Enhancing the Competitive Advantage for MSMEs With Inuka SME

The world’s largest companies you see today began as micro, small and medium-sized enterprises (MSMEs). During their growth, however, they leveraged and exploited different sources of competitive advantage to sustain their business.

The ability of MSMEs to develop into a medium enterprise and eventually, a large company largely depends on how best sources of competitive advantage are utilized.

But how can this be achieved if these small businesses are perpetually stifled and disadvantaged in Kenya?

Becoming a profitable MSME in Kenya, and Africa, at large, is never a smooth sail. There’s the presence of stringent government regulations in several countries, though the flexibility of doing business in others is a force to be reckoned with.

Above all, access to credit is still the biggest challenge that needs to be urgently addressed. It is ironical how politicians keep saying that the small and medium-sized enterprises (SMEs) in Kenya are the greatest contributors to the economy when the sector hardly receives enough support.

There are many such businesses in Kenya but the majority of them aren’t as successful as one would think. For they provide lots of job opportunities, what small business owners are looking for are ways of ensuring success. But what exactly do they need to realize this growth?

Here are the top things they need for a competitive advantage:

• Funding

This is by far one of the most important aspects an MSME needs. A large firm can easily sell its bonds or issue stock to the public if it needs to raise funds for a specific innovation or venture. The same cannot be said about small businesses.

The flexibility lacks and they are much reliant on loans, which unfortunately aren’t forthcoming for many start-ups. This is still a big challenge to many small businesses across the country.

• Skills

Growth in business hardly occurs without competitive talent. Sadly, small businesses don’t have the luxury of attracting top talents in the industry as a large enterprise would. Large firms hardly experience challenges when hiring high-level employees because they can afford them.

MSMEs, in this case, might be challenged in the compensation sector but it sure does make up for it in terms of moving up the ladder quickly or benefits like flexible time among others. This is perhaps the only way these small businesses can attract skilled personnel who are looking for flexibility.

• Efficiency

The advantages of economies of scale for a large business is higher than in MSMEs, that is, the cost is lower for each product and service they offer.

As such, they have a leg up on smaller business who will invest in tools and equipment or other services before having a finished product. Furthermore, MSMEs will spend more time before delivering certain products or services.

For instance, if you wanted to build a table and you don’t have the tools, you have to buy the equipment first before starting the build; however, for your second table, because you already have the necessary equipment, you will spend less. This is why large businesses also produce in large quantities.

• Purchasing Power

Small businesses are disadvantaged a lot when it comes to keeping costs low through negotiations. Depending on the volume of what your business outputs, you may or may not be in a position to strike admirable deals. As long as the profits are huge, the supplier can bend the