The statistics are clear, small and medium sized enterprises or SME’s make a huge percentage of the economy and account for large amounts of employment and more importunately employment growth in most developed countries, Malaysia is no different.
The government knows it needs to develop this group should it have a chance to reach developed nation status (now add high income to the requirement) by the year 2020. With a population of only 30 Million there are limitations to the domestic market, export of goods and services will be an important part of any sustainable Malaysian SME.
Moving forward, there needs to be a clear strategy to meet the challenges faced by SME’s as they face international competition both in the domestic and global markets. The SME Corp is the government agency which is under the Ministry of International Trade and Industry (MITI) tasked with the leading the development of SME’s. Even with the considerable resources of the government there is a limit to what they can effectively achieve, that is why a broader effort will be required.
The first challenge that SME’s in most sectors will face is the considerable barriers of entry, further compounded by late market entry, considerable disadvantage in size to the Chinese and low brand recognition compared to European, Australian and American companies.
There is a need to understand the strategic environment so that an effective strategy can be developed and a framework of collaboration established which will allow Malaysian companies to compete globally together.
What we are proposing and have helped many companies with is the development of an “Allied Export Partner Strategy” which has three main pillars:
- Identifying and partnering with internationalized Malaysian companies
- Supply to MNC’s that are present in the Malaysian market and tie up with their “Global Purchasing Program”
- Formation of a consortium with companies in the same sector
As a next step and knowing full well that most SME’s don’t “have the time” to develop such strategies as the day to day running of the organisation tends to take up 90% of management’s time external assistance is needed. That is why leveraging off the expertise and experience of the team at Malaysia Global Business can be an important first step in the right direction.
About the author
Nordin Abdullah is an Australian entrepreneur with over two decades in Asia, the Organising Chairman of the Malaysia Global Business Forum and the Managing Director of Glenreagh Sdn. Bhd. a boutique consultancy firm based in Kuala Lumpur, to arrange a time to discuss how the team at Glenreagh can assist your contact [email protected] or [email protected]