How SMEs Can Build a Global Approach For Growth
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The Small and Medium Enterprises in India have gone through a whole list of changes over the past few years. While a lot of them still function in the unorganized sector, the way they work has considerably changed. With demonetization and the push from the government to digitize, SMEs have adopted technology too in their processes.
However, there’s still a lot that needs to be done to make way for global development or business expansion.
Entrepreneur India spoke to experts about what can SME owners do to undertake a global approach for growth.
Adopt & Digitize Fast
While this has been a rising scenario for SMEs, the need to turn to digitization is only higher if they want to expand their business.
Global Expansion or Export of products/services is looked over as a boost to growth by startups, especially in the manufacturing sector. Kartik Hajela, Co- founder & Vice President, Log 9 materials said that the reason is high value realization and easier acceptance of newer and more efficient technologies and products in other markets. But expansion to markets abroad is easier said than done.
Meanwhile, Nivesh Khandelwal, Founder and CEO, LetsMD, believes that with the increasing mobile penetration and the internet providing access to global markets instantly, "Going Global" has now become easier than it was a decade ago. “SMEs need to adopt latest innovations and digitise their offering so as to gain access to global digital platforms,” said Khandelwal.
Speed to Market
SMEs are often known to work at their own pace, building avenues for growth slowly and steadily over the years. However, Khandelwal believes that that needs to change. To become globally competitive, the SMEs in our country have to increase the speed to market by accelerating innovation and product development. “SMEs need to bring agility to their systems and processes at a time when disruptions are happening quite frequently and consumers have started demanding instant gratification,” he said.
An important aspect while toying with the idea of expanding your business is to first look at the market and understanding the said market. Hajela said that their approach has been to first do a region and industry based market sizing and resource estimation, basically a region and industry based cost-benefit analysis. “This helps us to decide which region or sector should be focused upon as expanding abroad is a costly affair and thus targeted allocation of marketing resources for the same is of utmost importance,” he said.
He also added that participating in exhibitions and conferences in the funneled out regions gives first round of interactions with possible customers and thus helps generating potential leads. “Also taking into account various government initiatives to support exporters at an early stage itself can lead to better product pricing making it cost-competitive for customers,” said Hajela.
To have a global approach, SMEs need to more and more understand the importance of technology. Traditional SMEs will have to adopt a technology first approach, believes Khandelwal. “What this means is that any business challenge they face, they will have to ask themselves how tech can solve it rather than people. Digitization of processes should be another focus area,” he said.
Sharing examples, he said that things like Warehouse management, order management, order tracking etc has to be digitized to enable speed of processing. “Customer acquisition strategy has to be slowly geared towards and shifted to digital channels as all decision making - for buying products & services will move online within a decade,” he added.
Hajela too said that a proper technology-enabled logistics or supply chain support system could help SMEs plan and optimize their shipment costs as well as lead times of delivery as their shipment volumes are generally irregularly spread over a period of time.