SME'S SHOULD ALSO USE BRAND STRATEGY
SME'S SHOULD ALSO USE BRAND STRATEGY
Wednesday, 09 September 2009 15:39
Small and medium-sized enterprises (SME) are socially and economically important, since they represent a large percentage of enterprises in Kenya, provide hundreds of thousands of jobs and also contribute to entrepreneurship and innovation. In a growing economy like Kenya SME’s have the potential to sustain and accelerate the current economic growth. This was the case in East and South East Asia where SME’s were instrumental to the phenomenal economic growth.
In the third world SME’s face constraints in growth mainly due to limited availability of credit. Another reason is that they mainly operate in the commodities categories, producing homogenous products and services restricted to small local markets. I addition to this a large number of SME’s are family or individually owned with expertise lying with one or two individuals.
Growth for any company in an industry consisting of many players is attained through competitive advantage. SME’s tend to have short term competitive advantages usually revolving around price and location. These are soon copied or matched due to the low entry barriers in the SME sector. Therefore a small company thrives in the short term but suddenly finds itself struggling to grow.
Huge multinationals also go through the same dilemma at some point and they too seek ways to remain competitive. Eventually for these companies brand strategy ends up providing the most sustainable competitive advantage. Therefore SME’s should not view themselves differently, they too can benefit from brand strategy and attain growth through sustainable competitive advantage. This approach shall create a business that will endure and grow through generations.
Brand strategy will also enable an SME to break out of its geographical barriers, spreading from its original location to various locations around the country or other countries within the region.
An SME previously competing in a price sensitive sector can find itself able to charge a premium and consumers willing to accept this higher price.
Debt collection would also improve because people would be willing to pay you faster so as to be able to continue trading with a reputable brand.
In spite of size an SME that has taken the brand strategy route will find itself able to attract and retain good workers because they are proud and happy to be working with a strong brand. Of course due to being able to charge premium prices the SME would also be able to pay wages above the going rate.
Similar to large multinationals the gains from brand strategy for SME’s will not be seen overnight, but in the long term will deliver differentiation, continued growth and stability.
The writer is the Chief Executive Officer of Interbrand Sampson East Africa, a strategic brand consultancy firm.
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