Strategic asset building and competitive strategies for SMEs which compete with industry giants

Abstract

This chapter studies companies which are arguably business super-heroes - the small firms which despite the apparent handicap of very limited resources are able to compete against much larger, multinational firms - the micro-giants Davids that take on Goliaths. Through a process of detailed case studies of actual firms, analysis of asset structure, and experiments with a simulation model, the relationships between key assets, critical success factors, and micro-giant competiveness are explored. The model produces six scenarios reflecting different strategies for developing tangible and intangible assets and, critically, the balance between them. A level of aggression is needed in asset building to maintain competitiveness, but the simulations show that this can all be undone if balanced development is not managed. This confirms there are pathways by which micro-giants can remain competitive and deny multinationals the overwhelming victory that the received wisdom suggests.