutions available to online retailers wishing to take up the challenge of exporting to China, and it is up to them to seize this opportunity.”
Businesses are beginning to see the importance of international trade, and are putting globalisation at the heart of their business strategies.
Mr Zemor added: “Globalisation is at the core of our business platform, with our primary purpose being to open up cross-border trading opportunities to localised retailers so that they can sell to consumers abroad.”
Meeting increased customer demand
Alongside new opportunities, an increasingly globalised economy also raises some issues.
"Satisfying customer demand is always a business’s priority, regardless of whether it’s for domestic or international markets. Similar to satisfying customer demand, pricing must remain competitive in order for a business to move forward and survive," said Brendan Murphy, CEO of Taylor Bins.
Customers of the digital age, used to easy access to global choice and the convenience of mobile devices, demand more from their providers.
Francis Mainoo, Deputy Managing Director of consulting company Lowendalmasaï, said: “By selling online, businesses are able to customise products and receive instant feedback post sale. Clients are increasingly looking at the whole customer experience, which means that the product will be evaluated jointly with complimentary services, including the administrative support received.”
It is becoming progressively more important for businesses to adapt to this new climate and satisfy the increased demand for more choice and competitive prices from customers who are used to variety on a global scale.
“Having a good idea is valueless if you're not able to quickly transform it into profit and, most importantly, into cash. An excellent cash conversion efficiency will distinguish successful global players from ‘surviving’ ones.” Mr Mainoo added.