Fundamentals of Entrepreneurship: Small & Medium Enterprise

Small firms play an important role in Entrepreneurship. Increasingly, small and medium sized enterprises (SMEs) are confronted with international competition and are forced to play a role in international markets. Usually SME have a small financial base, a domestic focus and a limited geographic scope.  

This study inspects the obstacles faced by SMEs along their path of internationalization. The work also extracts the full understanding from managerial experiences examining the problems faced by SME exporters in two different markets, transitional and developed, which are represented by two countries Vietnam and USA.

The markets in both countries are transitioning away from their historical bases to new economies. Vietnam used to be a country that depends on its agricultural goods but now has a more oriented economy with exports playing a larger role. Vietnam has made a very noticeable transformation and development in terms of building their economy and their market growth. But Vietnam still faces some obstacles regarding their government regimes because being a socialist country has inhibited them from improving the development of effective private sector managers.

Evidence shows that many managers do not have the efficient skills and support to contend with the upcoming growth that the competitive global market is demanding.

Idaho USA has gone from being primarily a producer and processor of natural resources and agriculture to a producer and exporter of technology-based products, Idaho’s main production industries include but are not limited to wood products, food processing, agricultural products and high technology manufactures.

Idaho has also developed its ways to overcome the demand of the global market and has started to focus on high technology manufactures more than agricultural products which was its main source of export. This change has brought Idaho exports from US$1.5 billion to US$3.2billion in terms of products profits and outcomes.

A study was conducted in both countries to find out the difficulties of conducting international business and what the solutions to overcome those difficulties are. In Idaho managers face problems such as inadequate training for customers, international measurement standards and understanding logistics in the receiving country. Managers understood that those problems cannot be avoided and the solution to those obstacles is to learn how to deal with them and find solutions after their occurrence.

In Vietnam many companies have difficulties related to poor product quality or products that didn’t satisfy the importer, these problems are usually not limited to exporting but they are a result of poor efficiency, and poor understanding of customer satisfaction. In order to over come those problems they have to improve there management skills in a major way, and have a full understanding of the product quality expectations in the international marketplace.

In conclusion the comparison of businesses in Idaho USA and Vietnam provides surprising similarities and striking contrasts.

Referred to emeraldinsight.com