October 23, 2012 // By: Susan Galer
Top 4 Priorities for Growth
How are leaders at small and mid-size enterprises (SMEs) in developed and emerging countries making sure their companies flourish in a challenging business world? To find out their biggest obstacles as well as opportunities for growth, the Economist Intelligence Unit (EIU) surveyed over 1000 senior business managers in developed and emerging countries. The findings reveal a surprising amount of optimism tempered by the realities of an uncertain economy. This is the first in a two-part series that summarizes feedback from SMEs in developed countries.
Senior managers at SMEs in France, Germany, Japan, the UK and the US may be battling for survival amidst an economic slowdown but they remain more determined than ever to expand. Not surprisingly, 59% of survey respondents agree that the business environment has become much tougher in the past three years. What’s more, 58% expect things to get much worse in the next three years. However, these same managers think their businesses will outperform the economy or the competition. Sixty-eight percent expect their businesses to grow turnover in the coming 12 months. And 59% expect their workforce to increase in the next year.
The top four business priorities of SMEs in the next year are growing sales and earnings, becoming more efficient, using technology more efficiently, and developing new products and services. Managers are less interested in cost cutting or short-term survival tactics. Instead they’re focused on growth and expansion across both emerging and developed markets. One opportunity respondents cite often is expansion of the business into new markets, or expansion of the markets themselves. Sixty percent of SMEs agree that they need to compete in more international markets.
Many managers are turning to the internet to meet growth objectives. Cornelius Patt, CEO of Zooplus, an online pet supplies retailer based in Germany, points to digital multi-channel contact, including content accessible by tablet computers and mobile phones, as a major opportunity for customer engagement. Zooplus also uses social commerce to get closer to customers. “The recommendation [to shop at Zooplus] does not come from standalone search activity by one consumer. It’s more that one consumer refers another,” says Patt.
Wahoo’s Fish Taco, a US-based casual-dining chain, has also shifted more resources into social media to replace traditional advertising venues. “Everything here has been about investing in our marketing and branding, and supporting our increasing sales,” says Mingo Lee, one of the three brothers who founded the business in 1988.
Next page: Bureaucracy slows down growth