Manufacturing SME Strategy to Grow and Develop in an Emerging Economy: Evidence From Nigeria

Growth Models of Manufacturing SMEs in Emerging Economies

The growth of SMEs has contributed extensively to the development of emerging economies as measured by GDP and the creation of employment (Dube and Chipumho, 2016; Mamman et al, 2019). SMEs growth is often assumed on the basis of their owners obtaining some financial support (Bouri et al., 2011), without much consideration given to their internal capabilities (Hitt et al., 2015). In emerging economies, manufacturing SMEs growth has been attributed to their internal capabilities such as low cost of production, quality products, product delivery speed, product design and innovation (Theresa et al, 2016). Also, manufacturing SMEs growth has been credited to their process efficiency and their ability to bring their product to the market within a short period of time (Kang et al., 2016; Ghobakhloo, 2018). The majority of SMEs in emerging economies, growth simply means their capability to survive and remain in business, data however points to most SMEs going into administration soon after their start-up phase (Okpara, 2011). Product pricing strategy also plays a major role, based on the SME ability to lower manufacturing costs and offer products at a competitively low price in the marketplace (Hitt et al., 2015). Manufacturing SMEs have also achieved growth strategy through their ability to design and develop new products within a short period of time (Theresa et al, 2016).

In the world of contemporary business practices, innovation has become a requirement for manufacturing SMEs growth operating in an emerging economy to survive global competition. The manufacturing SMEs growth model of innovation involves the use of technology, good managerial practice to address customer needs and accomplish operational improvement (O’Regan and Ghobadian, 2006; Adam and Alarifi, 2021). The role of managers in SMEs in growth strategy is well acknowledged in saving the cost of production, hiring skillful employees and reducing material waste (Mamman et al, 2019).