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Small and Medium Enterprising in Egypt Kings College London

Small and Medium Enterprising in Egypt Kings College London. Omaima Hatem June 2012. Outline. Who: are the MSME? Why: Are they Important? How: Process of Development CSF for Implementing Knowledge Management

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Small and Medium Enterprising in Egypt Kings College London

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  1. Small and Medium Enterprising in EgyptKings CollegeLondon Omaima Hatem June 2012

  2. Outline • Who: are the MSME? • Why: Are they Important? • How: Process of Development • CSF for Implementing Knowledge Management • Examples from similar Emerging Markets

  3. Micro, Small & Medium Enterprises Who: are the MSME? EU definition of SMEs in 2012: • Micro-entities are companies with up to 10 employees • Small companies employ up to 50 employees • Medium-sized enterprises have up to 250 employees. Definition Similar to the US Small Business Association

  4. Why are MSMEs Important? Mckinsey’s Reports (2011 & 2012) How banks can grasp a $350 billion opportunity Banks should step up their efforts to serve micro-, small and medium-sized enterprises (MSMEs) in emerging markets. The size of the opportunity : Emerging market MSMEs looks a very attractive segment. Estimate that bank revenues could jump from $150 billion in 2010 to ~$367 billion by 2015 – a growth rate of 20 per cent per annum

  5. Why are MSMEs Important? There are three reasons for Mckinsey’s optimism. First, an estimated 60 per cent of global banking revenue growth over the next decade will lie in emerging markets. Second, more and more banks in emerging markets are finding ways to overcome the difficulties of serving the important MSME segment. Third, innovations in technology, risk assessment and business models are increasingly facilitating their effort.

  6. Five leading practices 1. Seek a granular understanding of target MSME clients 2. Radically lower operating costs Distribution Product processes People 3. Manage risk innovatively New approaches to credit scoring Other elements of the credit process 4. Empower MSME clients 5. Engage with government

  7. Next Eleven Goldman Sachs Investment Bank coined the term in their report of December 2005, when a group of emerging economies showed promising outlook at the time for future growth. The group is comprised of Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, S. Korea, Turkey, and Vietnam.

  8. CIVETS Wharton Business School: in their on-line business journal Knowledge at Wharton published an article titled “The New BRICS on the Block: Which Emerging Markets Are Up and Coming?” January 19, 2011. The article inaugurated the term CIVETS to refer to Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa

  9. Critical Success Factors Critical Success Factors: The critical areas of managerial planning and action that must be practised in order to achieve effectiveness, Saraph et al.(1989) In terms of Knowledge Management: The activities and practices that should be addressed in order to ensure its successful Implementation, Wong (2007).

  10. Critical factors for SMEs,Wong (2007). Proposed critical factors for SMEs for implementing KM • management leadership and support; • culture; • IT; • strategy and purpose; • measurement; • organisational infrastructure; • processes and activities; • motivational aids; • resources; • training and education; and • HRM.

  11. Process of Development How to empower, motivate, encourage, lead and manage MSMEs: Entrepreneurial processes Identifying, evaluating and exploiting business new business opportunities Managerial processes Developing Dynamic Capabilities to Craft Competitive Advantage to face changing business environment

  12. Strategic entrepreneurship Strategic entrepreneurship: It is the integration of Entrepreneurship and Strategic Management Involves simultaneous opportunity-seeking and advantage seeking behaviours (Ireland, Hitt and Sirmon, 2003).

  13. Innovations Innovations are the focal points of strategic entrepreneurship initiatives represent the means through which opportunity is capitalised upon. These are innovations that can happen anywhere and everywhere in the company. IT, Business Model, Restructuring, Entry Mode, Knowledge Acquisition

  14. Resource Orchestration Deployment & Managing Resources Strategically: Structuring, Bundling & Leveraging firms’ resources & skills to face changing business environment What are the MSMEs Resources

  15. MSMEs Resources(Wiklund and Shepherd, 2008). Human Capital: Education, market knowledge, technical abilities and start-up experience; Social Capital: Family, friends, business networks and links with government support agencies Financial Capital: Personal Savings, microfinance, bank loans, reputation for eventual IPO

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