Brand Building via Crowd Sourcing

Small & Medium Enterprises (SMEs) are prime players in any economy and its progress in a big way. Yet, many of these enterprises often abstain from brand building exercises. Industry experts attribute this absence to lack in infrastructure, capital, management, among other things. Often, SMEs are found busy in making products rather than branding or marketing them to their consumers which could often push them back in the competitive market.

Creating an identity
Branding prepares an exclusive identity for an SME and prepares it for competition in adverse marketing situations and also cements a strong connection with their customers. One needs to understand that potential customers recognize brands through a variety of media including visual communication (logos, colors, imagery, etc.), communications (websites, brochures, sales representatives, etc.), and behavior (relationships with customers, partners, employees, government, society, etc.). Also, in case of SMEs, branding could very well refer to their specific products and services which need to adhere to certain levels of quality. Brand refers to the way the customer knows the company and its business. Within the company also, interactive workshops and training sessions need to be conducted to apprise them about the brand.

It helps the customer in differentiating its services and makes the SME exclusive in its audience. It also supports the organization in generating a positive image and also contributes to the healthy growth of an organization. It also helps SME in connecting with future clients and build future associations. They also play a vital role in consumer decision making process as loyal customers often stick to their preferred brands.

Using technology to our benefit
Modern technology also offers SMEs a wide variety of choices to boost their customer base by brand building across various media. SMEs can organize a wide group of people to perform their special tasks related to branding and marketing which were earlier performed by specific individuals. The process termed as crowd sourcing is gaining popularity and is preferred choice for many brand marketers.  

While crowd sourcing is beneficial, it's important to do it right

With social media on the rise, brand building exercises have to be more intensive and planned in their execution. Once the branding is achieved, SME can benefit from its goodwill. With their limited resources and limited budget, 'crowd sourcing' can be a viable solution for many companies.

Crowd sourcing campaigns need to be planned carefully or it can prove to be a big disaster for the company. One needs to be precise in their brief because once the information is transferred, it travels to further customers in the way it was published before. There is no room for errors. SME should also be open to offer incentives to the customers who may be attracted to a particular company because of the prizes offered. The customer also needs to be assured that he is not overwhelmed with company’s promotion drive which may also result in a negative impact. 

Crowd sourcing offers innumerable ways of promotion and one needs to be precise in their choice. Even though it involves a wide range of consumers but the process needs to be treated in a professional manner.

'Buyer Seller Meet' - A platform by IndiaMART.com for SMEs in Healthcare sector to Network & Grow

The medicine and pharmaceutical industry in India is truly cutting edge. It has seen plethora of advancements in the past few years. Messe Duesseldorf India Pvt. Ltd. endeavors to constantly remain in the forefront of the changes, sweeping advances in the field. In association with MEDIC and IndiaMART.com, India's largest online B2B marketplace, as its online media partner Messe Duesseldorf has put its best foot forward with the support of Indian associations such as AIMED (Association of Indian Medicals Device Industry) and IAPMR (Indian Association of Physical Medicine and Rehabilitation), as well as vital international institutions to bring the medicine and pharmaceutical industry under one roof at Bombay Exhibition Centre (BEC) in Mumbai via 'Medial Fair India 2012'. 

But, what actually would interest the Small & Medium Sector Enterprises (SMEs) of healthcare sector here will be the 'Buyer Seller Meet' which IndiaMART.com will be organising in partnership with Messe Duesseldorf India Pvt. Ltd. Before delving deeper on what this meet has in its store for Indian SMEs active in healthcare sector, lets get acquainted with Medical Fair India 2012.

A Curtain Raiser
Medical Fair India 2012 will provide an interactive platform for the entire medical fraternity to gather under one roof and celebrate the technological advances in the field of medicine. It is a three day celebration of diagnostics, medical technology, rehabilitation, medical equipment and components. In fact, such a meeting is much more than just a scientific interaction. In addition to facilitating the exchange of expertise and knowledge, the fair provides an invaluable opportunity for the sellers to exhibit their equipments to the buyers.

It is anticipated that over 311 exhibitors from all over Asia, Europe and USA will attend the event showcasing the technological advances equipments and health care products to more than 5000 visitors. This event will also witness footfalls of entrepreneurs from various SMEs across the sector apart from industry leaders. As a matter of fact, for the very first time in the history of medical fairs in India, there will be a US pavilion with the Illinois State Office, the Minnesota State Office and the US Commercial Service participating, as well as group exhibitions from the Czech Republic and Japan.

Upholding Traditions: Where Buyers Meet Sellers
Partnering with Messe Duesseldorf, IndiaMART.com will organize a 'Buyer Seller Meet' alongside the fair. This meet will provide an exclusive platform to buyers who will come with their specific requirements and sellers who will showcase product samples of their respective companies. IndiaMART.com will make arrangements for pre-fixed meetings between buyers and suppliers of medical products as well as it will ensure that every buyer gets to meet multiple numbers of suppliers. The objective of this meet is the cultivation and promotion of various businesses across the field of medicine, creating prospects for exchanging of views on the development in instrumentation, establishing contacts and face to face meeting with prospective buyers. This meet not only gives a golden opportunity to Indian SMEs in healthcare sector to explore a whole new world of healthcare products & services but also a perfect platform providing enormous future prospects, latest trends and exclusive networking with the companies from the same industry.

Health & Welfare
The medical fair aims to direct the health care group giving them an opportunity to gauge trends and developments in medical industry. It gives them a chance to meet decision makers from India and abroad, whose and who of medical fraternity as well as renowned doctors & veterinarian surgeons. The fair tries to accomplish welfare of the buyers and sellers belonging to health care groups and pharmaceutical industry at its best.

Welcome to Mumbai
So, IndiaMART.com welcomes all manufacturers, exporters, importers, purchase managers, doctors, et al to be a part of this mega event in Mumbai, the bustling and lively city of India which is enjoying both an excellent economical climate and blooming healthcare services sector. Come and join IndiaMART.com at 'Buyer Seller Meet' where it opens gateway for Medical & Healthcare sector to a better tomorrow.

'Buyer Seller Meet' Schedule:

Date: 2nd - 4th March, 2012
Time: 10:00am - 04:00pm
Venue:  Bombay Exhibition Centre, Mumbai

Fill up your buyer's registration form by clicking on the link below and get a Face-to-Face interaction with suppliers of medical products:
http://trade.indiamart.com/mailer/ts231111/medical-fair-india.html

For more information, please visit:
http://www.biztradeshows.com/medical-fair-india/

Innovate to Sustain and Grow

Globalization has brought many markets together and presently, the competition does not just rest within a single country. Products and services from various enterprises located across the world are competing on a single platform. In times of such competition, the success of any particular company is gauged by the speed at which it can innovate goods and bring them to the forefront.

What is innovation?
Innovation defines the ability of any agency to benefit from the breakthroughs of scientific achievements and convert it into practical solutions for marketing. A combination of efficient flow of technology, ready supply of finance and adequate business skills are the three pillars which can boost an SME. 

Teamwork makes it easy for you to innovate

Many SMEs keep on repeating their processes and often fail to innovate and thus eventually lose to competition. SMEs have a huge potential to innovate and are well aware of their market. They are familiar with their manufactured product and user expectations and can utilize the opportunity to innovate. Lack of funds is also another deterrent for many SMEs.

Engage relevant talent
To improve their status, SMEs can even hire an innovation coach who would share his expertise to prepare the innovation process. They can also hire exclusive R & D professionals for new product developments and dedicate an entire wing for the same. They can outsource the research work at a much cheaper rate.  Many low end SMEs may not be able to innovate as per their requirement. They should improve their efficiencies in HR, finance and customer management systems to support themselves.

It has been proved that firms which invest a good amount of their profits in developing innovation or R & D turn out to be at the top of their list in production. SMEs also need to understand the various SOPs offered by the government or policies which can be utilized by them to fund their R & D projects.

Spread good humour
For bringing innovation one has to understand its benefits and also venture into new collaborations to initiate innovation. An SME has to invest in promising innovators who can boost and contribute with greater ideas in the existing set-up. A work culture suitable for innovation has to be cultivated and results are expected to show with the passage of time. It has to be reflected in various segments within the agency including in its management. It is a group phenomenon and never an individual attempt, thus, the team has to be nurtured to express their views and encouraged to be creative.

Innovation also demands a certain dedication in terms of manpower, resources and finances. SME needs to prepare their employees by sending them to workshops, seminars and conferences where they can pick up handy tips. Senior staff are often found to be antagonistic towards innovative ideas and implementations and they also need to be kept in the loop regarding new processes. Ideas have to be worked upon in a collaborative manner and supportive people are required within an agency to support new initiatives. Fostering innovation is hard, but innovative SMEs are cut out for a larger canvas.

SME Exchange of BSE to see first IPO today

Bombay Stock Exchange

The Bombay Stock Exchange (BSE) will commence its small and medium enterprises (SME) platform with Rs 8.50-crore initial public offer (IPO) of non-banking finance company (NBFC), BCB Finance.

 

The IPO will open for subscription today. It will be the first issue to be traded on the segment during March. The firm will secure Rs 8.85 crore via the issue, which will end on February 27 and the issue price has been set at Rs 25 per share.

BCB Finance is mainly involved in the business of advancing loans and investing/trading in securities. If the IPO attains success, it is expected to pave the way for the listing of other firms on the platform. 

Both the bourses, BSE and NSE have been facing pressure from Centre to unveil a separate trading platform for SMEs.

For more news, click: http://news.indiamart.com/story/sme-exchange-bse-see-first-ipo-today-155761.html

Employee Retention - Invest, Reward, Respect

The success of any budding or existing SME lies in its team of dedicated and productive employees working with it. As a management initiative, it is necessary to retain potential employees and reward them from time-to-time. A study has established that 62 per cent of SMEs face hurdles in recruiting and retaining staff over a period of time.

Invest in your employees
Often, companies invest in a wide amount of infrastructure to train their employees for better production and losing them because of a lack in retention skills can prove to be a big loss. SMEs especially need to prepare their HR processes to save themselves from losing valuable employees. Also, competitors do not hesitate in poaching potential workforce from other companies and may cause damage to the companies by offering their employees better incentives. 

Retain your employees with competitive wages

Competitive Wages
There are a number of ways in which an organization can retain their trusted employees. Paying competitive wages is one of the most important methods to hold existing employees. Also, providing your employees a reasonable amount of flexibility in their jobs can prove to be beneficial. A variety of benefits such as changes in schedule, fixed shifts, leaves for personal matters and family-supporting initiatives can also be crucial. Long-term employees need to be appreciated for their long service. Encouragement to them also proves to be a good example for other employees who realize that the company appreciates their commitments. Simple incentives such as health insurance, benefit packages could support them in making a decision to be with the original employer. It also offers the SMEs an additional advantage over the competition.

Respect your employee
Another key area in employee retention is respecting the employee and offering them space and support. Individualized work desks, promoting healthy relationships, and providing supportive trainings are some of the steps which can be taken by a company. Promoting interpersonal communication is also crucial for supporting existent and new employees. Various communication initiatives such as focus groups, attitude surveys, hotlines, etc. can help them in corresponding about their needs and requirements. A good employer must know what his employee wants. 

Make it transparent with your employee

Retention bonuses are another important step in retaining an employee. SMEs often face a lot of difficult situations such as mergers, acquisitions, financial difficulties, etc. It is vital in those times that companies release retention bonuses to support their employees and retain them. Also, it is better to release the amount over a period of time rather than pay it as a lump sum.

Managing a new hire
In worst cases, one may have to lose out on trusted employees and can benefit from new hires who would be more eager in their performance, would be cheaper to afford and can grow up to be a potential addition to the workforce. The only cons to a new hire would again be the question of reliability and standard requirements for training and nurturing which may take precious time of the employer. 

It is always difficult to find skilled workers and more so, in the times of a tough competitive market and financial meltdown. It always makes sense to retain one’s most effective workers.

Challenges Faced by SMEs in Developing Countries

Small and Medium Enterprises (SMEs) are an integral part of any economy and play a vital role in supporting a stable economic environment. They are crucial in upholding the growth and existence of economy especially that of developing countries. SMEs are driven by combined efforts of private entrepreneurs, government and financial institutions.

Developing financial sensibilities
One of the key elements for an SME’s success is access to finance. In developing countries, SMEs face a number of hurdles while achieving the financial resources for building up of their businesses. Finance is crucial for any SME to acquire or absorb innovative technologies. Their expansion to global markets or association with other firms is also related to the availability of finance. Traditionally, SMEs find it difficult to avail credit or equity. Even maturities of commercial bank loans offered to them are limited to a very short period. Similarly, lower interest rates are extended to a very few companies.

SMEs are often considered to be high-risk borrowers because of insufficient assets and their vulnerability to market fluctuations. They are also very much susceptible to mortality. The existence of an information asymmetry caused due to lack of records in accounting and inadequate business plans often make them a difficult choice for creditors and investors. Also, the high cost of transaction or related administrative costs of lending small amounts make lending to SMEs a risky proposition. Even then, banks turn out to be the biggest supporters of SMEs. It has also been proven that banks would benefit commercially from lending to SMEs. 

Plan your finance and take the right ladder to growth

Find the right investors
Besides assistance from banks, SMEs can also rely on private equity firms which are experienced and expert in their businesses. They would prefer to invest in businesses which have a potential to grow. Many SMEs do not prefer such investments because of the interference by the equity firm members. However, there are certain investor firms who prove to be a viable option for funding as they use their own money for funding various initiatives.

Society has seen a new spurt of CEOs and successful entrepreneurs who are investing in new ventures and ready to support upcoming SMEs. These investors also provide their expertise to the firm and support them with their management skills. Bombay Stock Exchange (BSE) has already kick started its SME platform with the Rs 8.5 crore initial public offer (IPO) of a non-banking finance company (NBFC), BCB Finance. This has set high hopes for Indian SMEs who can now raise domestic capital for their own requirements through this way.

Alternatively, since SMEs have a bigger scope of getting their funds from banks, they can improve their credibility. Another solution offered is maintenance of better business plans, improved credit ratings and maintaining reliable financial information which would help banks and financial institutions in having more confidence in lending to SMEs.

SMEs can also go in for mergers with other firms to complete their fund requirements. Mergers also provide them opportunity to enter into international markets and form strategic alliances to expand their business and enter new productions. SME sector of any country is expected to drive the growth of any country’s economy and offer a significant opportunity for various investors to contribute in the future of a country.

Know Your Customer for Higher Growth

The customer is the key entity that drives the market. If a company is able to understand the various dimensions of its customers including social, functional or emotional factors, it would be equipped to design a better product for it. Customers expect excellent products at optimum prices and are also willing to pay as per the product or service. For example, for a hypermarket chain, the behavior of its staff, the pace of its service, maximum discounts on the prices, availability of variety of products will determine its success amongst the users. With a tough competitive market, the SME with a better understanding of its users would have a better chance to outstand others. 

The success of an SME is identified by its grasp of the market, which is in turn driven by the needs of the customers. Thus, knowing the customer becomes imperative for any SME. Every company must develop its own program to understand their customers. The company, the nature of its users and the type of products or services it has to offer are some of the important considerations while planning the program. 

How Well Do You Know Your Customer?
A customer knowledge program should make the SME aware of customer emotions and experience about their products and goods. It should also educate them about the customers’ needs and expectations and also present the market perspective for their products. For example, a company selling shoes should realize factors such as material preferences, designs, looks, climate conditions and average shoe sizes of the population, before even manufacturing any product.

Communicate with the Customer
Communication is the key word in a Know Your Customer (KYC) program and it should consist of interactive surveys, information feedback forms from the customers to know their needs from time to time, et al. Customers need to be visualized as the best brand ambassadors of any company's products/services. Their problems need to be assessed in a regular manner and for every purchase. They need to be offered more for being loyal to the brand. For example, a paints company could provide customers with a sample booklet for choosing colors and in return, request them to fill out a form regarding their preferences in colors, materials from that particular company. This way, both agencies are benefited from the mutual exchange. Presently, the world wide web provides the SME to have a better connect with users directly.

Through the KYC program, the customer also needs to be assured that his inputs are considered for developing the existing products into better ones. Many companies conduct product surveys and often reward the customer for participating in it. These programs also help SMEs enter into a new market or launch a new product in an existing one. They also save a potential company from causing itself any damage through a new service or product.

Key Objectives of KYC
Some of the key objectives of a KYC program include verifying the needs of the customers, monitoring changes in their preferences, manage risks regarding new initiatives, etc. In short, the existence of a stable KYC program contributes to the growth and success of an SME. So, when are you improving a KYC program?

Why SMEs should Opt for Inbound Marketing?

When you’re about to start a small or medium enterprise of your own, it’s important to make people aware of your venture and the products and services you offer.  Inbound marketing is the new marketing method that uses the latest technology to attract customers. This marketing method is opposed to the traditional, interrupting and less effective outbound marketing. This method uses the new strategy of reaching costumers by providing them precise and useful information reaching them according to their convenience. As traditional marketing is focused on finding costumers, inbound marketing is focused on the idea of getting found by costumers. So inbound marketing brings qualified costumers to the SMEs.

Next Gen Marketing
Inbound marketing is the result of some recent changes in the behavior of consumers. It does not involve the conventional and expensive methods of regular newspapers and television advertisements, billboards on roads and telemarketing calls. It is mainly based on three things--good content, Search Engine Optimisation (SEO) and social media.

The primary advantage of inbound marketing is its target audience which is all the persons who access the internet. A good content is the key to successful inbound marketing. Users will browse away from your page if they do not find the right information or get confused by the presentation. Similarly, SEO helps the consumer locate the site and its content. SEO practices, on-page and off-page, help SMEs in achieving a higher position in search engines. Search engines such as Google, Yahoo, Bing, etc. prove to be the first platform for a potential buyer or customer.

Social media networks form another important aspect in inbound marketing. Their range is spread across many channels where people browse on a regular basis. With a substantial sharing of the content, potential buyers are attracted to company's products or services.

Saves Time
A survey has established that inbound marketing, even though time consuming, costs 62 per cent less than outbound marketing or related efforts. It grows over a period of time and only improves in its quality. Also, with inbound marketing, one is directly connected to the target audience. In inbound marketing, one only approaches leads which are interested in the product and provides better chance for selling. It also works as a wisely investment, whereby SMEs can benefit from a long-term marketing strategy rather than a short-lived one such as print ads or video presentations, etc. The right investment on optimized content which can show up on various search engines confers a long lasting touch to the marketing effort.

Flexible Solution
Inbound marketing also offers a flexible solution to SMEs which can modify its campaign from time-to-time as per their requirement. Adopting closed loop marketing analytics from possible leads also helps SMEs to improve their marketing month after month. The system works much better than conventional e-mailing systems where the company has to spend quite an amount just to reach out rather than waiting for consumers to connect with them in the inbound marketing methodology. Often, these e-mails create negative publicity for the SME as the message is branded as a spam or unwanted forwards.

As a power pack of all these advantages, Inbound marketing could benefit SMEs in multiple ways making them more successful.

How to Generate Cost Effective Web Traffic?

Online marketing is slowly transforming the success scenario of many SMEs and providing them with new, potential arenas. It can greatly contribute in providing them with a larger status and put them in the same league of larger firms.

Website traffic can be increased by developing online partnerships whereby various concerns host each other’s web links and connect every user to the other’s web page and also advertise their own wares. The traffic can also be boosted by promoting search engine listings.

What Does the Customer Look For?

An SME needs to understand the way in which customers rely on search engines and the way they pick up keywords in a particular content. Search engines such as Google, Yahoo, Bing, etc. are potential platforms for customers, existing and new ones, to search for a particular product and service. They work as effective channels to guide users towards a particular site. One can choose between paid listings or organic listings as per their convenience. Generating back links or link building is vital for a website to have a higher position on the listings.

SEO or Search Engine Optimization is fast becoming a favored option for SMEs who are realizing the power of the World Wide Web. SEO involves the process of promoting the visibility of a particular webpage or website through unpaid search possibilities. Initially the search algorithms depended on information provided by the websites such as keywords which was later converted based on the keyword density. Presently, each search engine has their own criteria for listing a particular website. Many of them employ crawlers which browse across various pages of a website and seek out keywords and content elements. SEO can be planned according to the various kinds of search including image search, video search, academic search, news search, among others.

Where & Why to Invest

Many SMEs invest in SEOs as part of their internet marketing strategy and they are incorporated in their website design. SEOs are expected to bring optimum return on the amount invested. Search engines change their algorithms or search criteria and thus websites can suffer a loss in the visitor counts. Thus, SEO-responsive material needs to be updated from time-to-time. SEO could practically include a variety of materials including website designs, content management systems, videos, images, shopping carts, and elements which are programmed for search engine exposure.

SMEs can also boost the prominence of their web page by cross linking which consists of multiple links on various pages to bring the reader/user in connection with some important pages on the site.

Another form of ensuring free web traffic is the mode of free articles. An SME should publish a lot of articles which are themed along their products or services. They can involve their subject of expertise and offer their customers tips and guidelines which can make for an informative read.

You can also start a newsletter that can easily carry a variety of experts on the subjects together. The SME can be also part of online communities and forums where they can share their information and expertise with their potential customers.

So, be everywhere without shelling extra pennies and attract extra web traffic to your website.

NIESBUD partners with International Finance Corporation for MSMEs

The National Institute for Entrepreneurship and Small Business Development (NIESBUD), which is an autonomous institution under the Ministry of micro, small and medium enterprises (MSME) has collaborated with the International Finance Corporation, which is a member of the World Bank Group, for undertaking various projects in regard to entrepreneurship development in this country.

A memorandum of understanding (MoU) has been inked and NIESBUD will partner with the IFC in conducting training of the trainers (TOT) programme for boosting the training skills of the MSME trainers.

For more information: http://news.indiamart.com/story/niesbud-partners-international-finance-corporation-msmes-155248.html

Expert Speak: Mr. Ajay Wahi

SMEs: Do a regular dipstick on SWOT 

Achievements are to be savored. Enjoy them, but do not let them make you or your leadership complacent, because nothing stays the same. We have the recent experience of the global recession of 2008-09 to go by, in which many global giants went under completely. And these are the same global giants who taught the world what SWOT meant! But it seems they initiated the concept and grew complacent, eventually stopping the SWOT analysis and thus fading away.

Therefore, doing SWOT analysis should be very much a part of our life. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. For instance, for a particular SME, its strength may be a very good product; weaknesses might include poor customer support, which would endanger the company and/or its future growth; the Government abolishing sales tax on sales of its product might present the company with an opportunity; while a competitor might have announced the launch of a similar product, which would be a threat to the SME in the future.

However, all this is true only at a point in time. One year, or even one month after the above SWOT analysis, the scenario might be different, because change is the only constant; hence the need to do regular SWOT analyses.

SWOT analysis offers many other benefits as well!

1. As an SME, you are growing and dealing with many opportunities, and rushing all the time. Unless you take time off to assess the situation you are in, you may find you are running around, but are not reaping the full benefits of your effort. So you need to track your progress, and SWOT helps you do this.
2. SWOT analysis forces the leadership to keep abreast of developments in technology, market, economy, competition etc. As a result, the management gains more knowledge, giving them greater power, for knowledge is power!
3. It ensures that each member of the leadership team is working towards a common goal. Conducting frequent SWOT analyses helps in aligning the working of each department towards a common organizational goal.
4. Sharing the conclusions of a SWOT analysis with employees enthuses them as they see the company as one with clear-cut objectives.
5.  Lastly, a SWOT analysis is a key tool for a reality check. Remember, something that was an advantage 3 months back may be a threat now. Your advantage was that you sold a lot more than your competitor, but did not take care of your client support whereas the other competitor sold half but had satisfied clients. So if you don’t take a break from sales and improve your client support, you could effectively land up gifting your clients to the competition too!

1

India is a fast expanding economy and there are rapid changes in our industrial policies, export benefits, SEZ regulations, foreign players’ entries etc. Simultaneously, political, financial, economical, regulatory, and competitive aspects are changing so fast that we need to do SWOT regularly to know how such changes will impact our company.

This dynamism and fast pace is a wonderful opportunity for an SME because an SME being lean can react fast whereas larger companies are slower to respond. The telecom sector is a case in point. Because of regulatory and competitive changes, Bharti and Reliance who had a field day with less competition now have 13 competitors and it is the new ones who have upset the giants by announcing war-like tariffs!!  

Caution:  SWOT analysis should be conducted frequently enough for it to be useful, but not so often as to use up all employees’ energies doing SWOT alone!

Actions from the SWOT analysis must be given weightage so the SME focuses on those actions which will make the most difference to its future growth. 

Sum Up:  SWOT lets us be proactive, anticipating the future.

The company and employees are intellectually challenged, and can make plans which are practical and achievable, and form the basis for solid growth of the SME.

The contributor of this article is Mr. Ajay Wahi, author of management books like 'and the award for the BEST SME of the year goes to...' and 'Get Noticed Get Promoted'.

He can be contacted at 9810027979 or awahi2010@gmail.com

Single Retail Brand: Will it work for SMEs?

FDI has been in the limelight for quite some time now. In a recent directive, the government has revised FDI in single brand retail from 51 per cent to 100 per cent. Even though clarity regarding the term ‘single brand’ is yet to be ensured but it intends that foreign companies would be able to sell their products which were sold internationally under a ‘single brand’. Does this benefit SMEs or is it a constraint?

The concept of ‘single brand’ implies that sale of goods of multiple brands, even by the same manufacturer, would not be allowed. In such an example, if Swatch obtains permission to retail its watches under the Swatch brand, it would not be allowed to retail any other brand such as Longines or Titan. The agency would have to seek separate permission and would need to operate separate outlets for it. This would mean a lot of SMEs that are playing in the retail and manufacturing sector. 

Are We Being Too Ambitious?
The ‘single brand’ is an ambiguous term and the present policy does not clarify whether goods retailed with sub-brands under a major brand can be qualified as single-brand retailing. Single brand retail is expected to bring in a lot of investments from across the globe to India. On the other hand, it could slowly eliminate the existing domestic set-up due to a lack of implementation of the policy directives. India presently has a large number of SMEs, unorganized retailers who are an integral part of the retail. Ample care needs to be taken for their sustenance in case of 100 per cent FDI.

Big, Bigger, Biggest
Retail is a big phenomenon in India and one cannot simply participate in this process and mimic some settings from different context and expect it to work. On one level, many could perceive it as a threat of colonialism effected on a country which is familiar with its harmful effects. The biggest drawback remains in the lack of a level playing field for the domestic and small retailers which are still servicing a major part of the country. 

The onset of large retail is imminent but the policy still needs to prioritise public good which is missing from the existing framework. Every Indian has the right to a better product and a better service but they are the final users which decide the success of such brands. The present policy needs to include quality directives which need to be adhered to by the foreign investors. Similarly, there is a lacuna in the labelling of ingredients and misleading marketing tactics which could harm the Indian population. The policy should include directives which are equal to both consumers from developed countries and developing countries such as India.

Single brand retail will give the Indian consumers access to foreign brands and it would also benefit the Indian economy as the money spent would be within Indian shores. Both foreign retailer and his Indian partner can benefit out of this system with the foreign investor getting acquainted with local market knowledge and the Indian partner learning best techniques in management, design and technological knowhow. Overall, with some corrective measures, this move could propel Indian economy to a new level. This presents a greater opportunity for SMEs to watch out for new liaisons and benefit from changes the economy will be witnessing.

RBI asks banks to set up dedicated verticals to help SMEs

The Reserve Bank of India (RBI), asked the financial institutions to constitute dedicated verticals to provide financial assistance to small and medium businesses.

 

While addressing an industry seminar organised by the SME Chamber of India here, RBI Deputy Governor, Mr KC Chakrabarty, said, “An SME-promoter knows the product, but he doesn't know finance. I think this is a product innovation, which needs to  be done by banks and it needs to be done across the globe.”

He asked banks to strengthen their long-term association of lending partners with SMEs by providing consultancy on finance, cash-flow management, taxation and other related things for a fee.

Read more at: http://news.indiamart.com/story/rbi-asks-banks-set-dedicated-verticals-help-smes-154822.html

The Merger Benefit for SMEs

The Indian economy is bubbling and along with that are the big players. Pleasantly, this time round a lot of SMEs are also joining the bubbly bandwagon. A primary reason for this growth is the way smaller enterprises are taking to business decisions like mergers and acquisitions.

The Pretty Picture
A burgeoning number of Indian SMEs are entering into mergers and acquisitions with various players from India and worldwide. The numbers have nearly doubled over the last two years alone. At this juncture, one needs to thoroughly understand the advantages of mergers for a particular SME. With a merger, an SME can acquire a greater set of resources for itself which can include manpower, machinery and other innumerable assets. In turn, this can boost its efficiency which can lead to an increase in its output and also lead to a reduction in the cost of producing a particular product or services. This reduction in the expenditure and improvement in the output can convert to better business growth for the enterprise. 

How Mergers Help
Mergers can help an SME in covering/removing its weaknesses in the long run. For example, any SME that is lacking in its R&D is advised to merge with an agency with strong R&D skills which can boost the productivity of both enterprises. Similarly, in the global context, mergers assist SMEs in penetrating new markets. Any Indian SME can also partner with agencies from foreign countries to facilitate retail for both their brands within India. Besides bringing a host of new technology and products into the country, it would also introduce better management, practice and culture to the agency. Both the agencies stand to gain from merger and it provides foreign SME with the know-how about Indian market and its demands for the coming times. Also, while SMEs go into mergers, they get into some fruitful partnerships regarding proprietary rights for products which can benefit the end user. IT sector is a clear example for such mergers where SMEs combine to offer a variety of products for the user. This also opens new markets for the SMEs and also contributes to innovation and propagation of a particular merger.

Reverse Mergers
In many cases, mergers also help SMEs in rising out of debt and works as effective exit strategy for many companies. Many SMEs can also enter into reverse mergers whereby a private company can merge with a public enterprise and form a public entity with a control exerted by the private company. With a reverse merger, private companies can exert better control on an existing public company and still run an enterprise with a public existence. There are a number of examples in India itself where an SME has acquired a larger status through its timely merger with another SME. Most of these mergers are found to be from the manufacturing sector although service sector is also joining in this process. The option of  leverage buyout financing and acquisition funding process which is supported by private equity houses prove to be some of the reasons for the sudden spurt in mergers amongst SMEs. Mergers prove to be one of the best ways for an SME to grow and expand. With the advent of globalization, it has become a more opportune growth for SMEs.  

How relevant is R&D to SMEs?

The Indian market is developing at an accelerating rate and with rapid globalization, the contribution of technological potential is critical for any firm’s survival or growth. R&D is required to develop distinctive technological competencies and is vital to imbibe external technologies. Relying only on the strategy of reverse engineering and innovative cost-effective processes would simply be insufficient to support under the new technology policy regime.

While initiating an R&D project, Small and Medium Enterprises (SMEs) have to consider thoroughly whether the particular research is necessary for their business and if it would deliver the expected results. They also need to examine what is their exact purpose from the research which can dictate its methodology and also clarify the kind of partners required for the project. 

In SMEs, research helps in a number of ways including bringing innovation to existing products or developing new ones. It helps the company in accessing new customers and entering new export markets besides offering an unparalleled edge over the competition by increment in sales, turnover and growth in business. R & D also facilitates global collaboration leading to an intensification of international contacts between SMEs and other companies involved in the field. 

 Indian manufacturing firms of various sizes (small, medium or large) are often found to have a low incidence of in-house R & D and have very less budget allocation for the same. Some of the industries, such as chemicals & chemical products, electrical & optical equipment, drugs & pharmaceuticals and machinery & equipment control about 80 per cent of the entire SME R & D of the country (as per a research by Jaya Prakash Pradhan, SPIESR). Incidentally, these industries are also in the top four across the various SMEs, in India and worldwide in their share in the R &D sector.

Initiatives such as EU-INCOOP-Inter-institutional Cooperation in EU are gaining prominence by bringing together experts from key areas of computing technology from India and EU. This association is expected to boost the IT industry and benefit SMEs in gaining valuable data for entering new markets and also help in understanding details about market dynamics in a developed economy.

Many countries also offer tax relief to SMEs conducting R & D supporting the fact that creation of innovative, high-value-added products and services boosts profitability and growth of such companies and economy of that nation.

Indian SMEs are supported by schemes such as SIDBI’s Technology Development and Modernization Fund, ISO-9000 Reimbursement Scheme and Credit Linked Capital Subsidy Scheme for Technology Upgradation, among others. The government also supports SMEs through direct incentives for promoting in-house R & D activities. Any industrial unit which has received recognition from the Department of Scientific & Industrial Research (DSIR) is given tax deduction equivalent to the revenue and capital expenditure spent on R & D. 

With a variety of tax initiatives by the government and the global market knocking at our doors, SMEs are safe in opting for a bigger budget allocation for R & D activities which could substantially improve their businesses.