Research On Sme Competitiveness And Growth Strategy

Since the establishment of the socialist market economy in China, the role of small and medium-sized enterprises has become more and more important in both social and economic life. They play the role of great importance in stimulating economic growth, creating more jobs, encouraging the nongovernmental investment, optimizing the economic structure, activating the market competitions as well as promoting technology innovations. Nowadays, the favorable economic environment, governmental supports and fast development of information technology have provided wonderful chances for China's small and medium enterprises. However, meanwhile the furious market competition and the intrinsic absence of strategies bring tough challenges to them. Against this context, how to employ the most proper competition strategy and growth strategy so as to keep enterprises' long-term healthy development has already been put in the first place on the agenda of small and medium enterprises. According to the competition theory proposed by Michael M·Porter, to keep their leading position small and medium enterprises may take three basic strategies—cost leadership, differentiation and concentration; and some growth strategies to adopt such as merge & acquisition, internationalization, model management and so on. This paper will focus on the above-mentioned strategies' contents, features and application, trying to give detailed research and analysis on all these strategies. Then, with the case study of Xu Yang Coking Group's strategy choice during its ten-year development, the paper will further illustrate the importance of the proper strategy choice to the small and medium enterprises' long-term healthy development, and will also give some modest suggestions on how to adapt proper strategies. Last but not least, it will analyze some strategic misunderstanding existing in the management of China's small and medium enterprises and then accordingly suggest some solutions to this problem.