Small and Medium Firms Need Effective Strategies to Compete

Changing times continue to become the foundation needed to influence innovation and business strategy for small and medium enterprises (SMEs).  In today’s environment, innovation is a complex process that typically involves many levels within an organization to bring a new idea to the forefront. Without innovation companies have shorter life cycles and yet innovation drives the strategy of an organization.  Companies that wrap innovation into the strategy development of the organization are more likely to seek different ways to maximize the competitiveness of the firm. However, SMEs have a greater possibility of not being the first responder in the market and therefore are not able to maximize market share and positioning.

So what is the relationship, if any, between innovation, competition and the SME? Is there a lack of internal and external resources that inhibits the ability of  SMEs to compete in turbulent environments when turbulent environments are the norm? What recommendations can we, as strategists, make for our SME clients? There is a relationship between innovation and competitiveness of a SME. Innovation requires a collaborative process that involves all levels of firm leadership. Within this environment the lines of organizational become less important, since collaboration petitions the culmination of many ideas that lead to an agreed upon approach.

SMEs need to recognize the value of intellectual capital in the innovation process. Intellectual capital is usually knowledge that is stored and is owned by the organization, albeit, tacit or explicit. This is the opportunity for a firm to harvest the individuals knowledge and making it a firm asset. Intellectual capital contributes greatly toward a firms’ competitiveness, particularly when leveraging collaboration. Recommendations to increase competitiveness in today’s competitive environment, begins with leveraging a company’s intellectual capital and fostering an environment of collaboration. Out of this union ideas flow and many ways are generated to move a company along the continuum of competiveness.

Firms should also protect such ideas with patents and copyrights. By leveraging the patents and copyrights of ideas generated by the innovative thought leaders of the company, it helps to better ensure increased competitiveness. Without innovation companies are unable to compete in the fast moving impetus environment that is constantly changing before our eyes.   Leveraging the intellectual capabilities and competencies of experts within the company can lead to thought provoking ideas in the market. Lastly, before releasing the new product or ideas, be sure to have your patents and copyrights in place. There are many ways to increase competitiveness, however one of the best ways is to leverage intellectual capital.

Cheers! Follow me on Twitter @reneetsanders

Renee Sanders is a PhD candidate in business at Capella University, where her specialization is strategy and innovation. Renee holds an BBA and MBA from the University of Maryland University College. Renee currently works in for a defense contractor as the Director of Strategic Pricing and Price to Win.

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