The purpose of this study is to investigate whether small and medium-sized enterprises (SMEs) should develop marketing strategies which enables them to make an entry to a foreign market. The investigation will also look at the long term prospects of strategic decision by small and medium firms within the UK.
Available secondary data will be the main source for this investigating. Sources include publications about the significance of research such as, relevant journal articles from both academic source and non-academic source. The objective is to analyse and interprets the findings in various secondary sources and a literature review will also be included with this report. Although the research can be argued as insufficient in relation to statistics from field research but the purpose is to answer the research objectives. This also improves the understanding of how SME managers make decisions and how those decisions can affect their business performance. In order to achieve in depth result, an adequate primary research is needed but it also considered impractical as the resources are limited and also time consuming.
The SME stands for small and medium size enterprises and in the UK alone the business sector counts as 99.9% of total 4.8 million. (Small and Medium Sized Enterprise Statistics for the UK and Regions 2008, published 14th October 2009). In the UK Companies Act 2006 it defines a small company which has a turnover of more than £6.5 million and with no more than 50 employees. The medium size business can have turnover not more than £25.9 million and with not more than 250 employees. There are other institutional and regional definitions for SME exits but it depends on the purposes (e.g. definitions by industry or service industry or a statistical firm).
Strategic marketing decisions are those that that the SMEs make in relation to their business activities and its financial performance in both short and long term. For a smaller firm strategic decisions counts as significant importance and may indicate its survival in long run. (J. Graham 2002).
In the current economic climate, SMEs are experiencing higher failure rates and poor financial performance due to the high competitive domestic market, rapid technological change and other volatile market situations (David and Brown, 1992). Such failure is the indication of poor strategic marketing decisions by the management. The economic climate is leading SMEs to explore multiple markets both domestic and international. Despite the current changes in international trade most of the SMEs are not aware of such opportunities that arise from other foreign markets.
Literature Review 1500
The significant growth within the market and the openness for expansion lead SMEs to rethink their strategic decisions that can make them profitable in long run. Emerging firms always focuses towards survival and to create a competitive edge. Therefore in the very competitive market environment strategic decision remains one of the key to success for SMEs. Economic expansions within countries have raised possibilities for SMEs to enhance performance by investing more into foreign markets. The trade flow between nations have significantly increased within the past two decades and continuously growing and encouraging small and medium firms to export which is vital for achieving competiveness. (R. Francisco 2005). Due to the current economic climate the small start up businesses are facing more failure rates than any other businesses. The overall performance levels of SMEs are also declining which is due to unstable economic condition and high competitive domestic markets. (David and Brown, 1992). Such poor performance and failure rates is an indication of poor strategic marketing decisions (Kotler, 2000) and inadequate understandings of how small...