Role of strategic planning on sm es performance
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This document outlines a literature review and proposed research on the role of strategic planning on small and medium enterprise (SME) performance. The review examines studies of SMEs in the Middle East, Africa, and Southeast Asia. The proposed research aims to evaluate how entrepreneurial orientation moderates the relationship between strategic planning and SME performance. A mixed methods longitudinal study of 250 SMEs in Egypt is outlined to collect data through interviews and questionnaires to analyze the impact of strategic planning over one year while controlling for demographic factors. The goal is to provide recommendations to support SMEs based on the findings.
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Role of strategic planning on sm es performance
- 1. The role of Strategic Planning on SMEs Performance Emad Darweesh, ESLSCA Business School LITERATURE REVIEW WITH REGIONAL PERSPECTIVE
- 2. Outline Introduction Research Objectives SMEs in Economy Strategic Planning Process Entrepreneurial Orientation Case Studies Conclusion Road-Map 2
- 3. Introduction Small-to-Medium Enterprises (SMEs) Features An opportunity to solve a business need Clear goals with absence of vision Financial struggles (Cash Flow Management) Limited resources Shallow business knowledge Only 10% of the startups survive after the 10th year SMEs have to compete with large organizations in the market 3
- 4. Introduction 4 Class Existing Companies New established companies Annual revenues (EGP Mn.) Paid up Capital (EGP Mn.) Micro Less than 1 Less than 0.05 Very Small 1 : 10 0.05 : 5 to industrial companies 0.05 : 3 to the restSmall 10 : 20 Medium 20 : 100 5 : 10 to industrial companies 3 : 5 to the rest Central Bank of Egypt Definition for the SMEs
- 5. 5 Dubai Definition for the SMEs
- 6. Introduction SMEs Role in the International Economy 80% of the GDP and contribute to 75% of exports in Egypt 99% of all firms in USA and employ 50% of the work force in USA 85% of new jobs and 66% of the total private sector employment in the EU 90% of the business in UAE and Produces 70% of the GDP (oil-based economy) 33% of the GDP in Saudi Arabia 19% of the country exports in Malaysia with 35% of the employment 6
- 7. Research Objective Evaluate extension of applying strategic planning in SMEs Study impact of Entrepreneurial Orientation on performance Set methodology for comprehensive research on Egyptian SMEs 7
- 8. Strategic Management Process 8 Strategy Formulation Strategy Implementation Strategy Evaluation
- 9. Strategic Planning Tools SWOT Space Matrix Porters’ 5 Forces Balanced Scorecards 9
- 10. Strategic Planning Process 10 Continuous Process Experienced Teams High Quality Resources Market Leaders Return on Investments
- 11. Entrepreneurial Orientation “Entrepreneurial orientation is usually defined as a multidimensional construct, applied at the organizational level, which characterizes firm's entrepreneurial behavior and includes one or several of these three dimensions: risk-taking, innovativeness and pro-activeness.” 11
- 14. Research Methods 14 Research design is based on the review of 6 researches. Reviewing the same topic. Selected based on the target market. Middle East (Saudi Arabia and UAE) Africa (Kenya and Tanzania) South East Asia (Malaysia and Sri Lanka) Markets with common economic or social environment
- 16. Middle East Cases Saudi ArabiaUAEComparison SMEs in Medical SectorBusiness SectorApplication QuantitativeQuantitativeAnalysis Focal GroupRandomSampling 5400Sample Primary (Interview) Primary (Survey)Data 100%45%Response Rate 16
- 17. Africa Cases TanzaniaKenyaComparison SMEs in IlalaSMEs SectorApplication QualitativeQualitativeAnalysis RandomNonSampling 50NonSample Primary + Secondary (Interview & Questionnaire) Secondary (Similar Researches)Data 17
- 18. South-East Asia Cases Sri LankaMalaysiaComparison SMEs in Sri LankaSMEs in Northern StateApplication Mixed MethodsQuantitativeAnalysis Random Focal Group RandomSampling 150 + 8 cases250Sample Primary (survey + interviews) Primary (mail questionnaire)Data n/a36%Response Rate 18
- 19. Conclusion Strategic Planning is a hectic process for SMEs Less than 25% of SMEs practice formal strategic planning A wider utilization of informal planning is followed Strategic Planning has positive impact on SMEs performance It may not be the only factor, but it is one of the main pillars Entrepreneurial orientation boosts the growth potential of SMEs 19
- 20. Research Design Mixed Methods Analysis Longitudinal Analysis over one year Random Sampling Sample Size of 250 SMEs Demographics Analysis (Education, Gender, Hometown, Exposure) Data Collected through semi-structured Interviews Email questionnaire can be distributed over middle managers 20
- 21. Road-Map Recommendations Governmental sponsored research Large research team with access to database Results should be shared with decision makers and regulators NGOs and NPOs contribution shall add value to the research Research Limitation Time frame Demographic impact Statistical analysis 21
Hinweis der Redaktion
- In this slide we should talk about the main features of the SMEs. Normally, SMEs are founded to catch the opportunity of market demand for a services or product. The founders are mostly technical people whom are able to identify the market gap and know how to solve it, they know the goal but they miss the vision (long term plans). On starting the business, they face low sales numbers and fail to manage the operation or high unexpected sales and fail to manage the money (cash flow). The financing of these low credit (they don’t have assets or guarantee) organizations results in hard financing terms that puts SMEs in financial struggles. The founders will mostly get deeply involved in technical issues to adjust the product quality and match the market specifications, but they shall not pay attention to the business files (marketing, sales, hr and accounting).
- This slide presents the Central Bank of Egypt definition of the SMEs and MSEs (micro-to-small). The definition is highly dependent on the economic situation in Egypt which is totally different than the definition of Dubai in the next slide. The presenter should go through numbers and read them to the audience to enable the comparison with the next slide.
- This slide presents the Dubai definition of the SMEs and MSEs (micro-to-small). The presenter should go through numbers and read them to the audience to enable the comparison with the next slide.
- This slide presents some statistics on the impact of SMEs on the economy of some countries around the world. It is obvious then why the researches around the world pay a great attention for the SMEs performance and growth. They deeply study every and each factor that may contribute in stable growth of these firms, and this why we should do the same in Egypt.
- The research objective should be read to the audience to clear the idea behind this research. This is the end of section 1, the introduction.