FEATURE
PAPER
Associativeness: A SME's Successful Strategy to Foreign Market
The
following paper was presented at the 2005 ASBE
Conference. It was written by David G. Puyana
of Sergio Arboleda University.
Abstract
In
Colombia, the SMEs counts for the 96.4% of the total companies,
63% of the
employment and 45% of manufacturing production. However, they only count for
less
than 20% of the total Colombian exports. Now, when the country is involved in
the
globalization process, the internationalization of SMEs has become an import
topic.
Notwithstanding, the benefits derived from exporting in an increasingly globalized
marketplace has not foresee by the mayority of the SMEs and the foreign trade
path is
facing many obstacles. This paper, offers a comprehensive analysis of 156 business
owners answers about the possibility of the associativeness as the best strategy
to solve
some of the barriers hindering the small business export development.
Introduction
This research
is centered in how to open possibilities and to habilitate
the Colombian
SME´s participation in the global markets promoting these firms to achieve a
sustainable
economical and social development. This purpose could be defined as to open a "more
ethic route" to reach competitivity by contrast with the characteristic way of
the
companies in the undeveloped and developing countries works (Colombia, for example),
who to compete often restricts the wages and profit margins instead to improve
the
productivity, the salaries and the profits. A comparable example is given when
the
reduction of export prices is more fast than the increase of the export volumes,
getting
worse the status of the enterprise, of the country or both.
A complete
different process is that one that increase and improve the
participation in the
global economy, reaching an sharp grow in the incomes. The difference between
one and
the other course of action to reach the competitivity has the explanation through
of the
differents production capacities of the SMEs to achieve " competitive progress".
This is
the hypothetical subject of this early stage of the study.
Those enterprises face up the "neoliberal" economic model, enforced force in
mostly of
the countries under the "umbrella" of the International Monetary Fund and the
World Bank and since 1991, that economic model has mean a total transformation
of the
colombian enterprises, mainly the SMEs, because the liberalization of the colombian
market, the new technologies, the position global and regional multinationals,
the capital
flows and all this factors, leading -in the best of the cases- to an stand-still
of the
companies.
The Colombian SME´ s covers all productive sectors, and are localized all over
the
country and it is one of the main sources of new jobs, usually intensive in not
qualified
having a high social importance.
Their future is nothing promising in those economical sectors where the scale
economy
keeps its validity, but it is hopeful where the markets are strong segments with
plenty of
markets niches, where the specialization brings with it different options for
products with
high aggregated value, where the special features of the product is essential
and the
difference is definitive.
The international market constitute a very serious concern since the globalization
demand high competitive indexes. Between the different estrategies to promote the
development of the SME´s, one of importance is Associativeness, in order to be able to
to reach the foreign commercial scenario with competitive selling prices, volumes and
quality.
An arrival in those conditions to the global market is a challenge for the SME ´s and it
constitutes the cornerstone to grow. If they do not prepare to compete, a lot of them will
dissapear. For that reason, to find a common objective can propitiate the creation of a
consortium of SME´s that offers different alternatives for the producers if they want to
compete in the foreign markets.
Read the Entire Paper...
TIP
OF THE WEEK
Why
Foreigners Can't Ditch Their Dollars
How often
have you seen a comment like this in articles about the U.S.
dollar? "Analysts say that what really worries them is that
foreigners will start moving out of the dollar."
Next time
you see something like that, dismiss it. The fact is that
foreigners as a whole - cannot ditch their dollars. Indeed,
because our trade deficit is constantly putting new dollars
into the hands of foreigners, they have to just as constantly
increase their U.S. investments.
It's true,
of course, that the rest of the world can choose which U.S.
assets to hold. They can decide, for example, to sell U.S.
bonds or to buy U.S. stocks. Or they can make a move into
real estate, as the Japanese did in the 1980s. Moreover,
any of those moves, particularly if they are carried out
by anxious sellers or buyers, can influence the price of
the dollar.
But imagine
that the Japanese both want to get out of their U.S. real
estate and entirely away from dollar assets. They can't accomplish
that by selling their real estate to Americans, because they
will get paid in dollars. And if they sell their real estate
to non-Americans-say, the French, for euros-the property
will remain in the hands of foreigners. With either kind
of sale, the dollar assets held by the rest of the world
will not (except for any concurrent shift in the price of
the dollar) have changed.
The bottom
line is that other nations imply can't disinvest in the U.S.
unless they, as a universe, buy more goods and services from
us than we buy from them. That state of affairs would be
called an American trade surplus, and we don't have one.
You
can dream up some radical plots for changing the situation.
For example, the rest of the world could send the U.S. massive
foreign aid that would serve to offset our trade deficit.
But under any realistic view of things, our huge trade deficit
guarantees that the rest of the world must not only hold
the American assets it owns but consistently add to them.
And that's why, of course, our national net worth is gradually
shifting away from our shores.
| Warrn
Buffet reprinted from Fortune in International
Business 14th Edition. Fred H. Maidment. McGraw-Hill
Dubuque, IA. 2007. p78. |
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