Analyzing the Strengths and Weaknesses of Small Business Enterprises

There are advantages to running a small business enterprise and there are disadvantages to it, as against managing a larger business enterprise such as multinational companies. This post shall highlight and compare the strengths/weaknesses of managing a small or medium business viz-a-viz a larger corporation.

Comparing the strengths of smaller businesses to those of larger corporations

Strengths and Weaknesses of Small Business Enterprises

  • Personal touch: Customers value personal attention than they value cheap and affordable products. Customers prefer to patronize a business where they have direct access to its owners and managers than a larger corporation where they can only meet with sales reps.
  • Greater motivation: The daily operations and core management of a small business venture revolve around the owner than with employees of larger companies. The owners of small organizations work harder and longer and are more concerned with profits and losses than employees of larger organizations who work less and are more concerned with salaries and bonuses.
  • Greater flexibility: Small businesses can take instant action when they identify a problem than a bigger multinational can do in the same instance. A medium company can increase price without market consequences but a bigger corporation cannot do that without fear of resistance from organized labour or undue government interventions.
  • Less bureaucracy: The chain in commands in larger corporations prolongs the decision-making aspects of running an organization, but there is no such bureaucracy with medium-scaled businesses. So managers get things done faster in small businesses than they can ever do in larger corporations.
  • Less conspicuousness: It is always possible for smaller companies to introduce new products into the market without undue noise or attention, but this is not the case with larger corporations. Multinational companies are constantly faced with proxy battles, anti-trust actions and government regulations.

Comparing the weaknesses of smaller businesses to those of larger corporations

  • Financial limitations: Apart from the fact that larger multinationals have huge financial reserves, it is also very easy for them to access huge bank loans to fund business activities, but this is never the case with smaller ventures. Smaller businesses are hampered by shortage of funds.
  • Staffing and employee problems: Large corporations have the resources to pay fat salaries and huge bonuses to staffs and employees, but smaller companies are more concerned with keeping their businesses afloat and meeting set objectives than with paying bonuses or salaries.
  • Lack of credibility: Big companies have no problems introducing new products to the market because they already enjoy massive goodwill to sell any products. But smaller businesses need to convince the public every time of the value and quality of new products before they could be purchased.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.