Abstract
Competitiveness has become an obsession for companies and nations, since it is a way of showing the degree of development and the productive capacity that a country has. Throughout this chapter, this concept is related to small and medium-sized companies, which are a large part of a nation's business fabric but do not have very high competitive rates. With the analysis of this variable in this category of companies, it is intended to generate strategies that allow increasing competitiveness in companies of limited size and capacity, in order to achieve their strengthening and greater presence in national and international markets. The main focus of this chapter will be on Colombian companies that are in this type of company, through the review of bibliography and indicators of national and international competitiveness.
TopIntroduction
The micro, small and medium enterprises (MSMEs) are characterized by being production units born from the family and as an effort to improve income and quality of life of those who make up this company. Unfortunately, the financial structure of these companies does not allow them to make large investments that lead them to improve their production processes and therefore remain at a disadvantage compared to other companies that do have the financial and operational capabilities required by a competitive environment. One of the biggest shortcomings that these companies have is their lack of financial resources or ability to make investments in fixed assets. This means that companies will have problems in improving their competitive capabilities and facing the constant changes of the environment; this has a negative impact on their ability to survive in a demanding environment compared to quality.
This obsession to be better in a changing environment is due in large part to the development and the presence that has the so-called competitive advantage in both clients and entrepreneurs, this has forced businessmen to be in constant search for strategies that allow them improve in its productive or cost structure. But competitiveness also revolves around the differentiation of product or company, since even with a high sale price you can compete in the market, if you have something that makes a difference against the competition.
However, many of these companies have implemented strategies aimed at improving their production and cost structure, to increase the competitiveness of their processes and face the market in which they are located. The main intention of this chapter is to show which companies have implemented practices that allow them to increase their competitiveness, and also what of these practices have been; in order to generate strategies that can be implemented by MSMEs without distinction of sector or capacity.
The above is condensed in the following research question that will guide this chapter. What are the strategies that generate greater competitiveness in Colombian MSMEs? This question, as mentioned in the previous paragraph, will seek to establish the lessons based on developed experiences that allow the creation of solutions to the problem of MSMEs. The general objective that underpins the development of the chapter is to establish strategies that improve competitiveness in Colombian MSMEs based on the analysis of business practices. This general objective is accompanied by the following specific objectives: (a) Contextualize the environment in which micro, small and medium enterprises operate, compete, and survive, (b) Analyze the competitive environment in Colombia, focusing in the macro, meso and micro levels, (c) Generate different strategies from previous analyzes that allow increasing the competitiveness of Colombian micro, small and medium enterprises.
The chapter will be organized as it follows; in the background section will be presented an overview about competitiveness, an overview about small and medium companies and the section will close with the relationship between these two topics. The next section will be focused in the development of strategies to increase and promote competitiveness in Colombian companies, after the presentation of a panorama of the competitiveness in small and medium companies. The chapter will end offering recommendations and conclusions.
Key Terms in this Chapter
Small and Medium Enterprises: Within this category of companies, is possible to say that small companies are those with a maximum of 50 employees and micro companies that can have 10 or even 5 employees (OECD, 2005).
Competitiveness: Is defined as the degree to which under open market conditions, a country can produce goods and services that meet the test of foreign competition while simultaneously maintaining and expanding domestic real income (Reinert, 1995).
Global Competitiveness Report: It has been developed and published annually since 1979 by the World Economic Forum. The competitiveness index measures the ability of countries to provide high levels of prosperity to their citizens. This ability, in turn, depends on how productively a country uses its available resources. The index measures a set of institutions, policies and factors that define the levels of sustainable economic prosperity today and in the medium term (Foro Económico Mundial).
Productivity: Effectiveness of productive effort, especially in industry, as measured in terms of the rate of output (goods, products, services) per unit of input (labor, materials, equipment) (De Been, Van der Voordt, & Haynes, 2017).