SMEs survival in the highly competitive industries has become an issue of crucial importance because small and medium enterprises are recognised as engines of the economy of any country. The common assumption is that a good number of newly formed small and medium companies find…
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The SME sector adds to the economic growth of a country through employment generation and overall sustenance of the economy locally, nationally and globally. Therefore, survival of SMEs needs to be discussed with high priority on developing such strategies that help in the growth of SMEs at regional, national and global level.
The world economy depends to a significant extent on the success of small and medium business, which necessitates the urgency of making an inquiry into the reasons of collapsing of small and medium business firms. The research question motivates analysis of the issue from different perspectives like what efforts the SME entrepreneurs are making for their survival, what guidance and financial help the governments and banks are providing worldwide for the survival of the SME industry and a number of other survival strategies. Curiosity arises on the causes of not surviving in the market place due to the associated risks. SMEs are not fighting a lone battle against odds; active government support is provided to them as they are the backbone of a country’s economy. This is the reason why so much attention is paid to the growth of SME sector in all industries.
In comparison to small business, medium enterprises are in somewhat better position; they accept the challenges but small entrepreneurs’ market position is very critical due to high cost of raw material, energy, inflation and lack of ready finance. Taking the example of Canada where small business represents 98% of all business, the government is playing a leading role in clearing the roadblocks to survival and growth of small business and leaving no stone unturned in its efforts for SMEs survival. The government is promoting SME by celebrating Small Business Week 2009 and introducing Canada’s Economic Action Plan, providing the mechanism to small and medium businesses to come soon out of the repercussion
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characteristics of the business organization, its management, its relationships with other entities and other contextual variables that lead or contribute to the business becoming successful. Furthermore, the focus is on a particular type of business and on those belonging to a particular country.
The recession weakened the ability of lenders to meet the demand for loans, especially without security. The economic downturn brought about financial difficulties in SMEs and at the same time, lenders could not guarantee access to additional funds. Some of the SMEs were forced to shut due to financial difficulties and bankruptcy.
However, I believe that risk management is not beneficial for every organization. According to me only large organizations get mostly benefitted by the implementation of risk management techniques. On the other hand, small and medium enterprises hardly get any benefits from the implementation of risk management techniques in their system of operation.
But times have changed with the globalisation regime multinational enterprises have made a distinctive mark on the local markets as well. While on the one hand this affected the economic factors of the region or country, on the other the SMEs started realising the need for pressing changes in the management of different aspects of the enterprise.
Governments in many countries are providing benefits so that economy can flourish with the SME culture, governments are focusing on trade and investment liberalization so that even foreign direct investment can add to the nation's revenue; other government steps include privatizing the public institutions and providing tax relief to the small businesses.
However, globalization also raises the risk of marginalization of countries, in particular the poorest countries, and the most vulnerable groups everywhere"2
"Several CEI countries, which are moving towards a free market economy, fear, that the globalization process of the world economy and markets might affect an economic texture that is still unprepared from a technical, financial, organizational and social point of view.
urism sections, varying demand prototypes, the assertion for hospitality products in good quality and presents, the lessening charisma and mounting standardization of presents time after time initiate new questions for the quality assertion of SMHEs. Great quality of services
The effect of globalization has consequently resulted in industrialization in developing countries. Many SMEs have then been set up through industrialization and therefore it has created employment opportunities.
Developing countries are among other factors,
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