Essay, 8 pages (2000 words)

Role of internet and challenges faced

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Small and Medium Enterprises ( SMEs ) play a really of import function in the universe economic system. As per research workers, around 99 % of the concern houses in European Union comprise of Small and Medium sized companies. This is true, non merely for European and developed states, every bit good for developing states ( El-Gohary et al. , 2008 ) .

As per research workers, promotion of engineerings and revolution in communicating field has changed the manner people used to believe and move in earlier yearss. Internet has shifted the attack of non merely larger houses, every bit good as that of the little and average size houses throughout the Earth. With clip, demand of clients has increased to several creases and as a affair of fact, Internet schemes are a portion of making and put to deathing concern schemes of houses. With this, it offers good chance to SMEs to acquire into foreign market, every bit good as to better on their placement in the market ; they are working into ( Fills and Wagner, 2005 ) . As per research workers, it is extremely anticipated that utilizing this attack, SMEs will really shortly get down viing with larger organisations. However, as per Whitley ( 2000 ) , there are few barriers to this, due to which a figure of SMEs are non able to take full advantage of the attack of Internet engineering ( Fills and Wagner, 2005 ) . This barrier can be due to the less possible and quality of the house for traveling online, apart from the size of the house and type of clients, they are covering with ( Poon and Swatman, 1999 ) .

With the stiff competition in current concern acumen, it is pertinent to place the ways, in which SMEs can execute better into the international scenario ( Zhoun et al. , 2007 ) . The current paper would concentrate on the literature of globalisation of SMEs, usage of cyberspace and communicating media for the same and challenges faced by SMEs, while taking on these schemes for international enlargement.

Small and Medium Enterprise ( SMEs ) :

In malice of big figure of SMEs in the concern sphere, it is hard to specify it exactly, due to the diverseness in the sort of houses. However, research workers have defined it in different ways as per the national and local demands in different parts of the universe ( Theng and Boon 1996 ; Watson and Everrett 1996 ; El-Gohary et al. , 2008 ) . ) . The tabular array, below, summarizes some of the definitions based on the same.

However, it could be summarised from the tabular array 1 that the figure of employees is the most of import standards for finding the class in most states.

Table 1: Standards, finding SMEs in different states

( Beginning: El-Gohary et al. , 2008 )

Globalization of SME ‘s:

With addition in the presence of SMEs in international scenario, there has been a significant addition in the research on globalisations of SMEs, particularly in International Entrepreneurship context ( Lu and Beamish, 2001 ) . However, many a research workers has been making surveies on globalisation of SMEs, whereas most of them focussed on SME export activities such as the exportation processes, public presentation and Foreign Direct Investment ( FDI ) . As a affair of fact, really less figure of research workers has paid attending towards the public presentation deduction of scheme for globalisation ( Lu, 2002 ; McDougall & A ; Oviatt, 2003 ) . On the inauspicious side of this globalisation facet, SMEs frequently face jobs and hazard from come ining into some foreign market. This can be due to miss in their internal capablenesss like get bying up with fiscal and managerial resources. Here, it is obligatory for the SME to achieve the cognition and accomplishments required for come ining into the new market ( Lu and Beamish, 2001 ) .

As a affair of fact, there have been assorted researches, done in the yesteryear, which has shown that SMEs from Asia, Europe and many other states are taking diverse stairss towards international ventures. In recent old ages, this has shown an emerging tendency for SMEs to venture into exporting and planetary ventures. Furthermore, widespread utilizations of cyberspace and E-Business engineerings are doing planetary operation ; a more cost effectual and feasible option for them, therefore, supplying them the option to cover with diverse patronage expeditiously throughout the Earth irrespective of their smaller size ( Knight, 2001 ) . SMEs can acquire competitory advantage from the use of these engineerings, so as to get the better of the restraint of achieving cognition and accomplishment required for viing with the larger houses. As a affair of fact, this would give the enterprisers a range to better their public presentation in planetary scenario and cut down on the competitory force per unit area ( Lu and Beamish, 2001 ) .

Influence of Internet in Globalization:

Since the origin of Information engineering, there has been a drastic influence of the same in the concern sphere throughout the Earth. E-Business and other cyberspace characteristics have offered good beginning for planetary market entree for SMEs ( Simpson and Docherty, 2004 ) . As a affair of fact, non all SMEs are doing usage of this characteristic of information engineering ; nevertheless, research has shown that, there is a assorted reaction from this group, where some are still trusting on the usage of their conventional manners of concern procedure. On the same side there are SMEs, which are doing full use of E-Business and other cyberspace constructs to better their placement locally and in planetary context. As of now, research workers have found that two tierces of concern houses are acquiring online ; nevertheless, SMEs are still dawdling behind larger houses by half in taking such enterprises ( Simpson and Docherty, 2004 ) .

Internet applications can ease the velocity of globalisation for SMEs by extinguishing the function and demand of intermediate bureaus. With the usage of web sites and Electronic mails, SMEs can ease their globalisation procedure by sweetening on communicating procedure with clients, providers, employees and mark clients in the planetary market ( Namani, 2009 ) . As a affair of fact, this would farther assist SMEs to keep a good place in the market by making house ‘s Research and Development, planetary gross revenues publicity and other market intelligence activities ( Hamill, 2000 ; Jawa and Chen, 2006 ) . Apart from this, Internet and its characteristics help in increasing house ‘s web in the market by acquiring them in touch with agents, mark clients, authorities bureaus, and other organic structures. This, provides a visibleness, is cost effectual and imparts efficiency in application ( Jawa and Chen, 2006 ) . Furthermore, this every bit good increases the opportunities of coaction in between houses during globalisation. However, there are opportunities of some competition in the planetary market at the initial phase due to internet exposure. Research workers have found that SMEs in United Kingdom and Ireland face such competition more frequently due to pricing and publicity factors ( Jawa and Chen, 2006 ) .

Internet helps in cut downing the dealing cost by rushing up the globalisation procedure. Internet can be used to garner of import information pertaining to the mark market. Therefore, reduces hazard and clip wastages. Furthermore, E-Business provides velocity in passages, thereby doing it easier to venture into foreign market ( Guest Editorial, 2005 ; Namani, 2009 ) . Adding into it, B2B and B2C portals are agencies, which offer SMEs to convey about their merchandise to the terminal users every bit good to ease two manner communications between them. It eases the procedure for clients irrespective of their physical presence. They can acquire what they want, when they want and wherever they want. Therefore, it saves clip and improves client service ( Petersen et al. , 2002 ; Jawa and Chen, 2006 ) . Apart from these, online passages add farther into increasing on the client base. Here, is it of import to observe that the SMEs need to develop their on-line proficient capablenesss to manage such characteristics. E-commerce is related to the commercial activities and farther helps in Enterprise integrating and managing supply concatenation and client dealingss ( Jawa and Chen, 2006 ) . The image, below, represents assorted facets of cyberspace, which have been discussed and could be used by SMEs for globalisation procedure measure by measure. First for doing their presence felt in the market, farther on utilizing portals and dealing characteristics to increase their capablenesss and at the terminal incorporating their concern for proper operation.

( Beginning: Jawa and Chen, 2006 ) .

Challenges Faced:

In contrast to the influence of cyberspace, there are surveies, which show that due to equivocal apprehension of internet communicating and E-Business constructs, SMEs frequently face jobs in implementing them and sometimes even land up misapplying it. At a few cases, some research workers have used Internet selling, E-Commerce, E-Business as same. However, they are all rather different in constructs and significance. Detailss and difference of their range can be viewed in the image below. The range of e-mail and internet selling is superseded by E-marketing and farther on by the constructs of E-Commerce and E-Business, which are of broader constructs holding an intense range in utilizing cyberspace and communicating engineerings ( El-Gohary et al. , 2008 ) .

( Beginning: El-Gohary et al. , 2008 ) .

Furthermore, there have been some challenges faced by SMEs while taking such determinations. There are some internal and external factors, which pressurize the enterprisers while taking concern determinations ( Poon and Swatman, 1999 ) . Largely SMEs are household run concerns, so there are different sorts of vision and consequently concern proprietors take stairss towards their realistic marks. Some prefer maintaining their concern little, to carry through their household life outlook, whereas there are a few, who bring about alterations in their attack and present Internet and E-Business constructs into their operation to achieve growing and derive competitory advantage ( Poon and Swatman, 1999 ; Jawa and Chen, 2006 ) . Furthermore, affordability and handiness of resources, every bit good, add into the restraint towards debut of such constructs in SMEs.

The external factors include the authorities support, communicating web and the legal demands that are needed on manner to acceptance of these engineerings. Furthermore, mark market, market substructure and the rival ‘s engineering besides play an of import function in taking determinations ( Timmers, 2000 ; Simpson and Docherty, 2004 ) . Apart from these factors, houses are largely dependent on the Internet Service Providers ( ISPs ) for implementing any technological construct into their organisation. Here SMEs become much dependant on the private ISP in geting cognition and accomplishments for proper use of the engineering. As a affair of fact, in some of the instances, hazard factors are at that place if the ISP is non skilled plenty to reassign proper cognition to the house and this may take to jobs in the long tally ( Simpson and Docherty, 2004 ) ..


Much has been speculated about the globalisation of SMEs and the function of cyberspace and communicating engineerings in giving competitory advantage to these houses in the foreign market. However, this has been seen that SMEs are better at deriving competitory advantage over larger houses by utilizing these Internet constructs as they can develop personal dealingss with their mark consumers, every bit good have the capablenesss to supply usage made merchandises to their clients based on their demands and demands ( White, 1998 ) . Furthermore, as SMEs venture into foreign market ; it becomes imperative for them to hold technological border over their rivals, so as to derive better portion in the market. ( D’Cruz and Hussain, n. d. )

In short, debut of Internet has created a really deep desire among the SMEs for embarking into foreign market. They are acquiring more focussed toward developing web sites and utilizing other constructs of Internet and E-Business, irrespective of any long term uncertainness. To get by with the of all time demanding market and promotion of engineerings, SMEs are taking this construct as pertinent, so as to be a portion of the game. Therefore, one of the of import facets for SMEs is to better on their capablenesss non merely technological, every bit good as cultural ( Zhoun et al. , 2007 ) ; so that the alterations could be adopted successfully in their operation. The house, which has got in-house resources and capablenesss, has more opportunities to win in market than those who outsource such cognition. ( Tiessena et al. , 2001 )

( Word Count: 2102 )

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