Thanks to the Internet, SMBs can tap in to global markets more readily -- and new research says this is changing the mindset of business owners.
A study released by the Oxford Economics research program, sponsored by SAP, says that small and midsize enterprises (SMEs) are making radical changes to their business models in order to cater for global demand. The survey of 2,100 SME executives in 21 countries says SMEs are also competing with larger firms by investing in technology that makes operations more efficient.
The study found that fifteen percent of respondents already do business in at least six countries; a major transition from a decade ago. Over half of respondents say they increasingly are forming partnerships with suppliers and other vendors located in countries outside their home markets.
In addition, two-thirds of companies believe that they must embrace "business transformation" to compete. Whether in the firm's business model, product offerings, or go-to-market strategy, technology is seen as a major element of transformation that allows SMEs to compete globally -- and is therefore a top strategic priority.
Almost two-thirds strongly believe technology helps businesses achieve longevity and sustainable growth.
In particular, innovative technology is key to entering new markets and improving customer relationships. 55 percent of emerging market and Latin American firms place an especially high emphasis on this concept, and emerging-market companies also are more likely to expect growth to be driven by new product and service offerings (54 percent) than those in the West (43 percent).
Mobile technology, social media and the connection of consumer and business across the Internet were cited as the main ways to build competitive advantages. However, 35 percent of respondents said that failing to understand cloud computing was an issue; 39 percent find it difficult to hire staff with the right level of knowledge, and 43 percent of SMEs indicated they have trouble encouraging employees to embrace social media.
"The road ahead is well marked for SMEs," said Edward Cone, analyst at Oxford Economics. "Globalization, transformation and technology will be the hallmarks of successful small and midsize companies."
Read More: Oxford Economics
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