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How Should Strategy Management and Consultancy in SMEs Be?

SMEs are recognized as the backbone of the Turkish economy. According to the latest data, SMEs account for 99.8% of all enterprises in Turkey, providing 73% of employment and 52.8% of total value added. Therefore, the successful management and development of SMEs is of great importance. This paper will provide information on how strategic management and consulting for SMEs should be conducted.

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How Should Strategy Management in SMEs Work?

Strategy management in SMEs is the process of identifying and implementing the steps to be taken to achieve the company’s long-term goals. Strategy management can be summarized as analyzing the current situation of the company, identifying future opportunities and threats, and planning and implementing the necessary actions in line with the objectives.

In the strategy management process of SMEs, the following steps should be followed:

  1. Analyze the internal and external environment and identify the company’s strengths, weaknesses, opportunities, and threats.
  2. Clarify the vision and mission and set long-term goals.
  3. Strategic planning to determine the steps to be taken to achieve the set goals.
  4. Implement the planned actions and continuously measure and evaluate performance.

Institutionalization and Strategic Management in SMEs

Small and medium-sized enterprises (SMEs) must be sensitive to strategic management in order to survive in today’s competitive business environment. At this point, the process of institutionalization is very important for SMEs. Institutionalization puts the management structure of an enterprise in a certain order. It makes organizational arrangements to increase the sustainability and growth potential of the business.

Strategic management lies at the heart of institutionalization. Strategic management involves the development of management strategies to determine the goals and objectives of the business, to use resources correctly, to survive in a competitive environment and to seize future opportunities. SMEs can achieve long-term success by establishing a solid foundation in strategic management through the process of institutionalization.

Institutionalization is a critical process for SMEs to grow and achieve sustainable success. It can be defined as the adoption of a professional management approach, standardization of business processes, documentation, and a sustainable structure.

The average company life span in Turkey is 12 years, below the global average of 65 years. Unfortunately, 80% of companies established in Turkey do not reach their fifth year, and 96% do not reach their tenth year. The rate of companies lasting more than twenty years is only 2%.

Nevertheless, SMEs are very important for the World economy.

In the process of institutionalization in SMEs, it is necessary to focus on issues such as determining the vision and mission of the company, improving business processes, and strengthening the organizational structure. In this process, it is important for SMEs to receive external professional support through strategy consultancy services.

Especially during the COVID-19 pandemic, many countries have supported SMEs through programs such as direct financial assistance, public guarantees on loans, and tax reductions. However, while such financial support is useful, it does not prepare firms to tackle the many challenges of development, globalization, and digitalization in the long term. Indeed, a Canadian study has shown that the most effective way to support SMEs is to pair financial support with advisory services.

Strategy consultancy support is aimed to contribute to the solution of the following problems in SMEs.

  • Limited access to financial markets
  • Limited innovation capacity and technology utilization
  • Low reporting and auditing standards
  • Inability to manage processes from an architectural perspective
  • Internal control inadequacies, difficulties in inventory management
  • Failure to calculate costs correctly
  • Branding
  • Risk management
  • The need to increase the commitment and qualifications of employees to the company
  • Lack of capital
  • Accounting and tax risks
  • Inability to manage cash flow
  • Inability to draw correct conclusions from financial statement analysis
  • Inadequacy of decision support system
  • Failure to manage growth

Why SMEs Should Seek Strategy Consulting Services?

SMEs may find it difficult to determine the right strategies to achieve their growth targets. For this reason, it is of great importance for them to improve their business processes and implement successful strategy management with external professional support. Receiving strategy consultancy services can help SMEs

  • Gain an advantage over their competitors,
  • Achieve their goals faster and more efficiently,
  • Entry into new markets,
  • Achieve sustainable growth,
  • It helps them optimize their business processes and organizational structures.

SMEs that receive strategic planning consultancy begin to objectively evaluate the current state of the business. With the experience and knowledge of expert consultants, they reach more accurate and effective strategies.

In addition, an external perspective reveals opportunities and threats that the company is not aware of. Thus, the decision-making processes of the business accelerate and become more effective.

What to Consider When Hiring a Consulting Service?

The care taken when choosing all business partners should also be exhibited when choosing a strategy consultant.

First of all, the consultancy firm’s sector experience and achievements should be checked. For this, it will be guiding to examine the company’s references and obtain information about the projects it has realized. After understanding the scope and process of the services offered by the consulting firm to serve the needs, the cost and duration of the consultancy service can be evaluated. The consulting firm’s communication skills and ability to cooperate should also be taken into consideration when making a decision.

After finding the right business partner, it will be possible to take action quickly to maximize the benefits of professional support and achieve sustainable growth.

Innovation and Technology Integration in SMEs

Another important area that SMEs should not ignore in strategy management and consulting processes is innovation and technology integration. SMEs should continuously pursue innovative solutions and technological developments in order to stand out in their sectors and increase their competitiveness.

The support SMEs will receive from strategy consultants on innovation and technology integration will help them make their business processes and services more efficient, increase customer satisfaction and reach new markets.

According to a 2020 Mckinsey report, business executives are increasingly reaching their customers through digital channels. This shift is particularly evident in the Asia-Pacific region, where the share of digital consumer interactions has exceeded the global average.

In our country, which is prone to technological developments, there is a high potential for the utilization of digital channels. SMEs that quickly implement technological developments in their processes will have the advantage of being one step ahead of their competitors.

Sustainability of Strategy Management and Consultancy in SMEs

For SMEs to be successful in strategy management and consulting processes, they need to make these processes continuous and sustainable. To this end, SMEs are recommended to follow the steps below:

– Regular review and updating of strategic plans.

– Continuously improve business processes and encourage innovation.

– Training and raising awareness of management and employees on strategy management.

– Evaluating and implementing feedback and recommendations from consulting services.

Cooperation and Business Partnerships in SMEs

Another important factor in SMEs’ strategy management and consulting processes is collaboration and partnerships. SMEs should collaborate with other companies in their sectors, universities and public institutions to increase their growth and success. Such collaborations enable SMEs to;

– Develop innovative ideas and solutions,

– To realize R&D projects,

– Reach new markets,

– Improve business processes and services,

– It will help them use their resources more effectively.

Strategic Marketing and Customer Relationship Management in SMEs

In order for SMEs to be successful in strategy management and consultancy processes, they should also give importance to marketing and customer relationship management. It is important for SMEs to take into account customer expectations, market trends and competitor analysis when determining and implementing their marketing strategies.

Customer relationship management helps SMEs achieve sustainable success by increasing customer satisfaction and loyalty. In this context, SMEs should;

– Make continuous improvements by taking into account customer feedback and complaints,

– Identify customer expectations in advance and develop their services and products accordingly,

– Analyzing customer data and organizing marketing campaigns suitable for their target audience,

– They need to conduct customer relationship management processes in a professional manner.

In order to achieve success in strategy management and consultancy processes, SMEs should take the right steps to achieve sustainable growth and competitiveness. In this context, it is of great importance for SMEs to determine the right strategies and increase their success by receiving professional support in these processes.

Human Resources Management and Leadership in SMEs

According to the 2018 World Economic Forum Competitiveness Index, Turkey’s weakest component is its labor market competence, ranking 127th out of 137 countries. Financial burdens, including severance and notice pay, lead to loss of competitiveness due to economies of scale, especially for SMEs. It causes medium-sized and family businesses, as identified by the OECD, to move back and forth between the formal and informal economy.

In order for SMEs to achieve success in strategy management and consultancy processes, they need to give importance to human resources management. Human resources are the most valuable asset of companies. Therefore, it is of great importance for SMEs to manage and motivate their employees properly.

In this context, SMEs are recommended to pay attention to the following points:

  • Give importance to training and development of employees.
  • Conduct performance evaluations regularly and objectively.
  • Support employees’ career planning and offer career opportunities.
  • Selecting the right candidates in recruitment processes and cooperating with employees who fit the company culture.
  • Providing a good working environment and increasing employee satisfaction.

SMEs need to pay attention to many factors to achieve success in strategy management and consultancy processes. The most important ones are institutionalization, strategy formulation, strategy consultancy, innovation, technology integration, collaborations, marketing, customer relationship management, human resources management and leadership. By getting professional support in these processes and implementing the right strategies, SMEs can achieve sustainable growth and competitiveness.

TeoLupus offers special services for micro, small and medium-sized SMEs within the scope of professional SME consultancy in line with its expertise. Contact us for a free preliminary review and diagnostic study to see our customized solutions for your business at international standards.

Bu gönderi şu adreste de mevcuttur: Türkçe