“Competitiveness, Challenges and Prospects of SMEs in Bangladesh for Internationalization”
Course no: BA-412
Course name:Business Research Methodology
Eijaz Ahmed Khan
Business Administration Discipline.
Mahmudul Hasan Siddiqui
ID # 040308
ID # 040316
ID # 040320
ID # 040328
ID # 040342
4th Year, 2nd Term
Business Administration Discipline
Khulna University, Khulna.
Date of Submission: 13 July, 2008
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2. Literature Review:
In this research, an attempt will be made to examine the current situation of the SMEs in Bangladesh. Still the pace of SME in the international competition is minimal. From the late 1980s and mid-1990s, when the giant industries became increasingly dominant, small and medium size enterprises remained unchanged and even increased slightly in absolute terms. There seems to be an inconsistency between the increased heavy industries and the unsatisfactory growth of SMEs.
The economy of Bangladesh is at the crossroads. Rapid liberalization has put most existing industries specially SMEs under severe strain because of their inability to compete with consumer goods being freely imported after the withdrawal of quantitative restrictions and the drastic reduction of import tariffs. There are no estimates yet about likely losses to the domestic trade and economy of the country from the flood of imported consumer and industrial products - cosmetics and toiletries, food and beverages, textiles and apparels, footwear and leather goods, chemicals and pharmaceuticals, light engineering products, machine tools, hand tools and so on. All these products (all under the SME category, and the rate at which the glittering multistoried shopping malls are springing up in Dhaka and other major cities of the country is perhaps a good indicator of the rate of displacement of domestic products by imported merchandise. Although some producers have been successful in improving their products and significantly increasing external market access, most are languishing.
For internationalization the adverse effects that present SMEs are facing cannot be stopped rather it needs to compete with the foreign products in domestic as well as international market. To be competitive, some ways need to find out strategically for SMEs to be competitive for internationalization.
SME participation in global value chains has to be placed in the broader context of SME internationalization. The reorganization of production at the international level and the development of global value chains are having significant effects on SMEs, in particular by expanding their business opportunities. This is important when considering that reaching international markets is a problematic step for SMEs.
Declining costs of information and communication technology, globalization and changing conditions for innovation and entrepreneurship are bringing new opportunities as well as challenges for countries and business alike around the world. In this rapidly evolving playing field, the role of large and small firms is changing. Large firms are downsizing, outsourcing and off-shoring while raising productivity around a narrowing core business. Small and medium sized enterprises (SMEs), on the other hand, account for a growing share of the work force in most countries. In parallel, SMEs are becoming more important for economic growth, exports, local development and innovation.