Enterprenurship sumanta sharma

8/3/2019 Enterprenurship sumanta sharma

1/6

ENT;UPRENEURSHIPBUSINESS PLAN FORMAT & RULES. .INTRODutTIoNrrITLE PAGE:

./' Name of the Company, Address, Directors, Contact Person & Phone numbers.

./' Logo (if any), Month and Year in which the plan is issuedMISSION STATEMENTIEXECUTIVE SUMMARY.BUSINESS CONCEPT:

./' National & economic trends../' Industry analysis (trends & growth)../ Legal & Administrative hurdles (if any)./ Market, Customers & expected market share (sales assumption)../ Business location (factory, office)../' Products & Services../' Staff & equipment requirement (in brief),./' Product Protection, Insurance../ Long term goals

MARI


2/6

~[SMALL ENTERPRISES]

Room for0::~.' ."f. ~ a; I VIew.

(Sc1\

Howe-commerceanhelpSMEsdevelopa sustainablexportstrategy

BibhutiBMahapatro

80

A lvin Toffler'sbook "FUtureShock andthe Third Wave"refers to three revo-lutions: agricultural, industrial andinformation teclmology. We are nowwitnessingthe networking revolution.Small and medium enterprises (S.MEs)playa vitalrole in building the economy of a country. The sec-tor has helped in reduction ofunemployment in In-dia. It is often said that small is beautiful particu-larly in the context ofsmall scale industries. S.MEsin India constitute more than 80 per cent of the to-talnumber ofindustrial enterprisesandform the back-bone ofindustrial development. But they suffer fromproblems of sub-optimal scale of operations andtechnologicalobsolescence.Indian S.MEsare also fac-ing tough competition from global companies dueto liberalisation, change in manufacturing strategiesand turbulent and uncertain market environment.But despite all these, they still playa vital role in thegrowth of the economy. Small industries have a 40per cent share in industrial output, producing over8,000 value added products. They contribute nearly35 per cent of direct exports and 45 per cent of theoverall exports from the country. They are one ofthebiggest employment providing sectors after agricul-ture employing asmany as as 28.28 million people.Strategic importanceTillsomeyears back,IndianS.MEsweregrowingslowlytaking the limited opportunities and governmentregulalions. Today,there is an increasing recognition

across the world about the importance of S.MEsinnational economic development. Although manyS.MEshave been passing through difficult timesparticularly in the context of the new World TradeOrganisation (WTO) regime, they have been able tostay in business because of their confidence andflexibility to adopt to changing needs by quicklybringing aboutimprovements in production processes,designs and marketing strategies.

Today,Fortune 500 constitutes only 10per centofthe US economy. It is the small companies whoare contributing to the global economy in nosmall measure. Seven per cent of US exports arechannelled by companies with 19 or fewer em-ployees. The United States is by far the biggestexporter of goods and services in the world. Infact statistics on SMEs indicate that they are setto continue to dominate the global economy evenin the 21st century. Big companies are restylingthemselves as networks of entrepreneurs andhave begun outsourcing from smaller compa-nies. And this is where SMEs will gain and ulti-mately enjoy the fruits of economic reforms.In an era of globalisation and economic re-forms, S.MEscannot be silent spectators, but willhave to take advantage by quick restructuring,streamlining and diversifying their activities inaccordance with the need of the hour. SMEs pro-vide significant employment when compared tolarge enterprises and also playa key role in thedevelopment of a community as they optimiseenvironmental skills and vocational training.

INDIAN MANAGEMENT. MAY 2006


3/6

",I I1

E-commerce and SMEsSMEs across the world have a strong export fo-cus. Many of them in countries like China, Japan,Taiwan and South Koreafocus on the global mar-ket. The expansion of Information and Commu-nication Technology (ICT) should help many ofthem leapfrog the global barriers easing the tra-ditional constrains that they face in the area ofmarket access, information, human resourcesdevelopment, venture capital and credit usage.The use of ICT will also bring about the changesin the managements of SMEs.

ICT,particularly those related to e-commerce,offer potential benefits for SMEs that include thestrengthening of customer relationships, reach-ing a new market, optimisation of processes andprocedures, cost reduction, improving businessknowledge, attraction of investments and cre-ation of new products and services.Therefore, e-commerce enablesSMEs to be more responsiveto and interact with cus-tomer needs. In addi-tion, e-commerce al-lows SMEs to bebetter focused in

INDIAN MANAGEMENT. MAY 2006

---- :[SMALL ENTERPRISE

their customer communications, to realise costreductions in inventories, as well as in advertisingand product promotions.E-commerce also allows SMEs compile mar-ket intelligence regarding general consumers, sup-pliers and competi-tors more effectively.As they develop theirsales and services ca-pabilities over Inter-net, SMEswill be ableto use the mediumnot just to promoteexisting products andservices but also toidentify and provide greater customisation.

Froin the perspective ofthe international trade,

Bigcompaniesarerestylingthemselvesasnetworksofentrepreneursndhavebegunoutsourcingromsmallercompanies

Illustration:ANIRBANBORA

81


4/6

[SMALL ENTERPRISES]

E~COMMERCE:AN OVERVIEWBenefits Challenges

.In developing countries. SMEscould usee-commerceo leapfrogindustrialisation.E-Commercecould facilitatetransferoftechnologiesand growth of tCTindustryin developingcountries.CTcouldprovidescopefor localculture(andtheir intellectualproperty)to flourish

.E-commerceightprecludehosewithout accessfrombenefiting,magnifyingfurther "digital divide" amongcountriesandSMEs.Westemculturalpredominanceouldswap localcultures---=::~7.Accessomorenformationegarding. Criticalmassof Internetuseresultnmarketsandbusinesspportunities informationoverloadandconsequent.ncreasedublicityandadvertising paralysispossibilities .Costofeffectiveadvert isingnthe.Consumerand producersn developing Internetmaybeout ofreachfor SMEs.ihcountriesmaygetaccesso cheapermportsdevelopingountries '.Overcominghedrawbacksf .Marginalisationf localproducersngeographicalistance developingountries..CreatespportunitiesprSMEsn .New ' suppliersdevelopingountriesocreatee-marketplace.SMEscan create marketing and set uptheir own suppliessiteor "Virtual mall'.SMEsansetup"VirtualShop"atmuchcheaperost.E-Commerceffersnewbusinessopportunitiesfor serviceexporterstodeliverservicesonline.nternetcouldredUimiddlemanndinterl. InternetenablesSMEsndevelopingcountriesopart oreactivelyne-procurement anufacturersandbuyers '.Majorpotentialareass828,thereareopportunitiesfor business,especiallySMEsin developingcountries,to link- domesticupplies ".nternetcangeneratenlexpandinginto "digital c(

Source:

Internet potentially enlarges geographical andsector markets by cutting through many of the dis-tribution and marketing barriers that usually pre-vent SMEs from entering foreign markets. Byeliminating traditional barriers such as distance,time zone differences, communication costs andaccess to international markets that usually pre-vents SMEs from competing with large firms,SMEs can diversify into newer markets.

By conducting business online, SMEs in thedeveloping countries can upgrade their brands and

82

..

also enhance their brand image. However, someof these benefits could be counter-balanced by aseries of potentially negative if appropriate cor-porate and regulatory policies are not developed.

With increase usage of the Internet for trad-ing, in April 2000, the Global Organisation andManagement Council ofThe Conference Board metin Washington to discuss organisation design im-plications of e-business development. Each oftheglobal corporations present was experimentingwith various business-to-business (B2B)and busi-ness-to-customer (B2C)configurations. Itwas clearthat there is still considerable confusion betweene-commerce (dealing with Internet, digital com-munication and ITapplications that facilitate buy-ing or selling processes) and e-business (optimis-ing an organisation's performance through theadoption of digital technology and the use of In-ternet or Intranet as the primary communicationmedia). Estimates on Internet penetration rates byfirms' size in several OECDcountries suggest thatInternet uptake islower in SMEsthan in large firms,though smaller firms are catching up quite rapidly.For SMEs to take full advantage of potential ben~efits of ICT, a number of prerequisites have to bemet. Among these are access to reliable and cost-,effective telecommunication infrastructure, abil-ity to introduce national business models. Progressin these areas will require joint efforts of publicand private sectors, at the national, regional andmultilateral levels.

There are a host of policy issues that devel-oping countries face in this sector which are quitedistinct from those faced by developed countries.One of the challenges is to equip SMEs to bene-fit from and use Internet as a tool for export pro-motion and development. The other is to ensureand manage the growth and development ofIn-ternet as a public utility that would also promotedevelopment. The former requires investmentsin infrastructure like telecommunication.

The latter involves the growth and regulationofInternet facilitities at a universal scale. A strat-egy and policy perspective for developing coun-tries, can be envisaged at the three different lev-els (business community, national and interna-tional), which has tobe coordinated among them.Role of governmentThe government should make efforts to enhancethe investment climate to attract and retain ven-ture capital and investment in SMEs with a po-tential for rapid growth in e-commerce. SMEs thatcould benefit from this type ofinvestment includeboth new start-up e-business firms and othermore traditional enterprises that are now im-

INDIAN MANAGEMENT. MAY2006


5/6

[SMALL ENTERPRISES]

SMALLSECTORSI'IAP'HOtINIJ\lDIA-.",:- -' ~ ~~~ - ,~ -,---

2000-012001-022002-032003-042004-05

13.1013:75 88.0091.46

16.38 102.15

plementing their e-commerce strategies. Gov-ernment must ensure a fair taxation on businessconducted via e-commerce in relation to tax treat-ments. It is also a task of the government to ad-dress security issues to build trust and confi-dence in the electronic marketplace. Policy mea-sures might range from the insurance of au-thenticity of electronic dor:;uments; privacy andconfidentiality ofpersonal and corporate records;participation in establishing internationally ac-ceptable rules and guidelines for the recognitionof electronic signatures; digital signatures and cer-tification authorities as well as restrictions im-posed on the export of technology especiallywith respect to encryption standards; and legalresource mechanism in disputes.

An area where government action is needed isthe empowerment of local SMEs through "tradeefficiency" measures. National action is requiredto ensure that local SMEs actually use the tools ofe-commerce to which they might have access to.Such tools cover a broad range ofinstruments fromtrade facilitation, customer automation and trans-port optimisation. One important area is electronictreatment of customs documentation. This reducescost and time involved in paperwork (as in Sin-gapore) as stated; it is an integral part ofbusinessinitiatives, it is important for the government tocontribute to rising he-awareness" (through semi-nars, workshops, training and other related activ-ities) of B-commerce and fostering coordinationbetween business in efforts to integrate productivechains through the use of e-commerce.Regional and international fora should comeforward to develop common standards to facilitatee-commerce among countries in the region.Domesticregulations and standard should base on market-oriented principles that are internationally har-monised and reflect market realities. In these ef-forts aimed at capacity building in developingcountries, the developed countries should under-take technical cooperation that is intended toachieve wider use of e-commerce and exchangesof its benefits with developing countries. .INDIAN MANAGEMENT. MAY2006

18118219~132

--69.707;!j71.244"239.09249:092

"".... 282.82 NAABoUT THE AUTHOR

BibhutiBMahapatroisReaderat PG,Departmentof BusinessManagement,FakirMohan Universi ty,Balasore,Drissa,References:t, Mr.S,'( Satpathy,Growthpotentia land StrengthandWeaknessofSMEs:tsMarketGlobalization& EcOtlOmiceforms,O's.LC Cunack.200S.2.Strategicmportanceof SMEsandRuralNonfarmSector,S.GuptaDirectorHC&EPL,ndKolkata,.3, Dr,PravasK,Misra,CentreforAdvancedStudyin Psychology,NetworkingStrategiesordevelopmentof SMEs,2005.4, J.K.Rath,Director,MECHEMPVTlID., StrategicImportanceofSMEs,InternationalWorkshopon SMEs,Bhubaneswar,2005.5,A.PRoy,ManagingDirector,StarElectrodesPrivateLtd,GlobalizationandSMEs:InternationalWorkshoponSMEs,Bhubaneswar,2005,6, SunilKayal,MD, Mohit Industries" NetworkingStrategiesortheDevelopmentof SMEs,nternationalWorkshoponSMEs,Bhubaneswar,2ooS7.BrianDive,TheHealthyOrganization:A revolutionaryapproachtopeople&ManagementTheFuture.Com,pg:252, KoganPageLondonStreling,VA,2005,8,Abe,Makoto ndMotohikoKawakami1997)"ADistributiveComparisonof Enterprisesizein KoreaandTaiwan",DevelopingEconomicsxxxv4.Instituteof DevelopingEconomicsJapan,December.9. ADB(AsianDevelopmentBank)(2000),"ITand Development:ProspectusndPolicies"InAsianDevelopmentbankoutlook Update2000.ADB,Manila.thehilippines10, ALADIAssociationfLatinoAmericanaintegrat ion)(2000) "EIcommercialntraregionalenel intercambioregional:Secretaia generalDecember.11.AokiM,andR.doreEd,(1994): "TheJapaneseFirms,SourcesofCompetitiveStrength",OxfordUniversityPress.12.APEC2000a),"TowardsKnowledgebasedEconomiesinAPEC,report byAPECeconomicSummit.November,13.BisangRCBonvecchi,B.KorsakovandA, Ramos(1996) :Latransformacionndustrial en los noventa,Unprocesoconfinal albeirto,DesarrolloEconomico,Vol.36,Numerospecial" .14.Berry,AlbertandJoseEscandon1994) "Colombia'sSmallandMedium-sizedExportersandTheirSupportsystem",policyResearchworkingPaperNo.1401, Wo~dBank.15, Berry,Albertand Brianlevy,(1994)"SMEsCompetitiveness:ThepowerofNetworkingndSubcontracting, Inter-Americanank,WashingtonDCIFM-l0S,16, Australia,Governmentof (2000)DrivingForceson the newSilkRoad:Theuseof ElectronicCommercebyAustralianbusiness.17.ASEAN2000)E-ASIANaskorce, www.e-aseanft.orglabout.html.18. APEC1994) TheAEPCsurveyofSmalland Medium Industries,AEPCCommitteeonTradeand Investment.19, Arnum,Eric(1999) "FinalReport:InternetTopologyandConnectivityin theAmericas" ,Presentedo TechnicalConferenceor theimplementationof IABIN,Brasilia,15-18April.20. APEC (2000b): guide for SMEs in the APEC Regions,2oo0 edition: Ihnp;/www.apecsec.org.sg --.J

83


6/6

Enterprenurship sumanta sharma

Documents