Limitations for Sme Internationalisation

Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with a(n) ____ structure.

According to (Koch, 2001), market barriers like tariffs, government policies, access to distribution channel, customer loyalty, network effect are some of the many barriers preventing or making it hard for companies to set up a new business in the foreign market. For instance, having customer loyalty in the existing foreign market helps the existing companies to retain their customers and discourage new competitions.

The main barrier of internationalization is due to the apprehension of the differences in terms of economic and/or political and cultural situation: the psychic distance. When dealing with psychic distance, companies tend to be risk averse.

Boter, H. and Holmquist, C. (1996). Industry characteristics and internationalization processes in small firms. Journal of Business Venturing, 11(6), pp.471-487.

Internationalisation is a process a firm goes through when expanding outside the national market. Small firms will want to go through this

It is vital to understand the internationalization process of small to medium-sized enterprise (SMEs) for them to compete internationally. There are various international approaches that companies can adopt in the process of internationalization. For example, Uppsala Internalization Model (U-Model), The Network Theory, Dunning’s Electric Paradigm and Transaction Cost Theory.

Over the course of last forty years, the government perceptions and importance of small and medium sized enterprises have changed from being equivalent to technological backwardness and having modest economic contributions to containing such dynamic and innovative enterprises which contribute to and are an integral part of the economic well beings of the governments. Government all over the world have started to shift their focus heavily on SME’s and business enterprise policies related to them because of the social and economic welfare contributed by them. (Storey,

International business involves business activities that crosses borders ADDIN EN.CITE Brooks2004145(Brooks et al., 2004)1451456Brooks, I.Weatherston, J.Wilkinson, G.The international business environment2004New JerseyFinancial Times Prentice Hall9780273682479http://books.google.co.ke/books?id=rxzkqOPM9KUCBrooks20041451451456Brooks, I.Weatherston, J.Wilkinson, G.The international business environment2004New JerseyFinancial Times Prentice Hall9780273682479http://books.google.co.ke/books?id=rxzkqOPM9KUC( HYPERLINK l "_ENREF_2" o "Brooks, 2004 #145" Brooks et al., 2004). International business does not exclude small companies neither does it only occur when a company set up operational base ADDIN EN.CITE Shenkar2004144(Shenkar, 2004)14414417Shenkar, OdedOne More Time: International Business in a Global EconomyJournal of International Business StudiesJournal of International Business Studies161-1713522004Palgrave Macmillan Journals00472506http://www.jstor.org/stable/3875249( HYPERLINK l "_ENREF_7" o "Shenkar, 2004 #144" Shenkar, 2004). The key consideration for

​The term “SME” is commonly used to refer to Small and Medium-sized Enterprises. The term covers a variety of definitions as well as measures. However, in most of the various definitions of what is an SME, employment is the most widely used criterion for categorizing the size of the firm. Moreover, SMEs are often defined as businesses with fewer than 500 employees. However, a number of countries, including some in the European Union use a lower cutoff of 250 employees. SMEs are important in the economy because they have some unique benefits to the economy chief among these being employment and job creation among others. The following discussion explores the impact of SME to the economy, especially in regards to employment and the creation of jobs among others.

The purpose of the small and medium enterprises in ensuring its prospect future through growth is not only about doing further business or making more money or acquiring greater kudos through larger size. Where knowledge management maturity is high, there the firms are realizing handsome profits and significant increase in growth. Growth is a strategy that basically addresses the question of unsafe and doubtful environments, with the help of attainment of greater influence over the environment within which the enterprise works. In the European economy, SME’s are recognized as the primary players. SME’s in Spain, signify that from all registered businesses which are more than 99.8%, almost 70% of the employment and make the contribution 65%

A popular method when internationalising is to use an alliance or joint venture. Critically evaluate the opportunities and challenges facing small and medium sized enterprises

Firms tend to move through three phases of export development: pre-engagement, initial exporting, and advanced exporting. As they do so, they tend to (i) export to more countries and (ii) expect exports to grow as a percentage of total sales. In addition, they also tend to (iii) diversify their markets to more distant countries and (iv) move into environments that are increasingly different from those of their home countries. (Figure 13.2).

The intersection between globalization and local entrepreneurship, defined by specialists as “international entrepreneurship”, has started to receive more and more attention over the last two decades (Mathews and Zander, 2007, p. 395). Small and medium-sized enterprises (SMEs) play a significant role in the global economy and have a big impact on incomes, outputs, and the employment sector.

In India, Micro, Small and Medium Enterprises (MSMEs), contribution to GDP exceeds 17% and over 40% to industrial production. MSMEs’ share of total exports is 40% and a large share of additional exports indirectly, through third parties, trading houses, etc. Traditionally, export sectors in which MSMEs operate in India have been Textiles and Garments, Leather products, Gems and jewelry and Handicrafts. MSMEs’ also have a large share of market in industrial goods segments like Electricals, Electronics, machine parts, plastics, etc.

The importance of small and Micro Enterprises (SMEs) in the economy of any country cannot be overlooked. In fact for nearly 15 years, most researchers dealing with economic planning have highlighted the significance of these enterprises stating that they are a key player in realizing any country’s economic goals. As such, governments as well as other organizations with interest in development are laying plans and strategies to promote the establishment of Small and Micro Enterprises. This is seen as a move to ensure that there is full participation of SMEs in the country’s economy. The Small and Micro Enterprises have been known to contribute to a large extend as a source of innovation, entrepreneurial skills as well as source of employment. For example, statistics in 25countries of the European Union show that 99% of the jobs provided to its citizens come from the micro, small and medium-sized enterprises. Rowe (2008) points out that the British economy relies heavily on the participation of SMEs. On the other hand, 99% of the UK’s economy is composed of small and micro enterprises.