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Opportunity for Small fish in and ocean of Sharks

The Author is an Alumnus of the National Defence Academy, with a corporate career across Tata Tea, Madhu Jayanti International, Apeejay andTwinings. He is today General Manager Operations in one of the largest FMCG Company in India. Writing, Delivering Lectures and conducting trainingprograms is a vocation he indulges in on a voluntary basis. He offers his services to support entrepreneurial spirit in society.

It is conventional wisdom that the bigger the better.This thought is deeply etched in the human psyche

and today seems to have percolated into the business

world. Whenever we think of business the mind space

is dominated by

Tata, Reliance,

Bajaj, Infosys,

Wipro, Godrej

etc. While these

big players are

important pillars

in the Indianeconomy, the

foundation is

provided by the

unsung heroes

the Small and

Medium

Enterprises.

SMEs have an

important role

and are a growth

engine of Indianeconomy.

MSMEs produce

40% of the total

industrial output

and provide 70%

of the

employment

opportunities.

SMEs are the

driving force

behind a largenumber of

innovations and

contribute to the

National growth

through employment generation, investments and

exports. Indian SMEs are making tremendous progress

in Industry, Service, Retail, IT, Agro and Food

Processing, Pharmaceuticals, Precision Engineering

and Manufacturing Sectors.

The business world is a vast ocean and the biggest

companies are the Shraks- they are big and powerful

and can guzzle any Fish that can quench their hunger,

in this case profit. Like in the oceans, the small fish ofthe Business word the MSMEs can and do adopt

various strategies to diminish the advantage enjoyed

by the sharks. The strategies adopted by the small

fishes and the

advantages of

these can

directly be

corresponded

to the MSMEs

in the business

world.Examples of

Speed, Agility,

Flexibility,

dexterity and

collaboration

abound

amongst the

large shoals in

the ocean. This

is an attempt

to articulatehow these

translate into

the business

world.

The most

conspicuous

strategy used

by the small

fishes is

collaboration.They gather in

large shoals to

maximize their

chances of

survival. The phrase 'two heads are better than one' is

well known and in this case 'hundreds of heads are

better than one'. Shoaling multiplies the number of

eyes and the directions in which they are looking.

Collectively the shoal can spot a predator or prey

much more efficiently. The probability of a predator

being seen before it attacks is increased. Co-ordinatedmovements of shoals can deter and even in some

Knowing you strengths is the first step to using them to your

advantage. This is a ready reckoner to use and maximize your

advantage:

1. Quick ResponseIdentify your target market and customers and Startlistening and talking to them. Formalize a process for feedback and

suggestions. Whenever you come across something that adds more value

to your products/services and can be implemented easily to, make ithappen ASAP!

2. Be flexible to market needs, changes and trendsAnticipate the needs ofyour target market, and establish yourself as a leader or innovator.

Sometimes watching what big business can do seems intimidating, but they

are usually focused on large volume products/services. Your business can

focus on smaller markets for big success. Big business are usually slow in

following trends. When you spot a trend, try it.

3. Give personal attention Develop one-on-one relationships with yourcustomers that big business cant build. Big businesses create an illusion by

offering special incentives to make their customers feel more important.

What they offer to Mr X is normally available to Mr Y as well. As a small

business person you know your customers by name, what their favoriteproducts / services are and what their needs are.

4. SpecializeYour small business can target unique products/services forniche markets that big business cant afford to pinpoint. Small runs, Manual

jobs etc are areas that big businesses avoid leaving the entire field to you.

5. CreativityAs a small business owner, you need to think outside the boxto attract customers. Use your employs constructively. Listen to them and

encourage them to be creative.

6. Manage your costsYou need to stay on top of your finances to come outahead! Small businesses should require fewer funds to invest, market and

innovate, thus making you more cost efficient.

7. Avoid red tapeGet Ideas, complaints, and suggestions straight to thosewho can implement or correct them. Avoid elaborate procedures wherethey going through endless channels like in a large business.

KAIZEN, QUALITY CIRCLES, TPM ARE YOUR KEYS TO SUCCESS

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cases prevent predator fish from attacking. Another

advantage to fish when they shoal is that it is thought

that as a group they may be able to reduce drag and

therefore be able to swim more efficiently.

Congregating in a shoal of MSME like an Association

or confederation, the MSMEs can also leverage the

same advantages. They can spot predators and prey,

i.e. Threats and opportunities more efficiently and usethem to their collective advantage. These could be

changes in the business environment like the entry of

a big corporation, legislative changes, new product

and processes or new technology. Once a Threat is

identified, the tactical use of the collective might of

MSMEs is the key factor determining survival or

doom. The three most important roles that an MSME

association needs to perform are: ability to service

their members; capability to positively influence the

external environment affecting MSMEs and capability

to plan and execute MSME development initiatives.This makes the issue of associations capacity building

an important area to focus upon The corporate

history is replete with examples where the collective

might of MSMEs have borne legislative changes

critical to their survival, however there is tremendous

scope for improvement on this front.

Small businesses face a number of challenges in

competing with large companies that have the ability

to mass produce goods and distribute them on a large

scale. Mass production is often more efficient thansmall-scale operations, allowing bigger companies to

set lower prices and still offer higher pay and better

benefits to employees. On the other hand, small

businesses typically have an advantage over larger

competitors in areas such as complexity, specialization

and consumer confidence.

Small companies can specialize in small, specific

market segments known as market niches to provide

value to a select group of target customers. For

example, an entrepreneur designing pet productscould focus on making products for small dogs or

specific dog breeds. Another example could be that of

a Printer who can specialize on a specific

requirements of a particular industry even if the

volumes for the same are not large. Since such

packaging does not have a big market, the bigger

organization will not be able to cater to the small runs

thus leaving the field open for the smaller fish. The

margins on such products are generally higher than

the mass products. Focusing on a niche market results

in higher quality products that do a better job offulfilling consumer needs. Niche markets provide a

smaller business with enough revenue to continue

operating, while large companies typically need a

broad customer base to make enough sales to cover

costs.

Small businesses cannot spend a lot of money on

reputed consultants to provide big ticket solutions to

business problems. This, on the face of it appears to

be a big weakness; you scratch the surface and the

reality is somewhat different. Change is the only

constant in the ever changing world. Businesses needto adapt to the change quickly. The faster they adopt

the change the more beneficial it is to them. There is

though a risk involved in any change. Big businesses

cant afford to take the risk of doing anything that

isnt tried. They depend on these highly experienced

consultants or agencies. That comes with a big cost

because big agencies have big overhead. I do not

intend to undermine the professional competence of

any of the big consultants; I just want to highlight that

because the MSMEs do not have deep pockets they

have to depend on alternates which invariably lead toinnovation and much better value for money. The

pressure of not having the expert to guide you puts

pressure forcing them to use their full potential. In a

small business, sharing good ideas is easier as

managers and owners are more visible and accessible.

Employees are more likely to have avenues to share

their ideas and be a part of any troubleshooting that

occurs. More often than not, an attentive quality

conscious workforce prevents trouble much before

the need for troubleshooting.

A small business has much better control over their

output and interaction with clients than a bigger

organisation. SMEs have the distinct advantage of

being able to change plans or strategy much faster

than larger competitors. A product can be brought to

market more quickly when you have only a few

people involved in its creation. A larger company must

involve many people and processes in product

development, slowing the process and giving you an

advantage. A small business will typically be in a

position to check products and correct any issuesmore quickly than a large business. This is good for

crisis management and minimising risk, as well as for

adapting your product according to feedback.

Simplicity is one of the primary advantages smaller

businesses have over larger companies. Large

businesses tend to have complex bureaucratic

structures that make it difficult for managers and

employees to communicate. For example, a big

corporation might have several levels of management

between the employees and the chief executive. In asmaller business, the owner can directly oversee

operations and communicate with employees. Larger

companies are also typically subject to more

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government scrutiny and regulations than smaller

ones are.

Being close to the customer is important for success in

business, and a small business is frequently much

closer to the customer than a large one. A small

business can meet with the customer more frequently

and develop more of a personal relationship than a

large company. Studies across the globe have provedthat people trust small businesses. Customers feel as

if they're less likely to be forgotten and are more

important to the "Mom and Pop" shop around the

corner than to the big Supermarket at the AC Mall.

This trust keeps clients coming back, bringing repeat

sales. Trust also extends inside the company, as

employees work face-to-face with coworkers every

day. Seeing familiar faces, shaking hands and giving

greetings builds this important trust factor. A large

company has many layers and departments and often

has procedures that prevent close contact with thecustomer. Big businesses frequently spend a fortune

trying to replicate the intimate personal connections

that smaller businesses tend to have with their

customers. From our own experience we know that

customers like to feel understood, valued and special,

this is a lot easier to achieve as a smaller scale

business. Customer complaints can be handled faster

and on a more personal level in a small company,

making long-term customer relations easier and more

profitable. Social media is another great facilitator for

engaging with clients; the need for expensiveadvertising is considerably reduced thanks to the

digital revolution. When customers have that

connection they start to like your brand and trust your

service, choosing to use you more often and

recommending you to others around them. This is

when SMEs can really begin to experience rapid

growth in demand for their products and services.

By its nature a small business is very lean. There are

fewer employees in a small organisation and alsofewer layers of management. With fewer employees,

a smaller company has less need to lay off people in

hard times and can keep the business operating more

efficiently. Having fewer layers of management makes

decision times much quicker, allowing for flexibility

and adaptability that a larger company does not have.

A lean structure means that every employee can be

much closer to the business and the customer,

allowing for both an understanding of how your

company works and increased customer satisfaction.

If many people hold the same job title as you,

delegation can become confusing. In a small company,

each person is more likely to fully understand his job

duties, making each worker accountable for his

performance. Job accountability leads to closer

teamwork, meeting deadlines and providing qualitywork each day. Small companies need everyone to

fulfill their duties; there's not much wiggle room for

catching someone else's slack.

The young generation or Generation Y (Gen Y) prefers

to work for businesses with fewer than 100

employees, according to research from online salary

database PayScale.com.

Forty-seven percent of Generation Y (Gen Y) workers

are employed by small companies, compared to only

23 percent who work for companies with over 1,500employees, says PayScales lead economist.

The average salaries at small companies are much

lower -- so why are small business more attractive to

the Internet generation?

As per an acclaimed expert on Gen Y, Younger

workers are drawn to start-ups because they offer

more opportunities to meet challenges, make big

decisions and work on their own terms. Research

shows that Gen Y prefers meaningful work over big

salaries. Gen Y workers are ambitious, forward

thinking, and understand the latest tech tools. By2025, Gen Y will constitute 75 percent of the global

workforce. They are the largest generation at 80

million with natural affinity to SMEs that businesses

can't afford to ignore.

When you take the time to evaluate the expectation

of your customer and focus your business on

satisfying your consumers, you can leverage your

small business advantages and nurture a loyal

following. Your growth will be depend upon how well

you can successfully utilize these advantages. Roomfor growth is an opportunity that you will lose once

you avail it. As a small business you have plenty of

room to grow and generate greater profit margins.

Enjoy It!!!!

-Ankur Chaturvedi

9830952306