Characteristics of SMEs in the supply chain

1. Marketing – Most SMEs are not able to do thorough marketing due to limited resources hence their products are not well known in the market which reduces their profitability level.
2. Small structure – Generally, they have a simpler structure than large companies.
3. Internal Business Integration – Most are unable to integrate large business relationships and even engage in international trade due to lack of international standard satisfaction and quality control which is expensive for them to acquire.
4. Increased Competition – Most face a lot of competition and hence have to continuously innovate so as to remain relevant and maintain their client which is expensive.
5. Limited Finances – Most have limited budgets as compared to larger companies. They are not able to easily access loans from commercial banks whose interests are relatively high and demand collaterals that SMEs may not have, hence this limits their expansion and forces them to minimize their fixed variable costs.
6. Employees – Most usually have few employees since they cannot afford to pay a huge workforce. Some are not able to employ a skilled workforce due to the costs involved.
7. Non-availability of Suitable Technology – It is difficult to adopt and keep up with new technology though it being a very critical part of the business.
8. Technology – This eases the business operations, improves monitoring and evaluation hence increased profit and effectiveness. Latest technologies in SMEs may include adopting various software systems to make work easier and also integrating business
processes. Most SMEs may not be able to adopt suitable technology due to expenses related to it.
9. Limited Suppliers – SMEs often do not have massive networks of suppliers which benefit them by having the ability to build trust and mutual goals with key suppliers. This makes their operations effective.

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