Our previous Talking Point article highlighted the fact that the SME sector (small-and-medium sized enterprises) is the backbone of the UAE economy; a major driver of economic growth, employment, entrepreneurship, innovation and sustainability.
Big is not always best. In many instances, smaller businesses can present unique advantages over larger competitors.
Below, we present 6 main reasons why SMEs should be an important part of your supply chain.
Speed of response
Precisely because of their smaller size, SMEs can be more agile in responding to the unique needs and wants of different types of customers. Their short command chains allow customer problems to be resolved much more quickly compared to larger businesses with more complicated decision-making processes.
In many of the sectors we operate in, speed of response to customer needs is critical. In the in-flight catering sector, for example, can we really afford to have expensive planes missing their departure slot because there is no clean tableware on board? At Arpal Gulf, we work closely with our in-flight catering partners to ensure that problems arising in busy day-to-day operations are resolved quickly to prevent a crisis from developing.
Closely related to the above, the SME has much greater flexibility to ‘change the rules’ to get things done for its customers. We can respond to market changes more quickly than large, bureaucratic organisations. We don’t need to worry about ‘running things by committee’ nor sticking with something that isn’t working because it’s a directive from the top.
As long as we continue to listen to the voice of our customers, we can be agile and flexible in responding to their needs. In large corporations, the gears of bureaucracy move much more slowly and are much less flexible. After all, ‘rules are rules’ with no exceptions.
Personal attention and personality
Over the last two decades, the success of Arpal Gulf has been based on people – the quality of our own people, the strength of the relationship we have with supply chain partners, customers and other stakeholders. Especially in the Gulf region, the importance of personal relationships and the personal touch in business should never be underestimated.
Without doubt, this is an area where SMEs have a unique advantage over large corporates. In SMEs, senior managers will be much more directly involved in employee AND customer communications compared to more bureaucratic organisations. This will, more often than not, lead to much higher levels of employee engagement and customer satisfaction.
At Arpal Gulf, we ‘walk-the-walk’ as well as ‘talk-the-talk’ in terms of customer service. It is very difficult for a big business to replicate the intimate, one-to-one, personal relationships and mutual trust that we have built up over the years, especially with our most valuable customers, suppliers, partners and employees.
Personal relationships built on loyalty and trust will always outlast any temporary benefits that a larger business may bring to the table. We live our mission statement of never giving a customer a reason for going elsewhere. We don’t just post it on the office wall.
With personal attention comes brand personality. A well-managed SME will have a distinctive soul. Even well-managed corporates can easily become soulless bureaucracies.
Many SMEs focus and specialise. This can often provide a competitive edge over larger companies who may have spread themselves too thinly.
At Arpal Gulf we know what we are good at and stick to doing it well. One of these areas is the development of niche markets.
In addition to our core cleaning chemicals business, Arpal Gulf represents a range of other companies providing specialist products and services complementary to our own. This includes niche product categories such as specialist industrial products, water treatment, equine health, swimming pool hygiene, under water pool lighting, cleaning consumables and the provision of ecological cleaning products.
We are always happy to talk to innovative companies keen to expand in the UAE & MENA regions. With our proven track record spanning 20 years and a reputation for quality and professionalism, we can provide a gateway to companies seeking to establish themselves in the region.
Change and future readiness
SMEs are more geared towards change than larger companies. In the latter, a lot of time, money and effort is required to make even the smallest change due to the size and complexity of the organisation. The small business is more ready to adapt.
The above comment is extremely relevant in an era of rapid technology change and digital disruption. In a fast moving digital era, most large organisations have now accepted that they need to ‘adapt or die’ – utilising digital technology to streamline internal systems and processes, reduce costs and improve efficiency, becoming a more agile, fast-moving, flexible business - in fact, becoming everything that many small businesses already are.
With the senior-most executives in large organisations now accepting the need for change, the challenge has become about ‘how to get there’? The evidence is overwhelming that most large, bureaucratic organisations struggle to transform digitally. In other words, they struggle to become more like their smaller, more nimble, agile competitors.
The main barrier to digital transformation has nothing to do with technology. It is the ‘command and control’ organisational structure and culture prevalent in most large businesses. At Arpal Gulf, by contrast, we have always innovated in our use of emerging technologies to enhance the level of service delivered to our customers. In many ways, we are a ‘leading digital’ company.
Conventional wisdom is that large businesses will always be more price and cost competitive than smaller businesses due to economies of scale.
This is not always the case.
With lower operating costs (less bureaucracy), SMEs are often able to sell products at lower price points while still making a profit. By contrast, large corporates are often limited in how low they can take prices because of the potential impact on quarterly profits and hence stock prices. The threat of triggering a price war with other large competitors is another reason why prices are often sticky downwards.
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