Role of the Internet in SME growth strategies: case studies of Swedish companies

University essay from LuleĂ¥/Business Administration and Social Sciences

Author: Zaghim Ghafoor; Mustafa Iqbal; [2007]

Keywords: SMEs; e-Business;

Abstract: Small and Medium Enterprises (SMEs) have been recognized as important
contributors in the economy of many countries and new opportunities are
opening for them in domestic and international markets. It is vital
for an SME to grow in order to remain competitive in these markets.
According to researchers, there is no single theory which can sufficiently
explain growth of an SME but the importance and use of the Internet is
becoming increasingly visible among small and medium enterprises. However,
in spite of the Internet’s potential, most of the firms do not view it as
key to their strategies for growth. The aim of this thesis is to
investigate how SMEs are using the Internet in strategies they adopt for
growth. A qualitative study comprising two case studies on Swedish firms
was conducted with aspiration to describe the role of the Internet in their
strategies for growth. The findings indicate that small and medium
enterprises adopt product development and market development strategies for
growth. These firms use the Internet in specific growth strategies mainly
to enhance internal and external communication, shortening the development
cycle of new products, expansion of geographical markets regionally and
globally, export at low costs, and providing support to customers. Firms
use the Internet to overcome the disadvantage of being small in size to
reach customers especially in international markets. However firms do not
use much of the Internet for advertising and in establishing new
distribution channels. Studied firms adopt middle levels of the Internet
integration and recognize the importance of higher levels to gain maximum
benefits from growth strategies. The findings support past research in that
whereas firms perceive use of the Internet as important they do not use the
Internet to its full advantage for growth. Overall, case studies show that
SMEs have clear approach towards adoption of strategies for growth and
consider the Internet as vital contributor for performance.