CHAPTER 2:LITERATURE REVIEW- SMMES IN DEVELOPING
4.3 Research Objectives
To answer the research questions, the following objectives were formulated:
To ascertain the extent to which SMMEs are dependent on assistance from financial institutions.
To establish if all SMMEs have adequate training and development.
To determine the extent to which SMMEs develop and practice strategic plans.
To ascertain the advertising strategies SMMEs commonly use in order to be successful.
To determine the extent to which competition impacts on the success of SMMEs.
To ascertain the extent to which SMMEs are dependent on assistance from financial institutions.
This research objective provides a clear understanding of the role of adequate finance in small business success. A study by Nurmet et al. (2012) found that there is a difference in extensive success strategies practised by SMMEs with government funding relative to micro enterprises, survivalists and a portion of small enterprises who are in most cases overlooked regarding financial assistance. Nurmet et al. (2012) base their argument on the premise that enterprises with no financial assistance and inadequate start-up capital fail to exercise vital strategies and are therefore most vulnerable to environmental factors, thereby hindering their growth and development abilities. This
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factor was therefore reviewed in this study, in order to determine the significance of government finance in small business success.
To establish if all SMMEs have adequate training and development.
Given the inadequate finance available for SMME owner-managers to practice success strategies, this objective assists in determining the perceived vitality of training and development needs. It further aims to provide a clear understanding of whether the essential training and development activities are affordable and available to SMME owner-managers and their employees. Research by Morgado et al. (2014) shows that the contribution in support of SMME survival and development through training programs to further enhance business competences of the owner-managers and employees is vital to the success of SMMEs.
To determine the extent to which SMMEs develop and practice strategic plans.
With regard to the increasing rate of failure of SMMEs in Maseru, and the decrease in training and development workshop attendance, this objective aims to obtain a clear understanding of the abilities of SMME owner-managers to be robust, to think and act strategically for the long-term survival of their enterprises, given the internal and external challenges surrounding businesses as they strongly impact and slow the growth of these enterprises. Alstete (2014) presents a continuum of deceptive contradictions to contrast operational strategic planning with flexibility of these small businesses with the changing, dynamic environment.
To ascertain the advertising strategies SMMEs commonly use in order to be successful.
In order for this research to provide meaningful results, this criterion was measured for all participants. The study used information from a large number of small to medium- sized enterprises regarding this objective, as advertising strategies are linked to growth potential and therefore are usually financially supported. Thus there is a need for SMMEs to engage in advertising strategies to create awareness of their existence, products and services offerings to new and existing customers. The results from a limited number of basic survivalists and micro enterprises were obtained even though they barely regard advertising strategies as a basis for their survival, given their inadequate financial state. This objective aims to identify the essential advertising
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strategies vital to SMMEs to adopt, implement and operationalize. The extensive utilization of these strategies provides a solid framework for SMMEs’ capacity to generate competitive advantage, and a vibrant perspective for the future developments of SMMEs. Small and medium enterprises depend on considerable finance, special expertise acquired from training, and unlimited impact in the marketplace acquired from the practise of significant advertising strategies. All these factors therefore support the need for resource allocation and deployment of essential advertising activities (Valeriu et al., 2011).
To determine the extent to which competition impacts on the success of SMMEs.
This research objective provides clarity with regard to the competitiveness of SMMEs, which is a complex and contested concept in the universal literature. The business environment is surrounded by national and international competitors and this creates a necessity for individual enterprises to identify the behaviours of these competitors and to assess their potential. The present development of business environment has produced substantial failure of SMMEs, hence there is a need to evaluate the extent to which competition impacts on their success, and the competitive strategies that allow them to sustain their gained market positions and to have a concrete foundation in the competitive battle (Manole et al., 2014).
This study was vital for the SMME sector, especially the micro-enterprise owner- managers who have been excluded in previous studies due to the size of their enterprises and limited potential for growth and development. Ntlaloe (2011) states that a majority of SMMEs in Maseru are micro-enterprises with limited potential for growth and development, however, previous studies done to investigate SMMEs in the capital city did not include the proportion of micro-enterprises because the main objective of those studies was to obtain adequate data on the enterprises with high potential for growth and development. This study aimed to create an awareness amongst SMME owner- managers of the vitality of their enterprises to the country’s economy, to gain a clear understanding of the activities that happen within and around their enterprises, the kind of strategies they should engage in, as well as an awareness of the financial and training institutions available to help further their enterprises’ growth and development.
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