A Study On Competitive Strategy And Flexibility For Small-sized Enterprises

Three groups of data shown:1. In USA and other advanced countries, small-sized enterprises (SEs) are among the 98-99% of overall companies and 60-80% of a country's total tax revenue comes from SEs, employment 88%, sales revenue 65%, value-added products 61%, export 50%, and investment 60%.2. In China, there are more than 3.98 million SEs, among which, 65% closed within 5 years, 19% survived only for 6-10 years, and just 13% run business more than 10 years, (source from China SME network, April 2003)3. According to data from a survey by China Industrial and Commercial Committee, 6 million retrenched labor force from state-owned companies were re-employed by SEs in 1998, among which, 3.53 million employee worked in non-state-owned companies, 2 million in privatized companies, and 1.43 million run own business.From above data, it clearly shows that the development of SEs is the effective way to keep economy growth and lower the unemployment rate in many advanced countries. SEs have been increasingly becoming an important part in one country's economy growth. Chinese government has already been dedicated on nurturing the development of SEs over the years. However, it is still a main concern on how the small enterprise can survive and grow in the competitive economy.This project studies on the Sales Strategy and Flexibility for Small-sized Enterprises in the Competitive Environment. It is closely related not only to the small enterprise's investment direction and survivor strategy, but also to the ability for a sustainable growth in future. In China, the prosperous of small-sized enterprises can lead to the re-employment of retrenched people as well as the job opportunities for the surplus labor from rural areas. One of effective ways to cut the unemployment rate these years in USA, Japan and other advanced countries is "To strongly develop SEs in order to create more job opportunities".Therefore, China has set up relevant policies to encourage and promote the development of SEs over the years. Currently, the research projects on SEs in China are mainly focused on capital raising, technology innovation, industrial structure and so on. It is relatively little research concerned on how to effectively nurture and develop SEs from the factors such as market demand, competitive environment, sales strategy, and risk avoidance. This project is right focused on the research of above aspects and hope to provide a thorough and practical guide for the small-sized enterprises, especially these retrenched people on how to make a right investment and avoid the risks in the competitive market.This thesis discusses three basic competitive strategies for SEs: Avoiding competition, Differentiating competition, and Cooperation with competitor. This project creatively proposed the view of "Flexible Competitive Strategy" and systematically analyzed this strategy on the basis of a number of real cases. Furthermore, the two separated cases cited in this thesis were true cases that the author gained from her previous work as a marketing consultant and they strongly supported the "Flexible Competitive Strategy" throughout this work.