Small and medium enterprises Essay Example | Topics and Well Written Essays - 2500 words

secondary and medium enterprises - Essay ExampleAn SME should give the primary importance to alliance and strategic partnerships at both local and global levels in order to join on the productivity. This exit give a huge shape up to the yield to cost ration which is the most decisive factor in any SME as they be required to fulfill some business rules and rules to survive in the emerging stinting world of like a shot (Nelson & Prescott, 2003). The paramount reason behind these success criteria is the fact that in the ever increase global economic scale, the SME finds itself being in some tightened conditions thus experiencing jeopardy and limiting factors in the economic growth. Alliances with some partners go out not only give them important horizons and resources to get a global exposure but it will also expand the business opportunities to increase the profit and lifetime of the business initiative. A very noted concept in business studies known as transaction-cost theory should be followed in order to increase the certainty level of the success of the partnership (Yasuda, 2005). This theory illustrates and suggests that the SME should make alliance with a partner that loafer minimize the sum of the fixed and continual costs throughout the business process. The famous example in this case can be taken that of Austria economy which enjoys almost 99 percent of the SME initiative which were at the start partnership based. (OECD, 2005). Similarly, the other success criteria are limited target marketing because e increasing the target market at the start.