SMEs must see the bigger picture
18th November 2010
BANDAR SERI BEGAWAN
Thursday, November 18, 2010 – Page B22
By Debbie Too
Published on The Brunei Times
SMALL and medium enterprises can start to differentiate themselves by first taking a step back to view the “short term views of a product and measure it against the long term view of sustainability”.
Dr Wilson Chew, a business strategist and chief executive officer of StrategiCom based in Singapore said that most SMEs tend to concentrate on the profitability of the service or product that they provide which tends to give them a short life cycle in the market.
He explained that in the initial period of an SME’s “survivability” and ensuring that the company earns a quick dollar due to the cost of operations, the return on investment becomes important to them.
“Especially in startups that are not innovation driven, they see an opportunity in the market where they can provide a product for demand, and this is not a mistake, but I think it is a phase of an organisation that they inevitably have to go through,” he said.
One of the examples he gave was surrounding the peripherals of the iPad craze, where companies were introducing and pushing for iPad accessories such as external hard drives, casings and so on.
“The whole ecosystem around the consumer industry is powered by SMEs, and we see it in Taiwan, Japan, Malaysia and these are generally not breakthrough innovations. Their system is getting the products into the market and that becomes so important, which has a short life cycle,” he said.
Dr Chew recommended that one way for companies to re-engineer this from the start, is for business owners to ask themselves, before doing anything even if they have a product, to “take short term view of that product, and measure it against the sustainability of the company in the long term”.
“While we deal with the issue of fixed and variable costs, lets take one step further, and ask ourselves, what will happen in three years, five years and then 10 years?,” he said.
His concept of doing this was explained further because for an entrepreneur to start when he’s 30-years-old, and in 10 years, it would make him 40-years-old, “it is still a young and vibrant age”, and entrepreneurs have to ask themselves what is going to happen to their company.
“They have to address the issue of how they can, first, develop a corporate brand that is reputable, to stand behind the product. How can the company build one corporate brand, and how can you turn that product into a cash cow brand, then go back to profitability and plough behind their next product or move to new products if they have to,” he said, adding that products can be “distinctively different”.
In Brunei, however, most of the SMEs target the “small” consumer market that resides within Brunei, the Brunei Government or Brunei Shell Petroleum, and Dr Chew emphasised that entrepreneurs and business owners would think to venture “beyond the current demand”.
“There are opportunities beyond Brunei that should be addressed and that would be the opportunity to also grow, and therefore a strong brand is necessary,” he said.
To do this, local companies should remember two things to know exactly how to position their brands in the chosen market and to not be seen as identical to existing players with similar products in that market.
“As an SME, you cannot go into a new market and do what the ‘big boys’ are doing, because they’ve got deep pockets and large resources; that’s why (SMEs) need to be more targeted,” he said.
He explained that when there is differentiation in the market, an SME would know exactly what type of segments they can target.
Dr Chew said he will elaborate further on SME branding in his session today at the Local Business Development Forum 2010 that will be held at the Grand Hall of the Empire Hotel and Country Club.
The forum is organised by the Asia Inc Forum, and partnered by Baiduri Bank, the Brunei Economic Development Board (BEDB) and Brunei Shell Petroleum.
The one-day business conference themed ‘Tiny Ripples, Huge Waves: Creating Greater Competitive Advantage for Local Businesses’.
The Brunei Times
Source URL: http://www.bt.com.bn/business-national/2010/11/18/smes-must-see-bigger-picture