Strategic management of SMEs Essay Example | Topics and Well Written Essays - 1250 words

Strategic management of SMEs - Essay Example The choice of a competitive strategy helps a firm navigate the competitive environment that defines one’s business. This paper concerns with unraveling the sources of comparative advantage among firms. Comparative advantage regards having the ability to satisfy a market in the best way than any other firm. In addition, the paper shall unravel how strategic management influences SME’s. Segmentation differentiation is a useful competitive strategy for an SME. Segmentation differentiation differs with differentiation in terms of product making. This is because segmentation differentiation concerns with dealing a specific market segment (Julien 2003, pp. 230). In this case, a business studies a market segment and determines different factors that define its existence. For instance, the business studies the general preferences and needs of a given market. In addition, a SME studies the aggregate income levels of a market segment towards determining the price and quality level demanded by a particular market segment. This strategy differs from the idea of approaching a market in its whole form because a firm makes the risk of targeting a single market. There are, however, several benefits of choosing a given market segment. To begin with, an SME has the high chances of exhausting the market. Once consumers are satisfied from particular services, they are highly likely to manifest customer loyalty even in cases whereby new competitors enter the market. Innovation occurs in tests of produced uniqueness that a firm has in a poll of competitors. It is crucial to highlight that innovation is a traversing concept that may occur in every level of the supply chain. To begin with, it is essential to examine uniqueness in production. Innovation in production regards using the available resources to produce that does not exist in a market. It also concerns with designing a production process that carets efficiency in terms of time and costs.