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There is general acceptance of the belief that the potential for increased exports
by SSls in developing countries ; is significant, but only a small proportion of SSls
is currently exporting and a vast majority of SSI produces exclusively for the
domestic market. Nevertheless, their contribution to exports is substantial, as
high as 50% of total export (36% approx, in India) in some developing countries.
It appears probable that as the [proportion of exporting SSls rises,
national export would rise dramatically.
Now withstanding the magnitude in terms of value and numbers, the contribution
of SSls in export is still inadequate, when seen as a proportion of total SSI
output. One reason for this could be the attractive size of the home market and,
at the micro level, a lack of sufficient initiative in an SSI to get in to exporting.
Though the SSI sector has it's own inborn strength to expand and export but it
has to ultimately compete in the market with the large or medium scale industrial
giants to survive and grow so, there are few major speed breakers on the path of
growth in front of SSI as compared with large industries, these can be viewed as
below : -
♦ Output levels : Inability to expand output significantly and to fill large orders
may discourage buyers from buying SSI products.
♦ Flexibility : The major advantage of SSls is that they tend to be more flexible
and are better in adapting to change than their larger counterparts. A factor
that seems to be common to all successful exporters is that they can adapt
themselves to an opportunity abroad and organize themselves efficiently to
exploit it
♦ Risk taking : Greater enterprise and risk taking may be possessed by an SSI
owing to high aspirations of its principals to succeed and excel in business.
The purpose of comparing the strengths and weaknesses of SSls and large
units is to shortlist the areas where SSls require support in their attempt to enter
the export field.
For entering in to the global market it is essential for an existing SSI to assess
its export potential. Export potential is the ability to take advantage of sales
opportunities abroad. There are both internal and external factors that affect the
export potential of an enterprise.
♦ External Factors : Although much of the export initiative lies with the
individual SSI, the importance of environmental circumstances in which it
operates can not be denied. These circumstances tend either to facilitate or
hinder export initiation and success of SSI.
♦ Exchange Rates : The relationship between your currency and that of your
export customer 'floats', i.e., changes continually. As your currency weakens,
it gives you a competitive edge in export markets. As it strengthens, you may
lose competitiveness.
Opportunities
Comparative Export
Exchange in specific
Advantage of Promotion
Rate Export
your country Policy of your
market
EXTERNA Export
L TO Potential of
INTERNAL
SSIs
TO